The Greening of Wal-Mart
When you get off Highway 101 at Exit 484A, you immediately fall into headachy traffic on access roads not designed for this crush. It is the kind of dysfunction that Wal-Mart would never tolerate in its own internal operations but that big-box stores breed in the world they increasingly define. This Wal-Mart is in Rohnert Park, California, about 50 miles north of San Francisco.
I’d been hearing about Wal-Mart’s efforts to mend its ways, offering energy efficiency, zero waste, organic cotton, and even organic food. It all seemed so unlikely—a little like walking into Fox News’ offices and finding a wing devoted to The American Prospect—that I wanted to see for myself. (My son, who is 8, was more interested in the Wal-Mart-exclusive Nerf gun.)
Not much has changed since our last visit several years ago, visibly at least. There are some T-shirts made with organic cotton; I buy one to send a market message. The display of compact fluorescent bulbs is impressive. Beyond that, the new offerings aren’t the dramatic shift the publicity suggests. But most of Wal-Mart’s new efficiencies, such as fuel savings in the truck fleet and recycling of store scrap, are not obvious to shoppers yet, anyway.
There is little doubt, moreover, that more environmentally friendly product changes are coming. All of which creates dissonance of the first order and a conundrum for those who care about the human prospect. Localism, at a company that enshrined the “China price”—the price that other suppliers have to match—and at which instructions regarding shelf placement come down from the corporate headquarters in Bentonville? Conservation, at the global giant whose very being is premised upon hyper-consumption, sprawl, and waste? (My son, whose friends buy toys here, says Wal-Mart’s motto should be “Costs less, breaks sooner.”)
Kierkegaard urged us to cultivate a healthy sense of paradox, but this truly is a stretch. We think about Stonyfield Farm yogurt in Wal-Mart’s refrigerator cases and Seventh Generation detergent on the shelves. Then we think about the traffic and the employees whose kids are on public assistance (over 40 percent in some states) because the company pays so little. We also think about the local merchants this chain and others have displaced and the sheer power of this behemoth to bend the world to its will.
But what if that bend were in the direction of ecological efficiency? Would the power still be so bad? Gary Hirshberg, the CEO of Stonyfield Farm recalls a gathering of manufacturers in China. When the Wal-Mart representative spoke, Hirsh-berg says, it was as if they were hearing their master’s voice: “You could have heard a pin drop.” The U.S. president doesn’t get that kind of respect.
There is a camel’s nose and a tent here, but it is not clear which is which. Most remarkable, though, is that we are talking about Wal-Mart and compact fluorescents to begin with. Not that long ago, the focus would have been the company’s Third World–style labor practices and superstores that put local merchants out of business. Wal-Mart’s embrace of ecology, sincere as it may be, was not uncontrived. Rather, it has been part of a larger public-relations effort to upstage those troublesome questions.
The effort has substantially succeeded. By Wal-Mart’s own reckonings, in 2006, it ranked in the sub-basement among retail outlets in “global reputation.” Today, it is near the top, and some of the nation’s major environmental groups are standing at its side. This gives the conundrum yet another twist. Is the complicity of the Environmental Defense Fund and others the latest evidence of the failure of the environmental movement to conceive of an ecology in which people truly matter—ordinary workers in particular? Or is it a necessary “bargain with the devil,” as one green activist put it, that will hasten environmental breakthroughs, problems and all?
Rohnert Park is part of the Santa Rosa sprawl and a last outpost of affordable housing in what is called the North Bay. Many service workers from neighboring Marin County live up here. Not coincidentally, this Wal-Mart is the last until the other side of San Francisco.
In between is prime retail territory, but for most of Wal-Mart’s history, that fact didn’t much matter. The hinterlands offered plenty of room as well as accommodating county councils and workforces that knew their place. By the early 2000s, however, that game was over. New Wal-Mart stores were cannibalizing existing ones, and the only path of domestic growth lay in the cities. That meant zoning and permit battles, messy racial and ethnic politics, and also environmental sensibilities the company used to be able to ignore.
Wal-Mart’s record wasn’t going to help. Recent lawsuits had made it a synonym for abuse of workers. (The case charging blatant discrimination against women was filed in San Francisco in 2001. The company epitomized sprawl and waste and the flight of factory jobs to China. The consulting firm Mc-Kinsey & Company had found in 2005 that somewhere between 2 percent and 8 percent of Wal-Mart customers had stopped shopping there for such reasons. Smaller rivals such as Costco and Target were prospering on these troubles.
Wal-Mart went to Edelman, a tony global flack house that specializes in what it calls “reputation management.” (Previous clients included tobacco companies and the American Petroleum Institute.) It was not long before the Astroturf appeared, in the form of a group called Working Families for Wal-Mart. The group supposedly sent a couple—“Jim and Laura”—on the road to talk with Wal-Mart employees and blog about the conversations, which were unfailingly positive.
It came out later that Wal-Mart itself had paid for the excursion and that “Laura” was the sister of an Edelman employee who was working at Wal-Mart’s headquarters in Bentonville. Richard Edelman, the company chair, clarified the situation thus: “I do believe that it is a real group of real people, as far as I know.”
Other gambits were more successful. Then-CEO Lee Scott appeared at a press conference in 2007 with Andy Stern of the Service Employees International Union to support universal medical insurance. The company also supported the extension of the Voting Rights Act. (This didn’t stop it from lavishing campaign cash upon Republicans who opposed both.) Edelman enlisted right-wing bloggers to spin the company’s post–-Hurricane Katrina good deeds: Corporations work and government doesn’t.
Wal-Mart enabled customers to buy some 300 generic drugs for $4 a prescription. Recently, the company—or more precisely, Edelman—scored a coup when it got Michelle Obama to announce a joint healthful food initiative. It did not escape notice that the partnership came just as Wal-Mart was gearing up for battle over its expansion plans in New York City, nor that one part of the healthful eating program was building Wal-Mart stores in inner-city “food deserts”—communities lacking quality grocery stores.
As it pursues its reputational management, Wal-Mart has not just its own considerable resources but also those of the company foundation, which shares the corporate website. The foundation has invested strategically in such groups as the Hispanic Scholarship Fund, the National Council of La Raza, the Congressional Black Caucus, the NAACP, and National Public Radio, all of which have received half a million dollars or more. (The Wal-Mart Foundation also gave $10,000 to the 10th anniversary gala of De¯mos, with which the Prospect is affiliated.)
The foundation also has attended to the small-town base. An example is Wal-Mart Teacher Rewards, through which 10 teachers in selected schools—some 40,000 teachers in all—get $100 each for classroom supplies. The credits are good only at Wal-Mart and Sam’s Club. Typically, local papers run glowing accounts, with pictures of happy teachers. The effort would be more impressive, though, if Wal-Mart didn’t routinely challenge its property-tax assessments in localities like these.
A 2007 study by Good Jobs First found that each year, the company makes formal appeals on more than a third of its stores and on 40 percent of its distribution centers. These have resulted in tax reductions that averaged $40,000 and $289,000, respectively. A county assessor in Arkansas named Dan Hurst Jr. who resisted these efforts told The New York Times that starting in 2003 Wal-Mart sent a trio of lawyers and a couple of accountants to beat him down, to no avail, as it turned out.
Hurst said he knew Sam Walton, the late company founder, personally. “I’m sure he would not approve,” Hurst said, of these attempts to take back money “that goes for our kids’ schools.”
The local stories generally did not mention such tempering considerations. More important, by 2009, the high-level narrative was changing, too, from fallen giant to corporate rebirth. The fulcrum of this shift had a tantalizing unlikeliness. “The company that democratized consumption,” The New York Times enthused in January 2009, with historical liberties, “has begun to democratize environmental sustainability as well.”
The start of Wal-Mart’s environmental push in 2005 did not suggest deep commitment. Activist groups were targeting the company. Management wanted to forestall more bad publicity. The Edelman executive on the Wal-Mart account was Leslie Dach, who had worked at the Audubon Society and then the Environmental Defense Fund before he went into Democratic politics—serving Edward Kennedy’s staff in 1980 and then Michael Dukakis’ in 1988—and later corporate public relations. Dach has since joined Wal-Mart full time, where, among other promotional duties, he oversees the foundation.
Dach’s environmental concerns may be genuine. But one of his pet strategies is to “co-opt your would-be attackers.” In late 2004, Wal-Mart’s top management duly hosted a group of the company’s critics in Bentonville, and then-CEO Scott promised to explore their recommendations. As his managers dug in, they discovered an unexpected affinity. When you stripped away the eco-talk, this really was about cutting waste and getting the maximum value from every ounce of resources.
This was Wal-Mart’s wheelhouse, practically its self-definition. The company had been squeezing workers from the beginning. Now, it could demand more productivity from energy and materials as well. It could bully the supply chain as before, only in a different way—and one that made environmental groups euphoric. A number of the major organizations—the Rocky Mountain Institute, the World Wildlife Federation, the Environmental Defense Fund, and others—signed on as advisers.
There was a rich irony. For years, such groups had sought to tilt the economy toward environmental ends through arcane pricing schemes—energy taxes, carbon trading, and the like. They had lectured on the evils of the old, regulatory “command and control” approach, as opposed to this elegant new “market based” model. Now, they were at the epicenter of the corporate market, at the ear of its retail monarch, and it turned out to be another version of command and control.
What Wal-Mart wanted it got, and because the retailer dealt with almost 60,000 suppliers, its potential impact was hard to overstate. “Being able to say to farmers in the Central Valley, ‘If you do this, we will buy your stuff’—that’s how you change the world,” says Hirshberg of Stonyfield Farm.
An early example of green efficiency was Wal-Mart’s decision to carry only extra-concentrated laundry detergents. From a business standpoint, the smaller packages meant more units per shipping palette and thus, lower transportation costs. From an ecological standpoint, the reduction in water use alone would equal about 100 million showers a year. “Lee [Scott] pushed me,” says A.G. Lafley, former-CEO of Proctor and Gamble, “and we totally, totally changed the way we manufacture liquid detergents, and now around the world.”
If Proctor and Gamble could be brought to heel, anything was possible. Efficient LED lights in parking lots and in freezers, where they would emit less heat. Packaging for vegetables made of plant-based plastic. Pet beds and litter pans made from old plastic hangers and bottles. Rebecca Calahan Klein, who, as head of the Organic Exchange, helped guide Wal-Mart into organic cotton (and who was not paid by Wal-Mart), observes that, unlike many other companies, Wal-Mart embraced this work for real. Managers were evaluated in part on their ability to wring productivity from energy and materials. “The commitment came from the top,” Klein says.
Critics express a wary and sometimes grudging respect for Wal-Mart’s environmental efforts. Former CEO Scott “got religion,” says Michael Marx, executive director of Corporate Ethics International, who helped organize the campaign that Scott was trying to deflect. He adds a caveat, though. Wal-Mart “was willing to do the things that clearly made money.” The problems lie outside that self-defined realm.
For one, the vaunted ability to drive the supply chain has a double edge, especially where workers are concerned. When Wal-Mart added groceries in Southern California, the existing stores there, such as Albertsons and Safeway, had to demand major concessions. Wal-Mart drives the market not just for products but for wages as well.
It also drives toward a scale that corresponds to its own. Stonyfield Farm may have to buy powdered organic milk from New Zealand to meet the demand from Wal-Mart as well as from Whole Foods. Wal-Mart “pushes us to factory farms,” Marx says. “The humane, organic factory farm does not exist.”
Wal-Mart’s deliberate co-opting of major environmental groups, moreover, has diminished an important counterweight. Someone needs to verify claims and point to problems not addressed. The big environmental groups should maintain a capacity for “arm’s length critical analysis,” says Stacy Mitchell, senior researcher of the Institute for Local Self-Reliance and author of Big Box Swindle. Instead, they have become “so much in Wal-Mart’s pocket.” When I contacted the Rocky Mountain Institute, founded by Amory Lovins, a spokesperson said there would be no comment on Wal-Mart because of a “client relationship.”
Much lies outside the company’s own ecological cost cutting: the parking lot and traffic, the sprawl and waste, the fate of the employees and the social ecology generally. One estimate found that Wal-Mart’s own growth could cancel out the efficiencies that it achieves. In fairness, Wal-Mart is not alone in all this. I asked Marx whether Target is really any better. “Not at all,” he replied. Target’s progress has been largely in Wal-Mart’s “slip stream.”
Conscientious environmentalists are wrestling with these tensions. Jeffrey Hollender, the founder and former CEO of Seventh Generation, the household-products company, agonized before he finally agreed to sell in selected Wal-Mart stores. When I asked how he justified it, his response was much like that of Rebecca Calahan Klein and others with whom I spoke. A pause, a sigh, and then reflections on the theme of doing what you can with the world as it is.
“The business model of Wal-Mart was not designed by Wal-Mart,” Hollender said. “It was adapted by them as it has been by most American corporations.” Wal-Mart simply does a better job of playing the game (and, of course, using its weight to keep the rules the way it likes them), he added. “We need to put as much energy into understanding the disastrous design of the economic system as we do in challenging individual practitioners of that system.”
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