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October 4, 2006 | Andrew Winston | Jump to: Comments (0) | Post A Comment

Wal-Mart, Part I - Social vs. Environmental

I went to a small gathering last night hosted by E2 (Environmental Entrepreneurs), a group of environmentally-interested business people associated with the NRDC. The speaker was Tyler Elm, Wal-Mart’s Senior Director for Corporate Strategy (focused on environmental issues), a relatively recent emigrant to Bentonville who previously ran Office Depot’s environmental programs. It was an interesting talk about Wal-Mart’s aggressive environmental goals and plans. Of course given the size of the company and its potential to help destroy or save the planet, Tyler could have read from the Wal-Mart store manual for 30 minutes and it would be worth going.

There was enough to chew over and comment on for many posts, so this will be the first of a few. But to start, there was one big elephant in the room last night—the recent (and recurring) press coverage of Wal-Mart’s problems on the social front (labor, wages, health care, you name it). See NY Times editorial and blog reactions.

A couple of attendees last night decided to bash Tyler for the company’s social lapses. Besides the fact that Tyler works on the environmental front almost exclusively and can’t really answer for what his bosses’ bosses’ bosses decide, the contentious discussion gets at one big issue that guided Green to Gold from early on in our research — environmental and social issues are intertwined, but very different.

Clearly both sets of issues can create, or destroy, value. But it’s almost like different currencies without a good exchange rate. You need to earn and protect both. A company that has problems on the social side cannot wipe them away with top-notch environmental programs, a point we make early in our book about Wal-Mart in particular. Here’s what we say:

Any company that thinks it can cover shortcomings in social performance with strong environmental results is kidding itself. Wal-Mart, for example, has recently started to work on a range of issues from renewable energy to sustainable fishing to its impact on land use. But it shouldn’t expect to win any prizes for corporate responsibility while falling short on basic social issues such as wages, health care, and labor relations (p.22).

I want to amend that paragraph which now reads a bit harsh to me. I stand by the fact that what you do right on one hand doesn’t cancel out what’s wrong on the other. But that truism works both ways. The bad doesn’t negate the good. What Wal-Mart is doing on the environmental front is good — full stop. For example, the company’s push to sell consumers 100 million-plus compact fluorescent bulbs (which will save the equivalent in emissions of taking two million cars off the road) absolutely reduces the burden on the planet. And the company should be recognized for that.

The environmental and business communities need to welcome these actions. It’s not greenwashing to accept solid results as long as you’re honest about what needs improving. We talk in the book about stakeholder relations and how companies must listen to different voices. Well, the stakeholders need to stop talking sometimes, accept victory when it presents itself, and applaud.

 

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