Sustainability efforts benefit bottom line, community.
By Eric Kulisch
Minimizing the environmental impact of operations and products involves reducing waste — and waste reduction is the core principle behind Walmart’s low cost and low-price strategy. Cutting waste saves money and protects the planet, Walmart officials like to say.
In 2011, Walmart continued its six-year journey toward zero waste and using 100 percent renewable energy supplies. Innovations cross the entire enterprise, often building on the lean principles of supply chain management.
Through a combination of organic diversion, food donation and recycling, Walmart has reached the point in California that only 20 percent of its waste ends up in the landfill.
Waste removal has now gone from a cost to a fairly significant profit center, Bill Simon, chief executive officer of Walmart’s U.S. operation, told company associates and business partners at the company’s annual sustainability conference in March 2011.
The waste reduction program is now being implemented at thousands of Walmart stores, Sam’s Club locations and distribution centers.
One of its primary objectives is to take recycled materials and put them back into products that can be resold to customers to create a closed loop.
Walmart worked with paper manufacturer Georgia Pacific and Worldwise Inc. to make new products and packaging from discarded material, Vonda Lockwood, the head of the waste reduction program, said.
Worldwise makes pet products from recycled, reclaimed and renewable resources such as plastic hangers and bags.
Worldwise pet beds, for example, use a fiber-fill made from recycled post-consumer plastic bottles, some of which come full circle from the retailer selling the beds. Other environmentally-friendly components include MemoryMix, a reclaimed memory foam fill; litter products made from recycled plastics; and cat scratchers using recycled corrugated cardboard.
In many Walmart stores, Styrofoam is collected and sent to a returns center for processing. Workers then remove the air from the Styrofoam and send it to a supplier to be made into photo frames that the retailer sells in its stores.
Walmart told suppliers five years ago to start streamlining the packing around their products to reduce the amount of material going into the waste stream. First Quality, the maker of Prevail adult incontinence products, found a way to shift from corrugated cardboard cases to polyethylene shrink wrapped pallets, eliminating 90 percent of the packaging weight. The new packing method has allowed the company to ship more cases per pallet and significantly reduce the number of inbound trucks with packing materials that come to its plant, according to a First Quality official who spoke at the event.
In 2010, Walmart and Sam’s Club began using services provided by Quest Recycling to recycle organic waste unfit for human consumption for use in animal feed, compost or waste-to-energy. The methane gas produced from the anaerobic digestion of the food products is captured and used to power generators that can place electricity back in the power grid. Meat is directly distributed to zoos, rescue shelters and other animal care providers or is sent to a rendering facility to be manufactured into soap, paint, cosmetics, lubricants, candles, animal feed and other products.
The yellow grease leftover from cooking rotisserie chickens at Sam’s Club is used to make animal feed and biodiesel fuel. In 2011, Sam’s Club diverted more than 268,000 gallons of yellow grease, of which more than 100,000 gallons were recycled into biodiesel. The division converted enough used cooking oil into an 80/20 biodiesel mix to fuel 480 tractor-trailers for one year.
Sam’s Club saves money by spending less on grease traps and gains revenue from selling the grease, according to Eric Voyles, Walmart’s senior manager for compliance innovation, on the company’s sustainability blog.
Quest Recycling says the partnership with Walmart has created 500 jobs.
Meanwhile, Walmart has combined charity work with logistics changes to further reduce waste.
Last year, the retailer launched an initiative to help end hunger in the United States. It realized it could give away unsellable meat, vegetables and fruit rather than paying suppliers to haul it away. Moreover, it had to train suppliers to compost the waste, Leslie Dach, executive director of corporate affairs, said at the event, which is archived on the corporate Website.
Walmart donated more than 256 million pounds of food in 2011, equivalent to about 197 million meals. Products not eligible for donation include hot foods from the deli, and outdated and returned food.
The company has also donated more than 100 refrigerated trucks to food banks across the country so the food it supplies doesn’t rot in transit. The company has given grants to food banks to make their warehouses more energy-efficient and its logistics experts provide free advice on how to operate their warehouses more effectively.
Four years ago, the mass merchandiser set a goal of reducing the weight of plastic bag waste by 33 percent per store by 2013. In 2010, Walmart stores across the world used about 3.5 million fewer plastic bags than in 2007. Measured by weight, the company reduced plastic bag use 21 percent to 47.95 million pounds.
Walmart is employing various techniques to minimize use of plastic, including a pilot program at three California stores that only offer reusable bags for purchase. Stores in Argentina have one or more “Ecologic Checkout” lanes that do not stock plastic shopping bags.
Energy Conservation. In 2010, the retailer set a target of eliminating 20 million metric tons of greenhouse gas emissions from its supply chain by 2016. It is working with suppliers in more than 20 product categories to reduce fuel use and emission of heat-trapping gases. Officials believe that by helping dye mills in China be more energy efficient they can eliminate between one and two tons of greenhouse gases for every ton of fabric produced, according to the company’s 2011 Global Responsibility Report.
So far, 119 factories in China have registered a greater than 20 percent improvement in efficiency compared 2007 levels.
Walmart’s internal goal is to reduce greenhouse gas emissions 20 percent by 2012 compared to the 2005 baseline for facilities existing at the time. U.S. operations have reduced greenhouse gas emissions 10.6 percent between 2005 and 2009, the most recent year for which data is available. Walmart said its total carbon emissions, including from new facilities and transportation, decreased 1 percent in 2009 from the prior year.
Cutting down use of fossil fuels is contributing to Walmart’s greenhouse gas reductions. Last September, Walmart announced plans to install solar panels on up to 60 more stores in California. When the project is complete, 75 percent of company stores in the state will have rooftop solar arrays able to provide 20 to 30 percent of each facility’s total electricity needs.
Walmart efforts recently enabled it to move into the top three in several categories of the U.S. Environmental Protection Agency’s Green Power Partnership.
The Green Power Partnership is a voluntary program that offers advice, technical support, tools and resources to companies interested in purchasing power from renewable sources such as solar, wind, geothermal, biomass and low-impact hydro-electric. The program can help companies reduce the transaction cost of buying green energy and helps create a market for renewable fuels
On-site generation of electricity, such as through solar panels, is counted towards green power purchases.
Walmart facilities in Texas and California helped the company become the second largest purchaser of green power among retailers, according to the 2012 rankings released by the EPA in January. It also secured the No. 2 spot among companies that generate power on-site. Overall, Walmart is the third largest purchaser of green power, up from 11th a year ago.
Walmart’s California and Texas facilities are buying more than 872 million kilowatt-hours of green power per year, enough to meet 28 percent of the organization’s electricity needs. Walmart generates its own power from solar arrays on top of its facilities and buys wind power from various utilities.
The investment in renewable energy supports Walmart’s long-term goal of being wholly supplied by renewable energy.
Walmart said it plans to increase its solar installations to more than 130 rooftops, comprising 75 percent of its stores, throughout California by the end of 2013.
Wind purchases provide up to 15 percent of the total energy for more than 360 of the retailer’s Texas locations.
In Mexico, Walmart is buying energy from a local wind farm to support its facilities and has installed solar panels on two facilities.
