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KAI RYSSDAL: We asked but nobody at Wal-Mart would elaborate on what Lee Scott said — that bit about hydrogen fuel networks and sustainable cars. But really, Wal-Mart doesn’t have to make cars or anything else that’s green to have an impact. All it has to do is put the order in, and its 60,000 suppliers will do the rest. Marketplace’s Sarah Gardner caught up with some of them in Bentonville last month, at a conference Wal-Mart called to talk sustainability.
SARAH GARDNER: At a hotel near Wal-Mart’s Arkansas headquarters, CEO Lee Scott has just laid down a daunting challenge to hundreds of his company’s biggest suppliers. He wants innovative, eco-friendly products that will, quote, “drive sales.”
And he’s brought in an army of earnest environmentalists. They stand behind booths, ready to guide vendors along this green path.
COTTON LADY: Do you want to know about cotton? … Do you want to know how cotton’s grown?”
Organic cotton, fair trade, carbon-footprint calculators. It’s a strange new world for many Wal-Mart suppliers. But when a retail superpower like Wal-Mart “asks” vendors to do something, it’s rarely a question. However sweetly Lee Scott poses it.
LEE SCOTT: It’s not a hammer. It’s not a threat. Over the long term, the people who don’t participate, I think will find that they probably do end up with less shelf space.
CEOs like Jim Chambers don’t want that. He heads Cadbury Schweppes’ gum and candy business in North America. He says even something as seemingly trivial as the packaging around a piece of gum can chew up resources.
JIM CHAMBERS: We could cut the tolerances a little bit closer so now it’s in 15 percent less packaging. We see that as a win-win.
Other suppliers are biting into bigger changes. Take Kimberly Clark. The company’s been villified by Greenpeace for using trees from ancient forests and too much virgin paper to make tissues and toilet paper. Not much changed, until Wal-Mart approached the company.
That’s the sound of production at a Kimberly Clark factory that Greenpeace blockaded just 19 months ago. The Canadian plant is now churning out “Kleenex Naturals” made with 20 percent recycled fiber. It’s one of three such products Kimberly Clark is trying out at Wal-Mart’s prodding.
GIL FRIEND: This has really focused CEO’s attention.
Gil Friend heads up the eco-consulting firm Natural Logic based in Berkeley, California. He contends Wal-Mart’s initiatives have packed more punch than any government regulation.
FRIEND: This is not just how do we comply with the law at the least possible cost. This is how do we keep shelf space in the biggest retailer in the world. That has a way of focusing the mind.
But David Nassar, executive director of Wal-Mart Watch, says before leaning on its suppliers Wal-Mart and CEO Lee Scott need to take some of their own medicine.
DAVID NASSAR: If Wal-Mart is truly serious about sustainability, then they need to accept some of the costs themselves. And so far he’s already rejected the idea of moving production, some production, any production to the United States, which would help to curb greenhouse gas emissions because there’d be less distribution involved in the products.
Environmental guru Paul Hawken understands the critique. Still, he believes Wal-Mart’s sustainability campaign is huge.
PAUL HAWKEN: It is a big deal.
Hawken says it’s not just energy efficient stores and less packaging. Just listen to what Lee Scott told Marketplace:
SCOTT: We can put a vehicle on the street that is the best solution to sustainability.
To Hawken, that suggests a tantalizing future for clean vehicles.
HAWKEN: What Wal-Mart’s in a position to do is that they can properly position and create a vehicle that’s affordable. And this is where they’re going. And I think it is revolutionary.
Hawken says Wal-Mart could get in the business of selling, financing and fueling a zero-emissions vehicle. But Hawken believes Wal-Mart’s eco-initiative is even more fundamental than cars. He sees Wal-Mart raising the environmental consciousness of working-class America.
Whether Wal-Mart will fully embrace the role of environmental champion, though, may ultimately depend on how it affects the company’s bottom line. Shareholders care most whether Wal-Mart’s in black, not the green.
In Rogers, Arkansas, I’m Sarah Gardner for Marketplace.
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