As it plots its $2 billion U.S. invasion later this year, the giant British retailer Tesco isn't just thinking red, white, and blue. It's also thinking green. That's green as in the green-shaded "Fresh & Easy" logo that will adorn the string of convenience stores it plans to open on the West Coast. That's green as in the greengrocer-type merchandise—fresh foods and organic produce— to be offered in these stores. And that's green as in environmentally friendly operations. "We have decided that American consumers want to go back to neighborhood retailing, which is about bringing high-quality affordable foods … into their neighborhoods and, in addition, being good stewards of the environment," says Tesco USA CEO Tim Mason. "And that's what we intend to do.

Going green is good public relations these days, but Tesco's commitment to eco-friendly practices looks to be more than just talk. The retailer's green initiatives go well beyond the plastic bag recycling programs at its retail stores. They also reach deep into its backend distribution operations. Tesco recycles 71 percent of its cardboard, plastic, and paper waste (with a goal of 80 percent by next year). It has introduced a dedicated train to move stock between two U.K. DCs—a move that allows it to shift freight from the highways to a more fuel-efficient mode of transport. And it's investigating wind turbines and other sources of renewable energy in an effort to cut greenhouse gas emissions. In January, Tesco began using a 50/50 blend of biofuels and diesel to power three-quarters of its European distribution fleet. The retailer says the reduction in emissions over the fleet's lifetime will be the equivalent of taking more than 20,000 medium-sized cars off the road.

In recent months, it has become increasingly clear that Tesco intends to bring its eco-friendly practices to the colonies. Exhibit A is the distribution center it's building in Riverside, Calif., to support its U.S. expansion. The 820,000-square-foot DC will be more than a roof over workers' heads; it will also be a solar power plant. Built right into the DC's roof are flexible photovoltaic solar panels capable of generating two megawatts worth of electricity, about one-fifth of the building's power needs.

Tesco is spending $13 million for the integrated photovoltaic roofing system, which is believed to be the world's largest roof-top solar panel installation. The panels, which were developed by Los Angeles-based Solar Integrated Technologies, will be installed on two of the site's five DC buildings, covering 500,000 of the 640,000 square feet of roof space. The company says the solar panel system will produce over 2.6 million kilowatt hours and eliminate 1,200 tons of carbon dioxide emissions each year.

Kicking carbon to the curb
Tesco is not alone in its efforts to green up its corporate act. As evidence mounts of a link between CO₂ releases and global warming, companies around the world are racing to find ways to reduce their carbon footprints. Often as not, they're finding opportunities within their logistics and distribution operations, where much of that carbon dioxide is generated. Their solutions have ranged from solar power and wind turbines to environmentally friendly fuel alternatives for fleets and forklifts.

"A lot of companies are becoming focused on being good stewards of the environment," says Jim Bowes, president and CEO of Peach State Integrated Technologies, an Atlanta-based logistics and distribution engineering firm.

"It's definitely something that everyone is starting to take much more seriously, from how companies handle their waste, to power requirements and power management."

One corporation that's taking environmental sustainability seriously is office supplier Staples. Staples is an inaugural member of the Environmental Protection Agency's Fortune 500 Green Power Challenge, a 13-month-long campaign that challenges corporations to roughly double their purchases of green power, which is electricity generated partially or entirely from solar, wind, geothermal, biomass (plant materials), and other clean energy sources.

Staples' efforts last year earned it one of the EPA's Green Power Leadership awards. In 2006, Staples purchased 121.4 million kilowatts of green power, raising its overall 2006 renewable energy use to about 20 percent of its estimated yearly electricity usage. This is more than twice the amount of green power Staples purchased in 2005, and is equivalent to the electricity consumed by 11,240 houses.

Power roof
Staples is looking to the sun for a big part of its savings. In January, Staples unveiled the largest solar power installation in New England at its 300,000-square-foot retail distribution center in Killingly, Conn. The DC's 433-kilowatt commercial solar photovoltaic system is nearly the size of two football fields and covers close to 74,000 square feet of roof space. The system has the capacity to produce enough energy to power 14 percent of the DC, or the equivalent of 36 homes per year. The annual reduction in carbon emissions will be comparable to the emissions produced by the average car driving 420,000 miles.

The Killingly DC is the fourth project that Staples has completed with solar-service provider SunEdison. It currently has six more projects under construction—five at retail locations in California and another at a DC in Stockton, Calif. Altogether, Staples has identified 150 locations where the solar power model could be applied.

"The solar power system at our Killingly DC is part of an integrated strategy for a 7-percent reduction in our U.S. carbon emissions by 2010 on an absolute basis, starting from a base year of 2001," says Mark Buckley, vice president of environmental affairs at Staples. "Through our relationship with SunEdison, we're able to purchase solar energy off our rooftop at a rate below or equal to the cost of electricity off the grid. This reduces our operating costs, while freeing up more electricity during peak times for use by local homes and businesses."

Blow ye winds
Harvesting electricity from the sun is only one portion of Staples' green initiative, however. The company is also expanding its product line to include a broader array of what it calls "environmentally preferable" products. These include everything from paper with high recycled content to re-manufactured ink cartridges to electronics that have earned the government's Energy Star rating. In addition, Staples has programs that make it easy for its customers to recycle ink jet and toner cartridges, cell phones, PDAs, digital cameras, rechargeable batteries, and some electronic equipment, all free of charge.

"We're really trying to take a very integrated approach to energy management, so we are committed to use less of it," says Buckley, "whether it is kilowatt hours, gas therms, or gallons of fuel. Obviously there is a direct bottom line benefit to doing that, but there is also a corresponding environmental benefit in terms of reducing emissions. We're committed to reducing our impact as it relates to climate change by reducing our carbon footprint, and reducing energy use is certainly the first step. The second step is taking a look to see what we can do to incorporate more green elements into our buildings."

One of those strategies is designing DCs to make optimum use of available daylight, using ambient light for activities like picking wherever possible. When lights are needed, they are controlled by motion sensors and photo sensors that click on when a forklift operator enters a certain aisle. In addition, Staples has retrofitted miles of conveyor lines to reduce energy consumption.

While Staples is looking to the sun for some of its power needs, Buckley sees great promise in wind power as well. Staples has identified distribution sites in Rialto, Calif., and Portland, Ore., for possible construction of 600-kilowatt wind turbines to power the DCs. The company also has a pilot program under way to harness power from the wind through a modular wind turbine system installed at its 220,000-square-foot fulfillment center in Ontario, Calif. The building-integrated installation is a beta test of AeroVironment's Architectural Wind, a new concept in wind energy systems in which the small roof-mounted turbines are actually tied in with the structure's utility grid.

Which type of power does he consider more promising? As much as he likes the idea of wind power, Buckley concedes that there are practical limitations to its use. "Universally, solar has more applications in more places because the sun shines everywhere," he says. "Wind, on the other hand, is very much dependent geographically on where the wind is good."