Wal-Mart wants its suppliers to help it get greener.
The retail giant plans to announce on Thursday that it will ask its suppliers to provide environmental information on all products carried in its stores. Wal-Mart Stores will use that information to label each item with an eco rating, designed to measure its environmental friendliness.
"We have to change how we make and sell products," Michael T. Duke, Wal-Mart's president and chief executive, plans to tell about 1,500 suppliers and employees on Thursday at a "sustainability meeting," according to a copy of his prepared remarks, quoted in The New York Times. "We have to make consumption itself smarter and sustainable."
To kick off the program, Wal-Mart will ask its suppliers to answer about 12 questions for each item. The questions are designed to determine how the product was made, how it was packaged, and what elements or ingredients were used to manufacture it.
Wal-Mart will then tap into a database and metrics to calculate the "greenness" of a product and translate that information into a ratings system for consumers.
The company will partner with a consortium of about 12 universities to collect the data and set new design standards. Professor Jay Golden of the Global Institute of Sustainability at Arizona State University will function as co-director of the new consortium.
The universities will work directly with suppliers to determine each product's environmental impact, from how it uses raw materials to if and how it can be recycled.
Talks have already been held in Washington about possible new regulations for environmental labeling. But Golden says having Wal-Mart lead the way will "move it so much faster."
Wal-Mart plans to announce further details about the program on Thursday. But the initiative is clearly important to the company.
The eco-rating system is just the latest effort by Wal-Mart to create a greener landscape. The company has already strived to make its own stores environmentally friendly, including a plan to tap into solar power. Wal-Mart has also driven an effort to create more sustainable electronics devices to reduce the amount of items dumped into landfills.
Big-box retailers are increasingly adding solar panels and wind turbines to sprawling stores to offset rising electricity costs and groom a "green" image.
Last week, Wal-Mart Stores announced it will add wind power to 360 Texas outlets. The company aims to power all stores with renewables eventually. So far, the retailer counting the largest amount of photovoltaics is Wisconsin-based Kohl's. Whole Foods is likely the first big name to add solar panels, starting in 2002 in Berkeley, Calif.
In the latest sign of government support for such efforts, Massachusetts Gov. Deval Patrick called last week for all new malls and massive retailers to install solar panels. That state's rebates of up to 40 percent for photovoltaic installations are among the most attractive in the country for retailers eyeing regional and federal discounts for installing cleaner forms of energy.
This chart tracks some of the most noteworthy developments.
| Company | Begun | Capacity | Companies involved | Where | Estimated CO2 saved | Estimated equivalent resources saved |
|---|---|---|---|---|---|---|
| Whole Foods | 2002 | 2.2 million KW hours/20 years | BP Solar, Princeton Energy Systems, PowerLight, Nextek Power Systems | 24 percent of energy in Brentwood, lighting systems in Berkeley, Calif., 20 percent of energy in Edgewater, N.J. stores | 140,000 lbs/year, 1,650 tons | 440 cars |
| Wal-Mart | 2005 | Wind: 226 million KWH/year Solar pilot: 20 million KW hours/year for 22 sites | Wind: Duke Energy Solar: BP Solar, SunEdison, PowerLight | Wind: 15 percent energy for 350+ Texas stores Solar: 30 percent energy for 22 stores in Hawaii and Calif. | Wind: 139,000 metric tons/year Solar pilot: up to 10,000 metric tons/year | Wind: 25,000 cars/year; 18,000 homes/year |
| Safeway | 2005 | Solar: 10,000 MW hours/year Wind: 87 million KW hours/year |
Unknown | Solar: 23 stores in Calif. Wind: all energy for 300 fuel stations; corporate offices; stores in San Francisco and Boulder, Colo. | 55,000 metric tons/year | Solar: 1,045 cars/year; 4,000 acres trees Wind: 45,000 acres trees |
| BJ's Wholesale Club | 2005 | Solar: 480 KW | Billerica, Evergreen Solar, Solarex | 14 clubs in 6 states | Unknown | Unknown |
| Target | 2007 | Solar: 9 million KW hours/year | Unknown | 20 percent of energy for 18 stores in Calif. | 4,586 tons to date | Planting 292 acres of trees; not driving 11.5 million miles to date |
| Kohl's | 2007 | Solar: 35 million KW hours/year in California alone (total unavailable) | SunEdison | 30 to 40 percent of energy for 50+ stores in N.J., Conn. Md.; 3 in Wis., 25 in Calif.; 4 in Ore. | 28 million lbs./1st year East Coast: 370 million lbs./20 years | California: 2,500 cars/1 year |
| REI | 2008 | Solar: 1.1 million KW hours/year | EI Solutions, Blue Oak Energy, Christenson Electric, Offset Electric | 35 percent of energy for 7 stores in Calif.; 3 in Ore.; Tex., Colo. | 880 metric tons | Powering 117 homes/year |
| North Face | 2008 | Solar: 1 MW | RayTracker, Suntech, EI Solutions, Recurrent Energy | Visalia, Calif., distribution center | 1,300 metric tons/year | 250 cars; saving 11 forest acres/year |
| JC Penney | 2008 | Solar: 4 MW | SunPower, Broadstar Wind Systems | Solar: 25 percent of energy for 5 stores in Calif.; 6 in N.J. Wind power for Reno, Nev. distribution center | 146,000 tons/30 years | 800 cars/30 years |
Urban planners, labor activists, and environmentalists blame Wal-Mart for decimating rural America, exploiting workers, and polluting ecosystems. Some green-business gurus, on the other hand, praise the retail colossus for turning over a new leaf with moves toward sustainability, such as reducing product packaging.
Wal-Mart's latest green turn comes as nine of its Sam's Club stores in Southern California are providing in-store solar power kiosks. Shoppers can look up information about home rooftop installations and get discounts meant to average $500 on solar orders.
Kiosks like this one promoting household solar panels are appearing at Sam's Club stores in southern California.
(Credit: Wal-Mart)Sam's Club will offer the deals through photovoltaic panel installer Borrego Solar of San Diego, as well as BP Solar, at its outlets in Corona, Murrieta, Glendora, Ontario, La Habra, Chino, Long Beach, Fountain Valley, and Torrance.
In addition, the stores will showcase home-efficiency products, such as low-flow toilets and LED lightbulbs, and feature live video chats with representatives from appliance makers.
"While homeowners and businesses continue to embrace solar energy at a tremendous rate, this growth is somehow restricted by the relatively limited number of consumers who are exposed to solar in their daily lives," Aaron Hall, Borrego CEO, said in a statement.
Other huge retail chains also have been gearing up to serve as marketplaces for renewable energy products. IKEA reportedly plans to invest $77 million to help launch clean-tech companies, with the goal of selling the resulting goods, such as solar panels.
Home Depot started offering home solar power consultations and installations to shoppers through BP Solar in 2006.
And some retail giants are also increasingly powering their facilities with renewable energy, especially in states like California with attractive clean-energy rebates.
Wal-Mart, based in Bentonville, Ark., launched a pilot solar program in the spring of 2007 to provide up to one-third of the electricity for 22 stores. The winning bidders were BP Solar, SunEdison, and PowerLight, part of SunPower.
Other big-box corporations with or planning rooftop solar power at some locations include Whole Foods, Safeway, Target, REI, the North Face, Staples, Macy's, and Kohl's.
The flat, sprawling rooftops of low-slung megastores and strip malls could make relatively easy destinations for solar panels. Southern California Edison in March sparked an effort to install 250 megawatts of panels atop two miles of commercial buildings, powering the equivalent of 162,000 homes.
For many new green-tech ventures, Wal-Mart is the ideal customer, sitting on top of the economic food chain of environmentally friendly products.
Which "innovative ideas" Wal-Mart is seeking is instructive because it points to large corporate demand for clean-tech products.
The list:
• Alternative battery technology for forklifts.
• Wind harvesting.
• Closed-loop water processing.
• Sustainable building materials.
• Organic waste.
• Oil-based waste.
• Household hazardous waste.
Noticeably absent from the list are solar energy products and biofuels, two areas that have received most venture capital investment over the past two years.
Wal-Mart is investing in solar power at 22 stores in California and Hawaii. It is also developing energy-efficient stores, which Wal-Mart says use 25 percent less energy than its typical retail outlets.
The tool, called Cleantech Accelerator Project, will let entrepreneurs make submissions to Wal-Mart, which will be fielded by the Cleantech Group.
The goal is to identify between two and four solutions that can be used by Wal-Mart within the next two years.
By 2010, Wal-Mart and its suppliers are going to be a lot more energy efficient.
The retailing giant has set a goal of getting suppliers to increase the energy efficiency of its products by 25 percent in three years. For some suppliers, the standards are a little more stringent. By 2010, the company will only sell Energy Star-rated air conditioners. Flat panel TVs will have to be 30 percent more energy efficient than they are now.
"If we achieved our 25 percent goal just in the U.S. we would save enough electricity to power 3 million homes per year or the equivalent of 10 million barrels of oil," said CEO Lee Scott in a speech to employees earlier this week. "We do not know exactly how we will get there. We do not even now if our suppliers can make times like hair dryers that user 25 percent less energy. But we do know that our approach works--to partner with suppliers, to help customers make better decisions, and to use our business model to drive out waste."
The company might also start building charging stations (powered by solar panels) so that customers can charge up their plug-in hybrids or electric cars, Scott said. General Motors has been working with Wal-Mart to install ethanol pumps, which ordinary gas stations recoil from. Families in the U.S., he asserted, spend on average 17 percent of their income on energy.
Wal-Mart has been one of the leaders among large corporations to cut its carbon footprint. The company, for instance, has tested out solar lighting and electricity at certain stores and is swapping out conventional lights for LEDs in freezer cases. It saved a $1 million a year in power bills just by taking out the light bulbs in coke machines.
It has also encouraged suppliers to change their packaging and distribution techniques to cut energy consumption as well. Wal-Mart's mandates don't work. A few years ago it told suppliers to start using RFID tags or else, and only some have. Still, the company can have a big impact because of the sheer number of products that flow through its doors.
The company's also not shy about telling its suppliers about its goals. "We will favor--and in some cases even pay more--for suppliers that meet our standards and share our commitment to quality and sustainability," Scott said.
Wal-Mart, he further added, will also try to keep the price of energy-efficient cost-competitive with standard products. The company, for instance, cut the price of some 3M air filters by $2.
"Our goal is to double the sale of products that help make home more energy efficient," he said.
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