Green Speak from Wal-Mart

As it celebrates its 50th anniversary this year, Wal-Mart Stores is being recognized for many achievements, not the least of which is its leadership in sustainability. On the green front, the chain has become a leader in best practices, with innovations that deliver positive results for consumers, communities and the company’s bottom line.

Andrea Thomas, who joined Walmart in 2007, became the company’s first senior VP sustainability in August 2010. Thomas talked with Chain Store Age contributing editor Connie Gentry about what sustainability means at Walmart and how the company is leveraging its scale to make impacts for global good.

Sustainability leadership is still an emerging role in retail organizations. How would you describe your position?

The sustainability role at Walmart is a rotating responsibility. Walmart taps someone from another business area to lead sustainability, with the intention that after two or three years that person will move elsewhere in the company, and another Walmart executive will assume the sustainability role.

While it’s not a career destination, it’s a very interesting job with interaction internally across virtually all departments, and an equal amount of interaction externally with communities, government agencies and NGOs (non-governmental organizations, typically associated with the United Nations).

Tell us a little bit about your background and what prepared you to lead sustainability.

Before Walmart, I spent 13 years at Pepsico and a couple of years at Hershey where I dealt with Walmart and retailers from the manufacturing side. In my early years at Pepsico, I worked in the restaurant division; and while that’s not retail per se, it involved working with many locations, and it had the same flavor to it as a retail organization.

Initially I came to Walmart to work with private brands, food and consumables, and then I moved into sourcing general merchandise. For sustainability, it’s very helpful to have an understanding of store operations, logistics and our supply chain. About 90% of our carbon footprint comes through our supply chain. I’ve spent most of my career working with innovations on the CPG side and understanding all the pieces of the supply chain. It’s very important to understand where products come from and identify opportunities to do things more efficiently and more environmentally pointed.

How is sustainability integrated into Walmart’s culture?

Within the principles of sustainability, the emphasis is on doing more with less, being more efficient and using fewer natural resources. In retail, this is particularly true as you think about how to develop stores and supply chains. In those respects, sustainability is very supportive of the Walmart productivity loop. From the very beginning, our priority was to help every department and associate understand the principles of sustainability, how sustainability supports the company’s productivity loop and how that sustainability needs to be embraced throughout the organization.

In addition to my team of 14 people, there are others who don’t report directly to me but, within their department, their job is to support sustainability efforts. We also created Sustainable Value Networks throughout the company so that people in various jobs have the opportunity to think about how we should address sustainable opportunities.

How do you prioritize and focus sustainability efforts?

We have three main aspirational goals: to be supplied by 100% renewable energy, to create zero waste, and to have products that sustain people and the environment. Those are broad and far-reaching, but it’s easy to categorize what fits under each goal and identify ways that the business touches each aspect.

For instance, waste falls under operations, and transportation is a big energy piece. On the product side, we have projects around sustainable agriculture and the Sustainability Index. We’ve set goals around agriculture because it touches so many areas of our business. Food, obviously, but also the cotton used in apparel and home products or wood that goes into furnishings and hardlines.

The Sustainability Index helps us understand the supply chain and recognize areas we need to start working on and thinking about. Some goals are to educate us, so we can experiment and learn ways to be more energy efficient in our stores. Other goals are broad and have a lot of scale, such as creating zero waste — and in our U.S. operations, we have diverted 80% of waste away from landfills.

What did you do to divert waste from landfills?

First we encouraged our people to focus on waste reduction and understand its importance. In the past, each store paid to have waste hauled to the landfill. There is value to waste, and we helped our store teams develop recycling programs with their communities and identify other places for that waste to go — so waste disposal changed from being an expense to a profit center in the stores.

We also started using recycled material across our supply chain, and we convinced vendors to use recycled materials as well. We always look for ways to connect the waste stream to actual products that we sell or use within our operations, and we have several closed-loop examples. For instance, cardboard pizza cases are sent to the company that makes our pizza boxes to be recycled.

What about the remaining waste that isn’t recycled or reused?

A portion of that remaining 20% is there because some communities don’t have as many abilities to recycle, and customers also bring waste into the store. It doesn’t make sense at this point to send associates into restrooms to separate waste in trashcans. But it does make sense for associates in the produce section to sort damaged produce that we won’t sell and send it to animal feed.

Walmart also promotes renewable energy usage, including your 100th solar installation in the United States, as well as installations in Canada and China. What is the outlook for renewable energy?

Solar and wind are two sources of renewable energy that provide micro-sources of energy and are easily implemented on a large or small scale. We have wind farms in Mexico that run 350 stores, and we have single stores with windmills in the parking lot that generate energy for that one location. The same applies to solar — our stores have big rooftops that allow us to easily install solar panels. However, renewable energy has to reach a point that it doesn’t cost more than non-renewable energy. The scale that Walmart brings, and our ability to partner with others to find funding, lets us help bring renewable energy to the place that it is cost neutral.

Are there sustainability initiatives that create cost but are still worth doing?

Maybe — we have to look at the longer-term benefit and at our ability to commercialize it. We will absolutely invest in learning. But if it’s too difficult to scale a sustainable project or if the capital investment doesn’t pay off for us, then we probably won’t continue with it.

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