Stanford Graduate School of Business Case No. OIT71 Wal-Mart's Sustainability Strategy.pdf

CASE: OIT-71
DATE: 04/17/07 (REV. 09/30/08)

WAL-MART’S SUSTAINABILITY STRATEGY

We’e to believe through experience that you really can create environmental progress by
leveraging corporate purchasing power. And who’s got more purchasing power than Wal-Mart?
Gwen Ruta, Director of Corporate Partnerships at Environmental Defense, in a July
2004 article1
INTRODUCTION
In October 2005, in an auditorium filled to capacity in Bentonville, Arkansas, Lee Scott, Wal-
Mart‟s president and CEO, made the first speech in the history of Wal-Mart to be broadcast to
pany‟s million associates (employees) in all of its 6,000-plus stores worldwide and
shared with its 60,000+ suppliers. Scott announced that Wal-Mart was launching a sweeping
business sustainability strategy to dramatically reduce pany‟s impact on the global
environment and thus e “the petitive and pany in the world.” He
argued that, “being a good steward of the environment and being profitable are not mutually
exclusive. They are one and the same.” He mitted Wal-Mart to three aspirational goals:
“To be supplied 100 percent by renewable energy; to create zero waste; and to sell products that
sustain our resources and the environment.”2

In the past, Wal-Mart had dealt with environmental issues defensively, rather than proactively
and as a profit opportunity. In 1989, in response to letters from customers about environmental
concerns, pany launched a campaign to encourage its suppliers to provide
environmentally safe products in recyclable or biodegradable packaging at no additional cost.
As Discount Stores News reported, “What Wal-Mart has chosen to do, apart from reaping a large
public relations windfall, is to deploy its clout with vendors to influence them to spend more on
R&D to develop safer packaging without passing those costs on to Wal-Mart.”3 The
company‟s CEO at the time, David Glass, denied that the program was meant to be self-serving.
“I woul