Wal-Mart Stores now plans to measure its 60,000 worldwide suppliers on their ability to develop packaging and conserve natural resources. The initiative, scheduled to begin in 2008, is projected to reduce overall packaging by 5 percent.
In addition to preventing millions of pounds of trash from reaching landfills, this initiative is projected to save 667,000 metric tons of carbon dioxide from entering the atmosphere; 323,800 tons of coal; and 66.7 million gallons of diesel fuel from being burned.
Although it's a giant step toward polishing its less-than-stellar environmental record, it's also a good financial move: The world's largest retailer could save $3.4 billion in its own costs. In the five-year plan, Wal-Mart will push its 600,000 global suppliers to find more efficient packaging methods. It estimates total supplier savings of $11 billion.
Wal-Mart seems to increasingly be under the gun these days. Its profit margins are narrowing, and it's under pressure to provide better benefits for its employees. Regardless of its motivation for implementing this strategy, any step toward reducing pollution is a win for everyone. Wal-Mart's ultimate goal is to be supplied 100 percent by renewable energy, to create zero waste, and to sell products that sustain resources and the environment.
Matt Kistler, vice president of packaging at Wal-Mart, said that the move should "spur packaging changes in the industry."
While Kistler didn't elaborate on how Wal-Mart and its suppliers would make changes, he did point out that the plan wouldn't penalize manufacturers who don't make the targeted reductions. Companies will probably want to participate because they also will benefit, he said.
Worldwide Impact
Last year, Wal-Mart's Asda unit, the second-largest U.K. food retailer, opened four British recycling facilities that the company says have recycled 140,000 metric tons of corrugated - equal to 8 percent of the U.K. corrugated market and 5,500 metric tons of plastic packaging.
Last month, U.K. supermarket Sainsbury's said 500 of its own-brand goods would be in compostable packaging.
Dong Yuguo, a representative for Wal-Mart China, says that Chinese enterprises will likely be included in the list of these 2,000 suppliers. How those reductions will impact the still growing Chinese environmental impact remains to be seen.
"When you bring the capabilities of the entire supply chain together, the ability to make a difference really pops," Scott says. "Here's a multiplier effect. Instead of just looking at what Wal-Mart can do alone, we have the opportunity to inspire thousands of companies and millions of customers, as well.
"Ninety percent of the impact Wal-Mart can have is on the supply chain," he adds.
Wal-Mart's packaging vision began to form last year, when the company partnered with suppliers to improve packaging on its private-label Kid Connection toy line. By simply reducing the packaging on fewer than 300 toys, Wal-Mart saved 3,425 tons of corrugated materials, 1,358 barrels of oil, 5,190 trees, 727 shipping containers and $3.5 million in transportation costs.
Now Wal-Mart is taking what it learned from Kid Connection and applying it to the more than 160,000 products that are seen globally by 176 million customers each week.
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