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Last Updated: Monday, September 24, 2007
Speech by John Fleming at Carbon Disclosure Project
Thank you very much.
I appreciate the opportunity to talk with you today…
…and to represent a company that is doing - what we think - are some pretty exciting things in the sustainability arena lately.
Those things make me proud to have called Wal-Mart home for the last seven years.
And I hope they’ve challenged you to look at our company in a different way.
Two years ago, our CEO, Lee Scott, made a commitment.
He said that Wal-Mart was going to become a more environmentally friendly company.
And he laid out three goals:
• We would be supplied 100 percent by renewable energy;
• We would create zero waste;
• And we would sell products that sustain our resources and the environment.
I’d love to be able to say that today we’ve accomplished every one of those goals.
But what I can say is that these goals are driving our business and our thinking each and every day.
Every week, more than 176 million customers shop in our stores in 14 countries around the world.
And no matter where they are from or what they are looking for, the majority of those customers care about quality merchandise and a good shopping experience – which we give them.
But across the board, our customers care about – and need – unbeatable prices.
These are men and women who don’t have the luxury of want.
They need the most value for their hard-earned money.
To a Wal-Mart customer, saving a dollar means something.
It means a mother can send her daughter to school with crayons, a new backpack and clothes that are just as good as the other kids’.
It means she can put quality meat and fresh vegetables on her kitchen table at night.
This is the value that our customers find every day in our stores.
And when it comes to sustainability, we want to deliver that same value.
We don’t believe a person should have to choose between an environmentally friendly product and one they can afford to buy.
We want our merchandise to be both affordable and sustainable.
Because when it is, we empower our customers to make the right decisions.
And if we can do that with a product like…
• a compact fluorescent light bulb that saves customers money on their energy bills;
• or a product that costs less because it has less packaging;
• or a gallon of organic milk that families can afford to buy because of Wal-Mart;
…we are living up to our mission – which is to save people money so they can live better.
Of course, with an organization the size of Wal-Mart, we know that what we can do on environmental sustainability doesn’t – and shouldn’t – stop with us.
I’ve already mentioned the number of customers we have – 176 million every week – but we also have more than 6,800 stores around the world.
We have nearly 2 million associates.
And we do business with more than 60,000 suppliers in hundreds of industries.
The sheer number of people that our company touches goes far beyond the four walls of our stores.
It was out of this realization that we developed something we call “Sustainability 360.”
“Sustainability 360” is about stepping out – even without all the answers – and extending sustainability to our products, suppliers, associates, communities and customers.
We believe every business can look at sustainability in this way.
And we also believe it is the responsibility of every corporation to be more sustainable.
After all, what holds the most value for our businesses and the most promise for our planet?
• Is it one company doing everything a sustainable business should do – and doing it perfectly – but never sharing what it has learned with others?
• Or, is it helping thousands of suppliers, millions of associates and tens of millions of customers make billions of individual decisions that sustain themselves, their communities and, in turn, the planet?
Of course, we believe the latter answer is correct.
And we’ve begun a number of initiatives at Wal-Mart that illustrate the effect we can have, simply by looking at sustainability throughout our entire supply chain.
Our packaging scorecard is one example.
We launched it about one year ago at the Clinton Global Initiative here in New York.
It’s a tool that we will use to evaluate suppliers on the sustainability of their packaging and to connect them with the resources to help them improve.
Soon, our buyers will begin using the scorecard results to influence their purchasing decisions – a major incentive for our suppliers.
After we introduced the scorecard process, one of the buyers of our private-label infant seats took a long, hard look at the giant cardboard boxes the seats came in.
He realized that we could eliminate the box altogether and save on shipping and fuel costs just by switching to a plastic cover instead.
The plastic cover allows a customer to see – and even feel – the seat before deciding whether to buy it.
The seats are now stackable; meaning we can fit more of them on our shelves and make more of our inventory accessible to customers.
This is what we’re talking about – looking at the impact Wal-Mart can have well beyond just “us.”
The packaging scorecard became available to suppliers in February of this year.
Today, just seven months later, more than 3,400 of our suppliers are participating. And there are suppliers of all sizes included in that number.
Together, they have entered more than 13,000 products into our scorecard system.
And we’re already seeing suppliers make changes to some of these products, like the baby seat example I just mentioned.
Our goal is to achieve a five percent reduction in overall packaging by 2013.
That may not sound like a lot, but think about the multiplier effect of our more than 60,000 suppliers around the world.
We estimate that the impact of our packaging effort will be equal to removing 213,000 trucks from the road, and saving about 324,000 tons of coal and 67 million gallons of diesel fuel per year.
Small moves like this help the environment and make our country safer by reducing our dependence on foreign oil.
This is great for the environment. But there’s also a business advantage – and a pretty big one.
We believe this effort could save the global supply chain nearly $11 billion. Our supply chain alone could save $3.4 billon.
But we know that it’s about so much more than packaging. In fact, it goes way beyond it.
And in the coming months and years, we’re going to be looking at new ways we can continue to work with our suppliers on sustainability.
One area is energy and the greenhouse gas emissions that contribute to global climate change.
When we look at excess energy in our supply chain, one fact becomes undeniably apparent:
We have to drive costs out of the system so that we can pass savings and the best prices on to our customers.
In a speech earlier this year at the Prince of Wales’s Business and Environment Program, our CEO asked this question:
What if we worked with our suppliers to take non-renewable energy off our shelves and out of the lives of our customers?
We could create metrics and share best practices … so our suppliers could make products that rely less and less on carbon-based energy.
Today … I’m proud to announce a new partnership between Wal-Mart and the CDP.
Using CDP’s carbon reporting expertise and our own experience with supply chain efficiency … we are working together… to measure our global supply chain footprint and to encourage our suppliers to reduce greenhouse gas emissions.
And, with CDP’s help, we are looking at ways to remove non-renewable energy from products.
We believe this exercise will help our suppliers realize the impact that their products have on the environment.
And make the changes necessary to lessen those impacts … while bringing efficiency to their businesses and savings to our customers.
Over the last year we have engaged in a dialogue with a small group of suppliers about how to best go about this.
Those conversations have been focused on three things: transparency, learning and partnership.
And they’ve attempted to answer tough questions like:
• How far back into a product’s life cycle should we look?
• What is the impact of transporting products?
• What is the impact of consumer use?
• And how can we balance our desire to learn more, with what is reasonable for suppliers?
Our select group of suppliers includes businesses in seven product categories: DVDs, toothpaste, soap, beer, milk, vacuum cleaners and soda.
It might seem like an odd assortment.
But we’ve chosen areas where we had willing suppliers.
We looked at products that could most easily be adapted.
And we identified some of the larger sources of carbon in our supply chain.
At first glance, there’s nothing inherently special about these items.
But each of us in this room has used at least one of these products already today.
I hope we all used at least two of them – soap and toothpaste – this morning!
My point is that these products are central to our everyday lives.
Whether they’re part of our morning routines – like soap and toothpaste … or staples of our kitchens – like milk and soda.
Some of them are things we rarely think about – like our vacuum cleaners … and some of them are things we’d rather think about – like beer and movies.
But each of these products has an impact on our planet.
So, suppliers in these seven categories participated in a pilot program with us and with the CDP to shape the first discussions about energy reduction in the supply chain.
One of them, Fox Home Entertainment, was a very involved partner in this effort.
They worked with us and their suppliers to look at all the major emissions sources associated with the production, manufacturing and distribution of their DVDs.
They recognized early on that this process could help create an industry standard for measuring the carbon impact of DVDs.
And that it had the potential to be applied to other consumer packaged goods as well.
Here’s what they told us about this exercise:
Twenty of their key suppliers not only participated, but embraced the project.
These suppliers shared information about their products, and they shared real learnings with Fox about their energy use and opportunities for reductions.
A number of businesses throughout Fox’s supply chain sincerely wanted to be part of a solution that would help lessen climate impacts.
Many just didn’t know where to start … until the dialogue with Wal-Mart and Fox created an outlet.
Perhaps most exciting, the results of the pilot program have helped Fox begin conversations with other studios about how they can work together on more efficiency projects.
Clearly, Fox Home Entertainment provided us with some great feedback about what this discussion meant – and could mean – to their business.
Other big names like Coca-Cola and Bissell also shared fantastic stories with us.
But it’s important to note that companies of every size participated in this pilot discussion project.
Who here has heard of Oakhurst Dairy?
Oakhurst Dairy is one of our milk suppliers, and they’re Northern New England’s largest dairy company.
They’re a family-owned business headquartered in Portland, Maine … and they participated in this discussion from the very start.
Now, I don’t want to leave you with the impression that sustainability was new to Oakhurst Dairy.
They’ve been at this for a very long time.
They already use high-efficiency lighting throughout their facilities; they use bio-diesel in their fleet; and they even use GPS monitoring units in their tractors to eliminate idling time.
But even they learned a thing or two from this discussion project with Wal-Mart and the CDP.
Here’s what they told us:
Their decision to participate was spurred by their desire to help customers by improving efficiencies and driving down costs.
During the first half of next year, they will install 96 solar collectors to supply hot water at their plant facility.
They will also install a heat recovery system for their milk-case washing machine.
And they expect to realize substantial savings from these and other changes they’re making.
Finally, participation in our discussion program helped Oakhurst Dairy share information about reducing greenhouse gas emissions at the farms from which they purchase.
Fox Home Entertainment and Oakhurst Dairy are two very different companies.
But they each found value in looking at their carbon footprint.
From that process, they learned that they could make meaningful improvements to their operations.
They found that those changes would have a real impact.
And realized that they – just like Wal-Mart – could share what they had learned with others.
This entire exercise has been a learning process.
The discussions we have been having over the last several months have showcased the opportunities we have to spur innovation and efficiency throughout our supply chain.
And we’re grateful for the efforts that the companies who are participating in conversations with us have made.
Together we are addressing some of the biggest challenges in the world today.
We know that some of our suppliers already participate in the CDP.
We know that some of them have been doing so for much longer than we have.
But we also know that if we can bring new suppliers to the process …
… and if that causes them to make environmentally friendly changes and innovations while growing their businesses …
… we will have done enormous good.
We believe – and we think you’ll agree – that the discussions we are beginning to have about carbon today are directly aligned with our purpose as a company … and with “Sustainability 360.”
It’s about doing the right thing.
Doing better for our customers, our companies and for our planet.
And doing it together.
We all have an opportunity to be more sustainable.
But even more, we have a responsibility to do so.
We need to be sustainable companies made up of people who live sustainable lives.
If we do that, and if we do it consistently moving forward, I believe we will make sustainability… sustainable.
Every day millions of customers put their trust in us just by shopping with us.
Communities put their trust in us by welcoming us into their neighborhoods.
Associates put their trust in us simply by choosing to work with us.
And our suppliers trust us to bring their products to the 176 million customers who shop in our stores.
They all expect us to be the kind of company that looks beyond “right now.”
And they expect us to use our place and our presence in communities to have a positive impact on the issues that matter to them.
Without question, we take their trust and expectations very seriously.
And we believe we are helping to build a better world: one day, one product, one store, one company at a time.
Thank you.
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