Walmart, the world's largest company by revenue, according to the 2011 Fortune 500 list, would also like to be the world's greenest corporation. Since Sam Walton founded the first Walmart in Rogers, Arkansas, 50 years ago, the company has grown to 10,185 stores and club locations in 27 countries, serving 200 million customers a year. With a global footprint on this scale, positive change at Walmart could be pivotal, and the company's efforts—though not immune to criticism—have earned awards from organizations such as the EPA, American Council for an Energy-Efficient Economy, and World Environment Center. Kory Lundberg, Walmart's sustainability director, makes the case that pleasing customers, keeping costs low, and focusing on maintaining a sustainable company all go hand in hand.
Gourmet Live: In the past, Walmart has been criticized for being environmentally destructive, including wasting natural resources on a far-flung supply chain and building massive stores. Were such criticisms the impetus for the sustainability project?
Kory Lundberg: Not really. Sustainability is something we've focused on for a long time. It's always been a part of who we are. But I'd say that it was really Hurricane Katrina [in August 2005] that changed the company. Lee Scott, who at the time was the CEO of Walmart, really wanted the company to assist in helping those affected by this natural disaster. We saw how the company responded to that, and wanted to know how the company could be like that—at its best—all the time, and sustainability was a large part of the answer. If we look at the environment as Katrina in slow motion, we see how important it is to work toward making changes that help the environment and keep our customers happy.
GL: How long did it take for the company to implement its sustainability program?
KL: It was a process that took more than a year. With a company the size of Walmart, you want people to really believe in the idea. Lee Scott really became the champion for sustainability in the business.
GL: Why is environmental stewardship important to the corporate ethos?
KL: It fits very well with Walmart's culture. We have always been focused on eliminating waste and reducing costs for our customers. Sustainability is also a really great business strategy. If we use less energy, our costs go down. The money we save from cutting back is money that we pass through to the customers in the form of low prices.
GL: What are some specific ways you are working to reduce waste and the company's carbon footprint, and what are the results?
KL: In 2005, one of our initial goals was to reduce carbon emissions by 20 percent by the end of 2012 in our 2005 baseline of global stores. So far we have reduced emissions by 12.74 percent. We also have a goal to double the efficiency of our U.S. trucking fleet. Since 2005, we have increased efficiency by 69 percent. Because of this progress, since 2007 we have been able to deliver 360 million more cases of product while driving 270 million fewer miles.
We also implemented the use of LED lighting. At first, we tested LED lights in our freezer cases. They use a lot less energy than fluorescent bulbs, last significantly longer (50,000 hours), and work better in the cold. Since 2005, LED lighting has become standard [in freezers] in all our stores around the world.
More recently, LED lights became part of our prototype for parking lots. We started in Central America and Puerto Rico, and we gradually began implementing them in the U.S. and China. Last fall, we opened a store in Wichita, Kansas, where we used them for the sales floor lighting. The potential and possibilities for these lights are great.
In 2011, we reduced waste to landfills by 80 percent in the U.S. To give you an understanding of what that means, that amount of landfill waste has the potential of producing nearly 12 million metric tons of carbon dioxide. Not only that, but this change alone reduces a lot of cost: We were able to return $231 million to the business in 2011, which is the equivalent of the profit of 30 to 40 supercenters.
GL: When it comes to stocking your shelves, to what extent does Walmart work with local farmers to source fresh produce?
KL: Between 2010 and 2015, we wanted to double the amount of locally grown produce sold in our stores. In just the first year, we increased the sale of locally grown produce by 97 percent. We almost met the goal in the first year.
Overall, grocery is more than half of our business. Since 2010, our sustainable agriculture platform has focused on three main pillars: supporting farmers, producing more food with fewer resources, and sustainably sourcing key agriculture products.
One of my favorite locally grown stories is around jalapeño peppers. Four or five years ago, almost all of our peppers came from Florida, California, and Mexico, but by working with local farmers to see if they would be interested in growing a new crop with a commitment from Walmart to purchase, we now source jalapeño peppers from approximately 30 states—including some you wouldn't think of, like Minnesota, New York, and Idaho. This helps farmers diversify crops and grow a new, in-demand crop; it makes this crop available to other local retailers and farmers' markets; and it helps Walmart reduce costs, which we can pass on to our customers in the form of low prices. We've also expanded the program to include things like Anaheim and poblano peppers.
GL: Does Walmart sell organic produce?
KL:Our stores carry a number of organic products, including a variety of produce based on what our customers are looking for. What we have found is that by doing things like using our size and scale, filling trucks to capacity, and using our logistical efficiencies, we can often provide customers organic produce at prices on par with conventional produce.
GL: What about other parts of the world—how does your sustainability initiative translate overseas?
KL: We are in 27 countries now. For us, sustainability is a focus everywhere. ASDA, our operation in the United Kingdom, has eliminated all food waste going to landfills. In China, they reduced plastic bag waste by 86 percent in 2011, compared with 2007. Walmart Canada has its first in-store solar installation.
Walmart in Central America has a very successful, long-standing Direct Farm program [sourcing from small- and medium-size farmers]; we are taking Central America's best practices and applying them in other countries where we operate, like India, Canada, and Japan. In Brazil, our End-to-End project is generating a good amount of buzz. It analyzes the entire life cycle of consumer products, from sourcing raw materials to disposal of waste, with the aim of reducing packaging, incorporating recycled materials, and limiting water and fuel consumption.
GL: Do you hope to inspire other retailers to conduct business more sustainably?
KL: We already have. That was one of our goals that Lee Scott set from the beginning. If you have more companies using things like LED lights, that will bring down the costs for everyone. Because of our size, we hope to motivate all types of companies. We have white roofs on our buildings, which deflect a large percentage of the sun's heat—that brings down energy costs. We have also implemented skylights in most of our stores, and we've noticed that other companies have adopted this concept as well.
There are a lot of companies doing innovative things. For example, check out The Sustainability Consortium. Walmart is part of it, and so are other companies that want to make a change. Some of the companies are Best Buy, Coca-Cola, Disney, and Mars—it's a pretty diverse group.
GL: How do consumers react to your sustainability program?
KL: They are supportive. They like the idea, and when it comes to organic or local/sustainable products, they don't want to have to pay more for them. And Walmart doesn't believe they should have to spend more. Since Walmart reduces the company's expenses through the sustainability program, we can reduce the price of those items that traditionally cost more.
GL: What tips do you have for consumers who want to increase sustainability at home?
KL: WalmartGreenRoom.com has a blog where we post information to give customers ideas. On Memorial Day weekend, for example, we had a blog up about how to reduce gas use this summer.
MySustainablityPlan.com is another site worth checking out. Originally, MSP was a voluntary program designed for our associates so that they could easily get more information about incorporating sustainability into their lives. After rolling the program out internally, we made it available to any company that wanted it, and now any individual can access the program. All one has to do is log on and make commitments: It can be about establishing a family budget; it can help individuals set goals. And it can also help people track progress against one another. It shows how your actions, combined with others', can really ladder up into something big. When you introduce competition, it really helps incentivize others.