Andy Ruben is the Vice President for Corporate Strategy and Sustainability for Wal-Mart. Green Options’ Senior Editor Jeff McIntire-Strasburg spoke to Mr. Ruben on January 16, 2007 by phone. The company was preparing for the opening of its first High-Efficiency (HE. 1) store prototype in Kansas City, MO.

Green Options: The new high-efficiency store opens in on Friday. What can you tell me about the store, and how it’s different from those in McKinney, Texas and Aurora, Colorado?

Andy Ruben: Though we never set out with the goal to build experimental stores, the McKinney and Aurora locations gave us room to try a wide range of high-efficiency techniques. In Kansas City, the new HE. 1 store takes the successful elements from McKinney and Aurora stores, and rolls them into a working prototype.

GO: And how well will that work? In other words, what kinds of efficiency levels do you expect to attain?

AR: We expect the Kansas City store to be 20% higher in efficiency than our other prototypes being built today. It’s a step towards a larger goal of a prototype store that achieves 25-30%, which we expect to create by 2009. We’re going to achieve that by focusing on three major energy-consuming systems: refrigeration, heating and air conditioning, and lighting. Each of these represents roughly one-third of the total store efficiency goals. Additionally, we’re incorporating things like white roofs, daylight harvesting systems, light-emitting diode [LED] signage – all technologies that we’re currently putting into all of the new Wal-Marts, Sam’s Clubs and Neighborhood Markets.

We’re also taking advantage of technologies that allow us to harvest waste heat from one element of the store, and use it in another. For instance, the Kansas City store is at optimal efficiency during the winter because 100% of the heat generated by the refrigeration systems is reclaimed by a pump and boiler package that uses water to move heat into the store space. Additional waste heat will be used to heat water for public restrooms and kitchens.

GO: This all sounds a lot like William McDonough and Michael Braungart’s “cradle to cradle” concept.

AR: McDonough and Braungart’s ideas are our guiding principles in designing these systems. We’ve worked with McDonough, and continue to work with one of his “disciples.” We’re looking at everything from products to store design in terms of “cradle to cradle” thinking. It gives us a chance to look at the built world, and to figure out what we can do right now. That’s particularly exciting for me, because it gives me the opportunity to look at different parts of the business, and try to figure out how we can implement practices that align with these principles.

For instance, we built the first commercial building in the US that integrates a closed-loop CO2 system. One of our competitors came to take a look, and proceeded to build the second such building. We’re now in the process of building the third. I’m coming to realize that the indirect opportunities for change may outweigh the direct one.

GO: How is all of this working out with your suppliers? Wal-Mart’s known for keeping a pretty tight reign…

AR: Across the board, it’s working well. But let me address that perception first, because our relationship with our suppliers isn’t exactly like that. We’re a customer of our suppliers. We don’t get to go in and say “We’d like you to do X.” And that’s for the best: our suppliers know much more about their business then we do.

As far as our sustainability goals, we’re willing to let our suppliers grow into these roles. Sustainability is a personal journey in which people need to see themselves first. We’ll encourage our suppliers to look at transportation costs, packaging, and environmental savings. We’ll show them the positive wins we’ve created by addressing these issues. And then we hope that they’ll use their talent and expertise to innovate.

We can’t go in and dictate solutions, though. We expect our suppliers to work through their own sustainability journeys, and to create open-ended solutions that work for both companies.

It is working for them, though. Dana Undies, for instance, claims it has realized 50-70% energy savings by implementing practices that we’ve put into place.

GO: One solution that Wal-Mart is considering is solar power: news leaked out in December that the company had issued a request for proposals (RFP) on solar systems for some stores in five states. How does renewable energy in general figure into the company’s sustainability plans?

AR: Our long-term goal is to be powered 100% by renewable energy, and solar power is certainly part of that goal. We wanted to set such long-term goals to align the whole company around thinking big and new for all areas of the company. It’s certainly important to have near-term goals, also, and the RFP plays into that. I can’t really say much more, though, as that request is still very much in process.

GO: Where is the company in terms of the long-term goal?

AR: Currently, renewably-produced energy accounts for only a small percentage of the power we use. At this point, it doesn’t make sense to simply add more renewable power, and ask our customers to pay more for that added value. So, we’re focused on the long-term value of renewable energy. We believe that we’ll create more value if we work to change the way people think about these things.

The RFP is one way to do that. We believe that the competition it creates is a good thing, and that the overall market will benefit.

GO: Let’s move on to some of the criticism of Wal-Mart’s sustainability plans – it’s certainly out there! One of the major issues I hear is that you’re not really in this because of environmental concerns; rather, you see sustainability simply as a way to save money. How do you respond to that kind of criticism.

AR: That’s not where we focus. We understand where that criticism comes from, but we ask our critics not to focus on motivation, but on results. Measure us by our actions. We’ve set goals, and we know we can get a lot better. Setting those goals means people show up to work every day thinking “What can we do better?” We then focus on solutions: on organic cotton clothing, on bamboo, on Fair Trade coffee.

That doesn’t mean that we don’t hear the criticism. It can be helpful, and we learn from it. We can’t get enough feedback from our critics. At the same time, we know that some critics will never be satisfied with our efforts. Criticism comes in varying levels of intensity: we focus on feedback that helps us become a better company.

GO: One near-term goal the company announced was doubling its offerings of organic food? Where are you on that?

AR: Actually, I can’t verify that we said we’d double our offerings. What I can say is that we’re responding to customer demand. We view organics as a preference that allows customers to make better choices for themselves.

GO: How do you respond to criticism that Wal-Mart will end up “watering down” organics, or at least the meaning of the word?

AR: We understand the concern, and are taking a hard look at how things are produced… including where they come from.

I had the opportunity to take part in an event called the “Earth-to-Earth Summit,” which was run by [executive vice president of merchandising] Claire Watts. In this meeting, we brought together people that had never sat in the same room together: people who represented the life cycle of our food products along every step of the way. We get a lot of value out of sessions like that.

One of our biggest wins in this area involves tomatoes. There are a lot of local tomato growers who produce fruit that might look strange to many shoppers – it has a different shape, for instance. After meetings like the Earth-to-Earth summit, we started thinking about food miles, and the heavy footprint they create. We started to wonder why we don’t have greater options for buying produce, including the local option: buying from farmers that live and work near a particular store. So we’ve gone back aggressively to those local tomato growers, and started working with them to create a more marketable product.

There’s no downside to these kinds of developments: we get fresher produce, and local farmers and communities benefit economically.

We’ve also started thinking about alternative locations for growing products. Cilantro, for instance, has traditionally been grown on the West Coast, but the climate in Florida is ideal for it. We’ve worked with Florida farmers to start growing the crop, and now source all of the cilantro for our Eastern Seaboard stores from them. That allows for a significant reduction of food miles on that one product.

GO: It sounds like the company has adopted a “learning organization” approach?

AR: Exactly! We want to find out what lenses work for getting people to see things differently. That’s a learning process, and one that we’re engaged in.