Walmart: Growing green?

2011-12-07 07:25

Andreas Späth

When the Competition Tribunal gave its blessing to the controversial take-over of Massmart by Walmart, there was great disappointment among local competitors, trade unions and several government departments. Support for the deal came from rather unexpected quarters: environmentalists, some of whom believe that the arrival of Walmart will be beneficial to eco-friendly business practices in South Africa. But how realistic are their expectations?

In 2005, Walmart, the world’s largest retailer with about two million employees, adopted sustainability as a corporate strategy. The environmental goals of the ambitious programme include 100% reliance on renewable energy, zero waste production and a commitment to selling products that “sustain people and the environment”.

To achieve its green targets, Walmart pledged to reduce its greenhouse gas emission, lower energy consumption and cut down on waste by, among other measures, improving the fuel efficiency of its fleet of trucks, sourcing environmentally friendly products and using less packaging. Putting pressure on its suppliers, including some 30 000 factories in China, was to further shrink its overall ecological footprint. 2009 saw the announcement of Walmart’s sustainability index, a rating system assessing the green credentials of all the products on its shelves that would allow shoppers to make more eco-conscious purchasing choices.

While there have been some reports of real improvements in the company’s practices, most official Walmart proclamations – all of them enthusiastically covered by the media – have involved impressive goals rather than actual achievements.

With its overwhelming focus on low prices and it’s gigantic, globe-encircling supply chain, Walmart continues to be a major driver towards low-quality manufactured goods which contribute massively to waste generation because they don’t last and aren’t recyclable. The much-applauded sustainability index has made precious little progress and may need years to become a reality. Energy-saving stores have made up only a small fraction of all the new shops the company has opened since 2005 and as of yet, less than 2% of the electricity for its US operations is supplied by renewable energy sources.

Lee Scott, Walmart’s CEO at the time the sustainability strategy was initiated, acknowledges that doing so was a purely economic decision. The company’s public image was at an all-time low because of its appalling labour relations policies of low wages, minimum employee benefits and union bashing. Scott told the New York Times that improving workers’ conditions would have been too costly and yielded too much ground to employees.

Being seen to go green, whether the company’s sustainability claims were based on real improvements or merely on hyped-up commitments, was a more profitable option to improve matters, and he was right. By 2010, the number of US consumers who were unhappy with Walmart had dropped significantly from a high of 38% in 2005 to 20%.

Walmart’s defining characteristic remains its worldwide growth and it’s in this light that the Massmart take-over has to be seen. Its priority for expansion continues to destroy local businesses at a time when those who are genuinely concerned about long-term sustainability and looming global threats like climate change and peak oil are calling for a resuscitation of resilient community-based economies.

With the cumulative floor space of its US outlets larger than the entire area of Manhattan, Walmart now sells 35% more “stuff” there than in 2005 while during the same period the number of its shops outside of the USA has sky-rocketed from 1587 to over 4500.

Energy efficiency improvements at some of Walmart’s US stores may be saving 1.5 million tons of CO2 annually, but the effect is more than cancelled by new outlets which emit more than 3.5 million tonnes per year. At the current rate it will take 300 years before the company reaches its 100% renewable energy target.

With its commitment to sustainability more hype than reality, far from being a green blessing, Walmart’s entry into the South African market will further grow its already hugely destructive environmental footprint.

- Andreas has a PhD in geochemistry and manages Lobby Books, the independent book shop at Idasa’s Cape Town Democracy Centre. Follow him on Twitter: @Andreas_Spath

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