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Case Summary: Walmarts Sustainability Strategy

Qingyun Zeng
Walmart is a world famous company. It is the world's largest company by revenue, as well as
the biggest private employer in the world with 2.2 million employees. After the company
grew in size, more and more people began to be concerned about the huge impact that the
company brings to our society and to the environment.

For example, every Walmart

shopping plaza consumes an average of 1.5 million kWh of electricity per year. Such a large
use of energy had a negative influence on Walmarts reputation with regard to sustainability.
Therefore, in 2007, Walmart launched a new business strategy to meet three environmental
goals set by former CEO Lee Scott: (1) to be supplied 100 percent by renewable energy; (2)
to create zero waste; and (3) to sell products that sustain people and the environment as
mentioned in the article.
What the article did not mention is that in 2005, Lee Scott invested $5 billion on
sustainability projects and put forward the following three goals in an internal meeting: (1) In
the next 3 years, Walmart would enhance the efficiency of its transportation fleet by 25%, and
double it in 10 years; (2) Reduce the stores operational energy consumption by 30%; and (3)
Reduce the US stores waste by 25% in 3 years.
I believe Scotts first goal is a very smart and direct strategy to help the companys overall
sustainability. Since Walmart owns their own fleet, this will make this goal easier to manage.
Secondly, Walmart built large distribution centers and stores that made the cost of
transporting their items low. Thirdly, I think it is important for Walmart to optimize its routes
for transport by using the traffic management system to determine the best route. The nearest
way may not be the best way, and sometimes a longer road route is a better choice. Walmart
also leased their fleet to some third-party companies, so that the fleet would not return empty.
And vehicle communication can help the company track their assets, and ensure that drivers
travel on designated routes. Fourth, the Walmart fleet used mixed fuel and electricity instead
of fossil fuels. By doing these things, Walmart has basically completed the first goal.
Concerning the supply chain aspect, Walmart changed its own selling items to achieve and
enhance its sustainability. Specifically, changes were made in many areas such as seafood,
fluorescent light bulbs and electrical equipment these were mentioned in the article. By
doing this, the change that Walmart can create through its own products is huge. It promotes
the change of the product structure in market.

Walmart could also influence the

manufacturing industry to produce sustainability items because of its powerful buyer market.

Walmarts sustainability strategy not only happens on its own, but it also happens in the way
it chooses the suppliers.

With its 15 questions to suppliers, Walmart can evaluate the

sustainability situation, and choose the best supplier. Because the company is powerful, it
will not worry that some suppliers will not cooperate. Experience also proves that suppliers
who drive sustainability also tend to be the same suppliers who are bringing the most
innovative products.

Walmart enforces its sustainability strategy by choosing the right

supplier, and textiles are a good example to consider. Instead of buying organic cotton
directly from farmers, Walmart delegated relationships management with the farmers to its
suppliers, and focused on selling sustainable finished merchandise.
Walmart also updated its supply chain by information transparency. We all know that one
way to make food safe is by improving transparency.

Walmart requires entry of the

ingredients of every chemical-based product that goes onto a shelf, uses GreenWERCS to
screen those ingredients, and provides information to customers that ensures the safety of
food.
Walmart, by globalizing its sustainability strategy made a smart move. If some countries
staff does not have much skill in sustainability, they can contact their international leaders
directly. The globalization strategy has given Walmart a better reputation in the world.
Although Walmart is not as successful in some countries as it is in the USA, perhaps this
strategy could change that situation.
Question:
As far as I know, Walmart also sells fluorescent light bulbs in China. But these kinds of bulbs
contain a small amount of mercury, and such low levels of mercury of a few bulbs may not
cause a great impact on the environment. But when thousands of discarded bulbs are stacked
together without any plan to recycling them, it will influence the environment negatively.
China is unlike many developed countries, which have already built a recycling system to
handle these kinds of bulbs. Walmart has already sold a large amount of fluorescent light
bulbs to China, and these may not be good for that nations environment. Before Walmarts
sustainability strategy goes global, perhaps this company should examine their past practice
in certain countries, and consider using different strategies in those nations that do not have
the infrastructure to handle some of the environmental challenges facing them.