Judging Wal-Mart’s Progress With Sustainability

Wal-Mart is used to coming under attack from a wide range of critics, from labor unions to local businesses. It’s less accustomed, however, to taking fire on the environmental front.

Wal-Mart, after all, has been a champion of sustainability in recent years, with efforts in areas ranging from greenhouse gases to logistics.

So it was a bit surprising this month when a report from the Institute for Local Self-Reliance, a nonprofit group based in Minneapolis, criticized the giant retailer for falling short on its environmental goals.

The author of the report, called “Walmart’s Greenwash,” made a stinging accusation: “Walmart’s sustainability campaign has done more to improve the company’s image than to help the environment.”

The report contends, among other things, that Wal-Mart will require some 300 years to attain its goal of 100% renewable energy, that its energy efficiency and renewable projects aren’t enough to match the scale of its operations, and that it’s made little progress on the plan to develop a Sustainability Index to assess consumer products.

Wal-Mart criticized the group’s report as “inaccurate” and “based on speculation at best.”

This report is a sign of increased scrutiny of environmental impact across the business world, so it’s relevant to all retailers and suppliers in this industry. To some degree this scrutiny is fair, because sustainability has been a big topic for a number of years now.

However, it’s important to balance this examination with the recognition that forward momentum isn’t always in a straight line. Consider how Wal-Mart itself describes its efforts in the company’s most recent Global Responsibility Report:

“The programs and progress highlighted in this report are incremental steps toward the accomplishment of our aspirational goals.”

That’s an important statement, in my opinion, which probably means, “Don’t hold us to the precise targets on each and every goal because more important is the big picture of advancement.” I would mostly concur with that sentiment.

Here’s how former Wal-Mart CEO Lee Scott put it at a conference session I moderated last year: “Sometimes you can overthink things to the point where it paralyzes you,” he said. “We set crazy goals and sought to improve every day. That’s what gave us the power.”

It’s important to measure sustainability results, but to do so in a balanced way that continues to incent more progress. The alternative is to scare companies into taking no risks at all.