As sustainability in the food industry continues to advance, Walmart is among the major grocery retail players making significant progress and having an impact. Walmart CEO Doug McMillion recently had an interview with Harvard Business Review to discuss their sustainability initiatives and it’s importance to the brand.
Why is sustainability important to the corporate giant? McMillon shared in the interview that there were many skeptics at the company’s executive level who weren’t on board with the proposed sustainability initiatives until they realized the firm’s P&L wasn’t suffering — and in many instances, the changes were actually saving money. Walmart not only wants to meet consumer expectations regarding environmental responsibility but also control costs. “We have found sustainability makes good business sense,” McMillon notes in the interview. “We quickly came to realize people want to feel good about the products they purchase.”
Sustainability in the food industry
The sustainability initiatives at Walmart were spurred in a big way circa 2005 when the industry giant responded to Hurricane Katrina by turning more attention to creating greener operations across its 11,600 stores in 28 countries.
“As that happened, a sense of pride emerged and we saw how our size and scale … could be used for good,” McMillon reports. “What if we could be that kind of company all the time? That set us on a new course. A core group of Walmart leaders got really excited about what we were learning and what we could do. “
Since then, the chain has established goals of powering itself entirely via renewable energy, creating zero waste, reducing greenhouse emissions by a billion tons by 2030 and maintaining a product line that largely sustains people and the environment. The corporation has also joined The Future Economy Project, an initiative founded by Harvard Business Review last spring that’s asking companies across industries to set corporate standards for better sustainability.
Already, results have been profound.
“We have found sustainability makes good business sense,” states McMillon. “Walmart has been able to incorporate technologies and developments within our supply chain — from energy efficiency to reducing food waste — that not only have reduced our environmental impact, but also have saved us money as a company.”
Integrate sustainability into business
Since realizing it can be a major force for positive change in the world and still make money, the chain has vowed to integrate sustainability into every facet of the business — not treat it as a separate effort. “We started listening to our critics rather than being defensive,” McMillon notes. “We talked to lots of environmental leaders who were often pretty direct about what areas needed improvement.”
He says feedback from customers has been hugely positive, and Walmart has high hopes of seeing even greater returns as sustainability is incorporated through multiple facets of the company.
“A constant theme for us in engaging our associates and stakeholders has been shared value — the need to integrate sustainability into business, not treat it as a separate effort, and to ensure we deliver business value as well as value for the environment and society,” he explains.
Industry-wide changes on horizon
From a legislative standpoint, Walmart plans to “cooperatively and constructively” work with local, state, federal and international NGOs as well as the public sector in seeking more environmentally sound regulations. It’s already created and distributed a manual of sustainability guidelines as part of its efforts to persuade suppliers, customers, associates and other stakeholders to help it reduce supply chain greenhouse emissions.
“Renewable energy and efficiency investments both in our own operations and with suppliers have enabled us to support jobs, reduce impact on the environment and save money,” McMillon reports. “Walmart is sharing the business case for why suppliers should pursue reducing emissions — increasing competitive advantage, spurring technological innovation, inspiring brand loyalty and increasing employee engagement.”
It’s even joined forces with competitors to create solutions to shared issues. “We quickly discovered we can’t create a solution on our own,” notes McMillon. “Driving meaningful change requires collaboration, from convening environmental NGO partners to working with suppliers on creating more-efficient supply chains to even joining forces with competitors to create solutions to shared problems. To make a true systems change, we all must work together to identify the roots of major problems.”
The world watches with interest to see further outcomes of the major grocer’s sustainability efforts and overall new direction.