Nov 5, 2007

Wal-Mart Lee Scott, "Sustainability is here to stay."

Lee Scott seems to think they can. Some excerpts from his remarks to the gathering of suppliers as well as executives from his own company:

Sustainability is here to stay. It is not a fad, it is not a marketing ploy. . . . It is in fact a part of what all of us are going to be doing with our businesses from here on out. It is not about higher margins and higher prices. It is about the elimination of waste. It is about making our businesses more effective. It is about transferring those benefits on to the consumer. And it is about taking chemicals and things we know aren't good for the environment and finding alternatives to those chemicals so we make products safer.

I think for Wal-Mart one of the key roles for sustainability is it is going to cause us to have better products. Because we're going to be thinking about the quality in those products: what is the defective rate  . . . what are the life-cycle costs of that product . . . . Ultimately my view is that because of sustainability, we also will be dealing with the best companies. Let me talk about sourcing from someone who is willing to compromise on the environment -- maybe destroy waste in an inappropriate way, or use chemicals that they shouldn't. What in the world would make Wal-Mart think that the person who is willing to compromise the environment, knowingly, wouldn't also be willing to compromise on quality to meet a price point? . . .

My belief is that we're going to find that sustainability and all of these social context issues are all related and all end up showing up in the quality of the products. And that as we use sustainability as a driving force, we will have better suppliers . . . and it will enhance the reputation that we have as a company.

High-minded words, to be sure. And they will likely rankle Wal-Mart's many detractors, for whom the words "Wal-Mart" and "sustainability," used together, are simply discordant. The doubters are not irrational. For years, Wal-Mart has been an aggressive, sometimes arrogant, leviathan, seemingly out of touch with progressive social and environmental ideas and ideals. In its single-minded pursuit for growth and dominance, it played rough -- with competitors, communities, suppliers, politicians, and anyone who got in its way, notably (or especially) activists. How can this sudden embrace of sustainability be anything other than a cynical ploy?

I'm pretty sure that it's not. In recent months, Wal-Mart has put itself out there in ways that few other companies have done. It is spreading the green gospel to its 1.3 million employees, teaching them how to live greener lives. It is inviting activists into its offices, and commanding suppliers to meet new, green goals, and parading its CEO in front of audiences and the press to talk the sustainability talk.

To the extent the cynics are right, it's that Wal-Mart's mission is to sell more stuff to more people in the pursuit of profitability and growth, an arguably unsustainable proposition. And that's a problem.

But along the way, the behemoth from Bentonville stands to move hundreds, perhaps thousands of suppliers toward a more sustainable path, and help to fuel consumer demand for things organic, nontoxic, and efficient, among other attributes. And, perhaps, engender everyday environmental habits among the citizenry in ways that even the most committed environmental activists have failed to do.

As Scott put it last week:

We have simply started. We make no claims of being a green company. We're not saying we're better than anyone, we're not saying we're doing it right. What we're saying is that we recognize an opportunity to make a difference in this world, make a difference for our customers, for our shareholders, for our associates, and it is worthwhile to do.

It's a messy affair, this sustainability thing. And Wal-Mart has made more than its share of the mess. But maybe, just maybe, that same company, in its dogged pursuit of productivity and profits, can create more than its share of the solution, too.