Wal-Mart's Next Growth Initiative

Under former CEO Lee Scott, Wal-Mart Stores (NYSE: WMT  ) announced a long-term initiative to move to 100% renewable energy and zero waste. Skeptics abounded at the time, but since then, the retail giant has pursued one green initiative after another.

In addition to those long-term goals, the company has taken on a slew of more immediately actionable initiatives:

  • Encouraging suppliers to drop polyvinyl chloride (PVC) packaging.
  • Installing efficient LED lighting, eliminating 35 million pounds of carbon dioxide annually.
  • Helping to educate consumers about compact fluorescent lightbulbs (CFLs), selling hundreds of millions of them, and saving the equivalent output of several coal-fired power plants.
  • Teaming up with BP (NYSE: BP  ) and SunPower (Nasdaq: SPWRA  ) to put solar systems on the rooftops of stores in California and Hawaii.

On Thursday, at Wal-Mart's Sustainability Milestone Meeting, the company unveiled another plank in its environmental platform: the introduction of product sustainability ratings. The idea would be that you could walk to the cell-phone aisle and see how an Apple (Nasdaq: AAPL  ) iPhone stacks up against a Palm (Nasdaq: PALM  ) Pre across various metrics, such as water used or waste produced in the product's lifecycle. This information would likely be represented by a number or color code indicating the product's overall sustainability. Pretty cool.

While your gut reaction may be that, as with organic certification, sustainability indexing has the potential to drive product prices higher, Wal-Mart says it intends to lower costs in the process. That, after all, is the company's core purpose. If any firm on the planet can live up to that promise, it's got to be this one.

That's not the only reason this is the right company for the job. As with McDonald's (NYSE: MCD  ) and its ability to influence global farming and feedlot practices, Wal-Mart is very well positioned to effect change here. With more than 100,000 suppliers, Wal-Mart is facing a mammoth undertaking, but it also carries a lot of weight with a lot of companies.

Sure, we can't expect to see sustainability labels cropping up in the immediate future. But this does feel like the future, and I'm glad to see Wal-Mart spearheading this initiative, which will require the collaboration of countless other firms, universities, and nongovernmental organizations.

Wal-Mart is an Inside Value selection, and Apple is a Stock Advisor pick. Sustain your portfolio with any of our Foolish newsletters free for 30 days.

Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.


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  • Report this Comment On July 17, 2009, at 7:02 PM, madmilker wrote:

    People in America need to realize jus what got America in this shape…”cheap” yes so-call cheap items from a foreign land.

    quote*Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. *end quote!

    Now! if there be 182 country’s making items for the world to buy and they have only 5% of the pie in China…duh! This company makes the nice people of China support their currency(yuan) by keeping it in their country working for the people there…. but with the “yuan” going up in value and the US dollar going down…all the foreign items that the American consumer buys thinking it is cheap has went up in price.

    People…its all about the currency and to keep a currency strong you got to keep it floating around the country you live in so it can work for you. For the past 12 years all them US dollars are being shipped overseas to a foreign bank and with the American worker not making anything for the foreigner to buy the “we the people” have to turn to the “second” largest employer in America(Uncle Sam) to sell “we the people” debt in order to get all them dollars back!

    50 years ago a foreigner would had given their left nut for a US dollar or a Hershey’s chocolate bar and today the same foreigner has got Uncle Sam and the American consumer by both all the while Hershey is moving the chocolate factory to Mexico. Wake up! America and think “MADE IN AMERICA.”

    quote*"Considering that there are over 30,000 ships at sea this morning," writes James Carlton, director of the Williams College-Mystic Seaport Maritime Studies Program, in an e-mail, "the total number of organisms and species in this global 'bioflow' on the morning your readers read your piece could be staggering - billions of individuals, and thousands of species."

    Indeed, scientists have long considered ballast water the primary way invasive aquatic organisms are introduced. From the zebra mussel's arrival in the Great Lakes, to an American jellyfish severely disrupting Black Sea fisheries, the potential costs of accidental introduction of a species to new homes can be tremendous. Aquatic invasives cost the US $9 billion yearly, according to estimates by David Pimentel, professor emeritus of ecology and evolutionary biology at Cornell University in Ithaca, N.Y. Zebra and quagga mussels (a cousin to the zebra) alone cost the $1 billion annually.*end quote!

    tat is $9 billion a year in hidden taxes to all Americans...

    cheap ain't chic and it cost America............jobs!

    "Now let us look at Wal-Mart again; you buy a product there, 6% goes to the employees, 10-18% is profit to the company, 25% goes to other costs and 50% goes to re-stock or the cost of goods sold. Of the 50% about 20-25% goes to China, a guess, but you get the point. Now then, how long will it take at 433 Billion dollars at year for China to have all of our money, leaving no money flow for us to circulate? At a 17 Trillion dollar economy less than 40-years minus the 1/6 they buy from us. Some say that if we keep putting money into our economy, it would take forever, but if we do not then eventually all the money flow will go. If China buys our debt then eventually they own us, no need to worry about a war, they are buying America, due in part to our own mismanaged trade, so whose fault is that? Not necessarily China, as they are doing what's in the best interests, and we should make sure that trade is not only free, but fair too."

    http://www.worldthinktank.net/pdfs/TheFlowofTrade.pdf

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