Walmart
1. Walmart’s overall approach in achieving sustainable growth:
Walmart was renowned throughout the world for its pioneering supply chain practices and it’s insatiable thirst for investing in resources that would help it further cut on its costs and thereby add to its competitive advantage. However, sustainable growth as a means of leveraging profitability was not on the company agenda till 2004.
Prior to that Walmart had always maintained a defensive position regarding environmental issues. However, the company’s scale of operations accentuated environmental impacts. For example, in its retail operations, the company was the biggest private user of electricity in the US and emitted more than 19.1 million metric tons of CO2 annually. Because of these reasons, the company’s reputation among its customers was deteriorating and according to a McKinsey study around 2-8% of the customers had stopped shopping at Walmart.
In the light of these facts, the company CEO, Lee Scott, initiated a review of the company’s challenges in 2004. During this review, he was intrigued by a particular idea given by Jib Ellison, founder of Blue Skye Sustainability Consulting. The basic idea was to employ an environmental strategy in order to (1) gain more acceptance, (2) differentiate Walmart from its competitors, and (3) cut costs.
During next six months, Walmart worked with Blu Skye, Conservation International and the Environment Defense Fund (EDF) and did impact assessment in five primary areas (greenhouse gas emissions, air pollution, water pollution, water use and land use) across 134 product categories. By June 2005, the top management at Walmart identified three key areas on which they would focus namely energy, waste and products. The management was very clear in extending the scope of these efforts to its entire value chain in order to successfully meet their strategic ends. Walmart committed itself to three aspirational goals: * To be supplied 100% by renewable energy.
Walmart was renowned throughout the world for its pioneering supply chain practices and it’s insatiable thirst for investing in resources that would help it further cut on its costs and thereby add to its competitive advantage. However, sustainable growth as a means of leveraging profitability was not on the company agenda till 2004.
Prior to that Walmart had always maintained a defensive position regarding environmental issues. However, the company’s scale of operations accentuated environmental impacts. For example, in its retail operations, the company was the biggest private user of electricity in the US and emitted more than 19.1 million metric tons of CO2 annually. Because of these reasons, the company’s reputation among its customers was deteriorating and according to a McKinsey study around 2-8% of the customers had stopped shopping at Walmart.
In the light of these facts, the company CEO, Lee Scott, initiated a review of the company’s challenges in 2004. During this review, he was intrigued by a particular idea given by Jib Ellison, founder of Blue Skye Sustainability Consulting. The basic idea was to employ an environmental strategy in order to (1) gain more acceptance, (2) differentiate Walmart from its competitors, and (3) cut costs.
During next six months, Walmart worked with Blu Skye, Conservation International and the Environment Defense Fund (EDF) and did impact assessment in five primary areas (greenhouse gas emissions, air pollution, water pollution, water use and land use) across 134 product categories. By June 2005, the top management at Walmart identified three key areas on which they would focus namely energy, waste and products. The management was very clear in extending the scope of these efforts to its entire value chain in order to successfully meet their strategic ends. Walmart committed itself to three aspirational goals: * To be supplied 100% by renewable energy.