October 14, 2008

For Wal-Mart, sustainability adds up

By DC Velocity Staff

Wal-Mart has already seen payback from its aggressive sustainability initiatives, said Kelly Abney, vice president of corporate transportation for the company. Conference attendees packed a seminar room to hear Abney discuss the retail giant's sustainability efforts. "It is not just the right thing to do," Abney said, "it has an ROI." H. Lee Scott, Wal-Mart's CEO and president, has set three goals for the company: to move toward using renewable energy for 100 percent of its needs, to create zero waste, and to sell products that are sustainable. Its three-year old sustainability initiative has already paid off in all three areas, Abney said. "We've taken a lot to the bank," he told the audience.

For a company of Wal-Mart's size, even small changes can mean big gains. Consider the fact that the company operates 222 DCs worldwide and makes eight million truckload moves each year. Simply determining a way to bale and recycle plastic packaging from its stores reduced the amount of waste being sent to landfills by 150 million pounds, resulting in $17 million in savings and $13 million in revenue. Similarly, steps to make its private fleet more green has resulted in $23 million in annual fuel savings for Wal-Mart. Some of these efforts include equipping tractors with auxiliary power units in order to eliminate idling, using nitrogen instead of air in truck tires, and using new fuel additives. The company is also testing hybrid over-the-road tractors with partners Peterbilt and Eaton.

Wal-Mart is extending these efforts outward to its suppliers. For example, by reducing the size of packaging in 277 private-label children's toys, Wal-Mart suppliers were able to eliminate 727 container moves, save 5,100 trees, and use 1,300 fewer barrels of oil. Reducing the amount of water in laundry detergent resulted in using 128.9 million fewer pounds of plastic resin for packaging and saved 478 million gallons of water. It also reduced the number of truck moves by 2.79 million and used 20.7 million fewer gallons of diesel fuel.

Abney also described continuing efforts to reduce the carbon footprint of Wal-Mart's facilities and products. He said the company believes that reducing energy use offers an even bigger opportunity for savings than logistics.