Wal-Mart to Suppliers: Green Up

In a landmark initiative with far-reaching potential, Wal-Mart Stores announced yesterday that it wants to improve the energy efficiency from the vast network of suppliers that fill the shelves of the world's largest retailer. As competitors have seen before, what Wal-Mart demands (typically, lower prices) Wal-Mart gets. So this move has the potential to reduce energy use around the world.

Working with the non-profit Carbon Disclosure Project, Wal-Mart will first measure the amount of energy used to create products throughout its supply chain, from procurement to manufacturing and distribution. Then, working with the suppliers of DVDs, toothpaste, soap, milk, beer, vacuum cleaners and soda, Wal-Mart plans to find innovative ways to save energy, before extending those successful programs to other suppliers.

“This is an important first step toward reaching our goal of removing non-renewable energy from the products Wal-Mart sells,” John Fleming, executive vice president and chief merchandising officer of Wal-Mart Stores Division, said in a statement made available to the press. “This is an opportunity to spur innovation and efficiency throughout our supply chain that will not only help protect the environment but save people money at the same time.”

Paul Dickinson, chief executive of The Carbon Disclosure Project, which is meeting this week in New York as part of the Clinton Global Initiative, called it a "significant milestone in corporate action to mitigate climate change." Wal-Mart has been making waves in the green world for several years now. Its initiative to improve energy efficiency at its stores and in its transportation fleet, and to reduce packaging on many products has not only saved energy and resources, but money. By some estimates, Wal-Mart could save $3.4 billion just on reduced packaging.

Wal-Mart -- a vilified figure in the environmental community for years because of its destructive power over once-thriving downtowns in small towns, and because of its contribution to sprawl -- is now using its tremendous muscle in the market to spur green innovation. It also shows that businesses can make money by going green -- a key message that many industries are increasingly hearing loud and clear. Sometimes, because Wal-Mart tells them to.

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