The Truth Behind Wal-Mart's Green Makeover

Last October, Wal-Mart CEO H. Lee Scott Jr. gave a remarkable speech to his employees. He pledged to transform Wal-Mart -- the world's largest retailer, No. 2 on the Fortune 500 -- into a company that runs entirely on renewable energy and produces zero net waste.

It was an outrageously bold promise, and a bit disorienting.

Wal-Mart's green-tinted, come-to-Jesus moment presents political progressives with at least two dilemmas. First, do we believe Scott has taken the green gospel to heart? And second, does this mean its okay to cheer Wal-Mart?

All the talk in the progressive community these days is about building a broad, holistic movement to replace the desiccated collection of interest-group silos that is the post-Southern-realignment left. "Checklist liberalism," as one wag called it, is supposed to be on its way out.

Then along comes Wal-Mart, checking the "green" box, but conspicuously failing to check the "labor" box, and … well, what?

It's too early to tell for sure, but Wal-Mart's environmental initiatives do appear substantive. Scott's commitments go well beyond what would be necessary for a successful greenwashing campaign. (Hell, BP pulled one of those off with little more than a name change.)

The holy trinity of genuine business transformation is: 1) public goals and timetables, 2) buy-in at every level of the company, and c) transparent reporting.

Wal-Mart has hit two of the three: Scott announced specific goals, and by all accounts Wal-Mart associates are invigorated by the challenge and the sense of moral mission.

As for transparent reporting, time will tell, but with all the scrutiny the announcements have drawn, it would be extraordinarily difficult to back out quietly. The company has already set up more than a dozen "sustainable value networks," each focused on a particular area like packaging or facilities, each made up of Wal-Mart managers and outside educators, regulators, and environmentalists. A lot of people are involved who wouldn't hesitate to call foul if Wal-Mart stalled or backed out.

In close consultation with Amory Lovins' Rocky Mountain Institute, Scott pledged to double the efficiency of Wal-Mart's enormous truck fleet by 2015 and reduce greenhouse-gas emissions from its existing stores and warehouses by 20 percent over the same stretch. By 2008, Wal-Mart will have a store design that uses 30 percent less energy and produces 30 percent fewer GHG emissions, developed out of the experimental green stores in McKinney, Texas, and Aurora, Colorado. It will reduce solid waste from its stores and clubs by 25 percent in three years.

The company also plans to reduce overall packaging, move heavily into organic products (textiles and food), and even -- if you believe the chatter -- buy more local food.

Wal-Mart's notorious monopsony powers force suppliers to bend to its will or suffer. Normally this is a lamentable state of affairs, but if such power is wielded on behalf of the environment, the ramifications could be astounding. By Scott's own reckoning, 90 percent of Wal-Mart's environmental impact will come through influence on its supply chain.

For example, the company is ordering wild-caught seafood from fisheries certified by the Marine Stewardship Council. It's developing a sustainable certification system for gold. In areas where Wal-Mart is the biggest retailer -- and those are legion -- its demands could transform whole industries.

Influence will also pass forward into the enormous customer base. More than other greening companies like GE and Goldman Sachs, Wal-Mart has direct, personal relationships with millions and millions of ordinary Americans of every class and color. It can educate them about eco-friendly products and behaviors; indeed, in its ubiquity it cannot help but educate them. The company is also a cultural icon, the very emblem of Middle America. By embracing green thinking, Wal-Mart could drain it of its poisonous ideological connotations and enshrine it instead as common sense. Ecology could be removed from the culture wars.