Please ensure Javascript is enabled for purposes of website accessibility

Wal-Mart's Next Growth Initiative

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

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

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.