Wal-Mart Launches Environmental Drive To Cut Energy Use, Waste

Wal-Mart Stores Inc. unveiled an environmental plan Tuesday to boost energy efficiency, reduce waste and trim greenhouse gases as part of a wider effort to address issues where it has been pummeled by critics.

Wal-Mart Stores Inc. unveiled an environmental plan Tuesday to boost energy efficiency, reduce waste and trim greenhouse gases as part of a wider effort to address issues where it has been pummeled by critics.

Wal-Mart Chief Executive Lee Scott also called on Congress to raise the nation's minimum wage from $5.15 per hour but said pay for Wal-Mart employees -- which averages $9.37 -- was sufficiently competitive. He said even a slight overall increase in Wal-Mart pay would eliminate a profit margin that generated $10 billion in profits last year.

Scott said the world's largest retailer had to be a "good steward for the environment" and believed that adopting greener practices would also be good for business by cutting costs. "We are going to do well by doing good," he said in a conference call with reporters.

But while Wal-Mart touted its environmental plan, Scott rejected calls to increase workers' pay that unions and other critics say is often below poverty level. Instead, he urged Congress to look at raising the U.S. minimum hourly wage for the first time since the mid-1990s.

"It is time for Congress to take a responsible look at the minimum wage," he said.


Scott delivered remarks to Wal-Mart workers on Monday and followed up with a conference call with reporters Tuesday. The sessions follow Wal-Mart responses to critics over diversity, pay and overseas buying and come at the start of a two-day annual conference for financial analysts.

Analysts said the environmental plans were not so much a radical change by Wal-Mart as a recognition that efficiency and waste-reduction made good business sense in an era of higher energy prices.

"That is all good, forward-thinking management," said Don Gher from Coldstream Capital Management Inc. in Bellevue, Wash.

Tom Rubel, who heads consultant Retail Forward in Columbus, Ohio, said Scott was leading a genuine effort to adopt new standards.

"I do think that this is a departure. This is sort of vintage Wal-Mart. They have listened, and learned, and now they have set a course and they've established some aggressive goals and now they're going to go after it very aggressively," Rubel said.

Scott said the environmental plan was part of goals set after a year of talks with Wal-Mart's employees, customers and critics that he said showed many of the issues where the company was on the defensive could be opportunities instead.

Scott said those meetings did not include any labor unions or groups such as Wal-Mart Watch and Wake Up Wal-Mart, formed in the past year to coordinate campaigns against the retailer by labor, environmental, women's rights and community groups.

"We met with people who quite honestly have asked us not say who they are. We did not meet with those people who simply wish we did not exist as a company," Scott said when asked about the two campaign organizations. Wal-Mart Watch and Wake Up Wal-Mart say they want to reform the company, not shut it down.

Wal-Mart's targets for raising fuel and energy efficiency and reducing packaging waste are bold but the credibility will depend on whether the company reports its progress to the public, one environmental expert said.

"Wal-Mart is one of the world's largest companies in the world so they have a huge influence in the marketplace. There is a huge opportunity for them to influence the marketplace," said Elizabeth Cook, vice president of World Resources Institute in Washington D.C.

"Wal-Mart will win its skeptics over once it shows that it can deliver on these commitments," she added.

Scott said those targets include increasing fuel efficiency in Wal-Mart's truck fleet by 25 percent over three years and doubling it within 10 years; investing $500 million annually in efficient energy technologies at stores; and cutting solid waste from U.S. stores and Sam's Clubs by 25 percent in three years.

Wal-Mart critics dismissed the plan as rhetoric.

"All these initiatives are good for Wal-Mart but they don't address the core problems that they create for their workers and their communities," said Chris Kofinis from Wake Up Wal-Mart, which is backed by the United Food and Commercial Workers.

Kofinis said low wages and poor health care benefits remained core problems.

"They are digging in their heels over wages," said Tracy Stefl from Wal-Mart Watch, a coalition of union, environmental and women's rights groups and other activists.

"Wal-Mart seems rightly sincere in their efforts to be the best company they can be. So to completely dismiss the notion of raising wages for its workers constitutes a failure of their goals," Stefl said.

Scott on Tuesday also outlined plans to boost diversity among Wal-Mart's more than 60,000 suppliers and in its work force, which numbers 1.2 million in the United States, as well as to work toward independent monitoring of its overseas suppliers to make sure they meet social and environmental standards. Both are points that critics from organized labor and other groups have targeted.

Scott also detailed a lower-premium health care plan aimed at making coverage more affordable to Wal-Mart workers. Less than half of Wal-Mart's employees are covered by the company health care plan, compared to 80 percent at rival Costco Wholesale Corp.

Wal-Mart shares fell 82 cents to close at $45.39 Tuesday on the New York Stock Exchange.

Source: Associated Press