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Wal-Mart's Next Growth Initiative

By Toby Shute - Updated Apr 6, 2017 at 1:31AM

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The firm promotes an ambitious index that could reshape retail.

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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Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$126.58 (0.80%) $1.01
McDonald's Corporation Stock Quote
McDonald's Corporation
MCD
$259.23 (-0.54%) $-1.41
Apple Inc. Stock Quote
Apple Inc.
AAPL
$165.35 (-0.14%) $0.23
BP p.l.c. Stock Quote
BP p.l.c.
BP
$29.66 (1.06%) $0.31
Palm, Inc. Stock Quote
Palm, Inc.
PALM

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