Wal-Mart Stores, Inc. (WMT 0.37%) has long been the bogeyman of the left as its low wages, union-busting, and monopolistic ways have made it a popular target among liberals. But on at least one important liberal issue, Wal-Mart is a shining exemplar.
The nation's largest retailer, known for its rural and conservative values, is actually the biggest corporate solar power consumer in the country.
In fact, Wal-Mart has been the biggest solar user for several years running. Last year, according to the Solar Energy Industries Association, Wal-Mart had 142 megawatts of solar capacity, more than double all but one other U.S. company, Prologis, and Wal-Mart has completed 348 installations. The company's solar installations have accelerated in recent years, increasing from 59 installations in 2011 to 75 installations last year.
A history of green business
In 2005, former CEO Lee Scott set a goal for Wal-Mart to be completely powered by renewable energy. The company uses wind, fuel cells, and hydropower in addition to solar. Renewable energy sources now make up 26% of its global energy consumption, and those efforts have reduced the company's energy costs per square foot by 9%.
The company has a goal of reaching 7 billion kilowatt hours of green energy by 2020 and reducing energy per square foot intensity 20% from 2010 levels.
In addition to solar, the corporate giant has also made significant steps in using wind energy. Last year, Wal-Mart agreed to buy 58% of the output from Pattern Energy Group's new 200 MW Logan's Gap Wind Facility in Texas, serving 380 stores.
Wal-Mart has also experimented with wind turbines in stores, building 12 small wind turbines at a Worcester, Mass., location when it opened in 2010. It removed those turbines last year as subsidies for the small engines had been reduced, but the company has since made a number of other installations, including a large-scale wind turbine system in a California distribution center, a 265-foot tower with a blade with a 250-foot diameter.
Burnishing the bottom line and its image
Unsurprisingly, a company with the motto "Save Money, Live Better" is focused primarily on saving money with its green program. According to one estimate, its global energy costs are around $1 billion, so even a 9% cut in those expenses would constitute a meaningful addition to the bottom line as well as free up cash that can be better spent elsewhere.
But the steps the company's taking to be more environmental may also help warm it up to a demographic generally opposed to the retail giant.
CEO Doug McMillon seems to be focused on undoing many of the sources of Wal-Mart's negative perceptions since taking the helm in 2014. McMillion boosted the company's minimum wage from $7.25/hour all the way to $10/hour over the last two years, setting off a ripple effect across the retail industry as peers like Target, TJX Companies, and McDonald's all followed its lead. Last year, when the governor of Arkansas (Wal-Mart's home state) was considering signing a "religious freedom" bill that would restrict LGBT rights, McMillon spoke out against it, saying: "Every day, in our stores, we see firsthand the benefits diversity and inclusion have on our associates, customers and communities we serve," helping to persuade a veto of the bill.
Repairing its image is key if Wal-Mart wants to continue to grow domestically. The retailer is underrepresented in major cities and is still without a store in New York City. Its best-performing store type of late is its Neighborhood Market, smaller-format grocery stores that are intended for cities, which often don't have the real estate to accommodate a supercenter. Recently, it's slowed the pace of its store growth, but the urban frontier still presents ample opportunity, especially as it invests in e-commerce. Urbanites are among the most frequent online shoppers and are also the cheapest to serve, explaining why Amazon.com has been able to roll out its Prime Now one-hour delivery service in cities across the country.
Going green makes good business sense for Wal-Mart, and if it can make it more attractive to potential customers, that'll be a big win for the company as it looks to turn its business around.