Eco-Advantage Blog

February 2, 2007 | Andrew Winston | Jump to: Comments (0) | Post A Comment

Wal-Mart Saves the World. Really.

Today the Intergovernmental Panel on Climate Change (IPCC), the most thorough and non-partisan study out there, releases its latest omnibus on the science of climate change. I can’t say I’ve read the 1,700 some-odd pages, but I’m guessing that it’s a “who-done-it” and the answer is us. The New York Times reports that the scientists are 90% sure humans are responsible for climate change since 1950. The Wall Street Journal is saying that it also predicts larger temperature increases — wonderful. But as a colleague said to me, “I can’t believe we’re even still bothering to put a number on it.” What he means is that, by and large, the world’s governments (even the U.S., sort of) are on board. And, more importantly in my mind, many of the world’s largest companies are off and running already.

Today’s Wall Street Journal has a big case in point. As the Journal put it, “Wal-Mart Wants Suppliers, Workers to Join Green Effort.” This story is potentially one of the most important in the history of green business — and it’s fairly buried. Wal-Mart is asking employees to make commitments to reduce energy use (biking to work, and so on). This is great and sets a tone, but the real action is the other way up the value chain. The company is more formally asking suppliers to “decrease their use of nonrenewable energy such as that generated by burning coal or gas.” Bravo. Thinking about the full value chain impact of your business is a critical component of a good climate strategy (more on this in my next post). If you believe that climate change is one of the top priorities for humanity, then the world’s biggest company using its leverage on the issue is not a small story.

Let’s imagine what Wal-Mart’s impact might be. Right now, the giant represents something like 2-3% of U.S. GDP (isn’t that wild?). So how much of global GDP do you think the company’s 60,000 suppliers represent? I’m not sure, but it has to be big. The impact of this “request” from everyone’s biggest customer could be seismic — much bigger than any scientific report. But the request needs to be backed up with metrics and actual changes in purchasing behavior (will Wal-Mart shift business to suppliers that use more renewable energy?).

If done right, this quintessential example of “greening the supply chain” could shift energy use patterns permanently. As Lee Scott put it, “Just think about this: What if we worked with our suppliers to take nonrenewable energy off our shelves and out of the lives of our customers?” A worthy goal.

Andrew

 

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