2Sustain

Below is an excerpt from a speech by Wal Mart CEO Lee Scott at a recent conference for Wal Mart suppliers. In case you missed it have a look below – very interesting comments, particularly in the context of our discussion here on the meaning of sustainability.

In my opinion Wal Mart is well on their way to achieving something that most companies have found somewhat elusive to date: not only talking the talk, but walking the walk. While it remains to be seen if Wal Mart can execute on their lofty goals around reduced energy usage, less wasteful packaging, reduced toxicity, energy efficient stores, etc, I would say they are off to an admirable start. They are even doing things like working with Act Now (Adam Werbach’s sustainability consulting firm) to educate the 1.3 million Wal Mart employees on what they can do to improve sustainability in their own lives.

From
my perspective, the key to Wal Mart’s current and future success lies their
clear understanding that sustainability makes good business sense. Sustainability
is not a fad and this is not about marketing…this is about product life-cycle
costs, transportation expense, fuel efficiency, the sustainability of
competitive advantage, etc. In today’s retail world (and surely more so in
tomorrow’s) differentiation no longer means cleaner bathrooms in stores or
coffee huts in the parking lot – it means environmental, labor and social sustainability
up and down the supply chain, and all the way out to employees and stores. Or
as Lee Scott says:

Sustainability
is here to stay. It is not a fad; it is not a marketing ploy. . . . It is in
fact a part of what all of us are going to be doing with our businesses from
here on out. It is not about higher margins and higher prices. It is about the
elimination of waste. It is about making our businesses more effective. It is
about transferring those benefits on to the consumer. And it is about taking
chemicals and things we know aren’t good for the environment and finding
alternatives to those chemicals so we make products safer.

I
think for Wal-Mart one of the key roles for sustainability is it is going to
cause us to have better products. Because we’re going to be thinking about the
quality in those products: what is the defective rate . . . what are the
life-cycle costs of that product . . . . Ultimately my view is that because of
sustainability, we also will be dealing with the best companies. Let me talk
about sourcing from someone who is willing to compromise on the
environment—maybe destroy waste in an inappropriate way, or use chemicals that
they shouldn’t. What in the world would make Wal-Mart think that the person who
is willing to compromise the environment, knowingly, wouldn’t also be willing
to compromise on quality to meet a price point? . . .

My belief is that we’re going to find that sustainability and all of these social
context issues are all related and all end up showing up in the quality of the
products. And that as we use sustainability as a driving force, we will have
better suppliers . . . and it will enhance the reputation that we have as a
company.

We have simply started. We make no claims of being a green company. We’re not saying
we’re better than anyone, we’re not saying we’re doing it right. What we’re
saying is that we recognize an opportunity to make a difference in this world,
make a difference for our customers, for our shareholders, for our associates,
and it is worthwhile to do."

For the full context of the speech see Joel Makower’s blog