Editor's note: I had hoped to actually complete this series last week, but my administrative duties got the best of me. So, here's part two on my trip to Bentonville, Arkansas, for Wal-Mart's media day and shareholders' meeting. You can find part one here.

After finishing up at Sam's Club, our next stop was the Bentonville Supercenter. Like the Sam's Club we visited, the Supercenter was fairly new: it had opened in May, 2005. Like the store we'd just come from, this one also sported ample skylights and bright white walls, and had a definite "upscale" feel. One of the executives who met us on the tour confirmed this was intentional for the particular store… a part of the company's "store of the community" concept.

That idea perked my ears up, of course — wouldn't a "store of the community" be carrying local foods and produce in the grocery section? That question was answered before I got to ask it: yes, a handful of produce items were purchased from local farmers. We also saw plenty of evidence of Wal-Mart's organics push as we walked through other areas of the store's grocery section.

At one stop, I was surprised to hear sustainability brought up: at the back of the store, we were introduced to Wal-Mart's "Site to store" program. Think Wal-Mart meets the long tail: thousands of items only available on the company's web site can be shipped to a Wal-Mart store with no shipping charges for the customer. I expected to hear about how such a program improved customer choice while still offering low prices, but the team from Wal-Mart.com also discussed how the program fits into the company's sustainability goals. Site to store items are shipped on trucks already bound for stores where the customers will pick them up; as such, they don't require the packaging needed if they were shipped by a parcel service. For individual items, of course, this probably doesn't add up to much, but, of course, Wal-Mart works on huge scale: the collective amount of fuel and packaging saved wasn't given, but one can imagine it's sizeable.

In housewares, we got to see a visual representation of the retailer's commitment to selling compact fluorescent light bulbs: there were several rows of shelves carrying the a wide variety of bulbs. An endcap display on one of these rows served to educate consumers about the energy-saving benefits of using CFLs, and also gave them the conversion values for the wattage of CFLs vs. incandescents.

Our tour ran out of time, and our visit to the electronics section was cut short… unfortunately, that meant we didn't get the hear the part of presentation on sustainability and electronics. I'll see what more I can find out on this front.

While our tour guides in other parts of the store didn't necessarily stress sustainability, I saw organic cotton highlighted on a number of displays in both clothing and home decorating sections. The notion of personal sustainability was also highlighted, particularly with health and wellness items. This concept isn't one that Wal-Mart just stresses to customers: thousands of associates have also committed to "personal sustainability projects" (PSPs) that involve improving their personal health and lightening their environmental footprint.

My question from the last post still remains, and surrounded by literally acres of merchandise, I still wondered about the pairing of consumption and sustainability. It's tempting to point at the retail giant and say "Look at all of this stuff you're selling… can we achieve true sustainability while hawking such a wide variety of goods?" I'm going to keep thinking on that, but, again, I invite your thoughts on the topic.

UPDATE: I found out yesterday that Wal-Mart has completed the roll-out of the Site to Store program to over 3300 stores throughout the US. Now, I can tell you how much fuel and packaging is saved by this program: according to the company's press release, "As a result of transportation and packaging efficiencies, 1,000 gallons of gasoline are saved each week and 20,000 fewer boxes are used each month."

Last Thursday and Friday, I was on the road again. This time, my travels took me to Bentonville, Arkansas… yep, the home of Wal-Mart. The company invited me down for its annual shareholders’ meeting and the media events preceding it. Over the next few days, I’ll devote a few posts to what I saw, and what I thought.

Thursday’s media event was jam-packed with activities, starting with a tour of Bentonville’s Sam’s Club. Opened in September 2006, this store was a far cry from the one I remember going to with my parents years ago: as opposed to looking and feeling like a warehouse (which it basically was), the Bentonville store was bright and inviting.

A big part of that feel comes from some of the eco-friendly elements the company built into the store. For instance, the ceiling is arrayed with 54 skylights, and artificial lighting is equipped with sensor dimmers that adjust to the amount of sunlight coming in. The walls are painted white to enhance the light, and even the flooring was chosen for its light reflection. LED lighting is used in refrigeration units. I couldn’t get an exact figure on the amount of energy the store saves (because it’s so new, I was told), but am guessing it’s significant.

We also got to take a look at recycling efforts in the store. We saw a “super bale,” a compressed package of recyclable materials that is sent to a processing plant for separation and recycling. Wal-Mart and Sam’s Clubs efforts to recycle materials from deliveries to the stores has been so successful that they now sell recycled materials back to their suppliers. Our tour guides made it very clear: the company is interested in “doing well by doing good,” and they presented this as a prime example.

We also saw a display for “Students for Recycling,” a joint effort between Sam’s Club, Aquafina, and Keep America Beautiful. The campaign challenges schools around the country to hold collection drives for PET bottles. Prizes are awarded to the fifty schools that collect the most material, and all of it will be turned into backpacks that will be distributed “to students who are making a difference in their communities.” Last year’s “Recycle the Warmth” effort converted the bottles into fleece jackets that were given to needy children in communities that participated in the drives.

During the tour, I got a chance to spend a few minutes chatting with Doug McMillon, president and CEO of Sam’s Club, about other sustainability initiatives. He told me, for instance, that he’s given his buyers a “25% challenge”: he wants a quarter of the purchases they make from vendors to be products that are, in some way, sustainable. When I asked him how this is tracked, he made it clear that it wasn’t a matter of buyers having to document these purchases on a ready-made check-off list; rather, the company is working with these employees to educate them on what constitutes a sustainable product. Currently, these employees and others are being encouraged to read Paul Hawken’s The Ecology of Commerce, and Daniel C. Esty’s and Andrew S. Winston’s Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage. McMillon made it clear that he wants to educate and empower his employees, rather than dictate sustainability to them. Because Sam’s Club is a source of supplies for so many small businesses, McMillon also noted that there are opportunities available to educate the wider business community on the benefits of “going green.”

When I signed up for the tour, my initial thought was “Ho hum… a tour of Sam’s Club.” I certainly left feeling better about what’s happening with these retail centers. Of course, I couldn’t also help but feel a bit overwhelmed by the rows and rows of merchandise, a feeling that stayed with me at our next stop, the new Bentonville Supercenter. The question that’s always stayed with me as I’ve talked with the folks at Wal-Mart: is it possible to for a company that’s making its billions off of such a wide range of low-priced goods to really work towards sustainability? While I’m impressed by the company’s efforts, I’m not going to try to answer that question now; rather, I’ll have more thoughts on that as I write more about last week’s events. I certainly invite you to share your ideas and opinions, though.

Back in December, the word leaked out that mega-retailer Wal-Mart had issued a "request for proposals" (RFP) on adding solar arrays to selected stores. When I interviewed Andy Ruben, the company's vice-president for sustainability, the company was still quiet about this program.

Today, the cat's officially out of the bag: Wal-Mart announced that it would purchasing solar power from "BP Solar, SunEdison LLC, and PowerLight, a subsidiary of SunPower Corporation, for 22 combined Wal-Mart stores, Sam's Clubs and a distribution center in Hawaii and California."

Keep in mind that this is just a pilot program — the company wants to explore the viability of using solar power in order to meet its long-term goal of being 100% powered by renewable energy. Furthermore, the company won't be buying solar arrays, but will enter into power purchase agreements with these companies: the contractors will install the solar arrays on Wal-Mart stores, and the company will buy the power generated by those arrays. With this model, which is also being used by GM and Whole Foods, the company avoids the massive investment in new equipment. What is unique about Wal-Mart's arrangement with these companies is that the retailer will also take ownership of renewable energy credits created by the power produced.

The company estimates that the solar power installations will provide up to 30% of the energy needed at the store at which its installed. Wal-Mart also claims that this move should result in greenhouse gas emissions savings of 6,500-10,000 metric tons per year.

Those savings are impressive, no doubt, and we hope that Wal-Mart's pilot is successful enough to install solar panels on other stores. The educational value of each of these installations may prove an even bigger benefit, as many Wal-Mart and Sam's Club shoppers will get a closer look at the benefits of solar power each time they shop. No word on whether the company will actively promote the use of solar energy to shoppers at these stores, but let's hope so — there's a great opportunity to spread the word…

Reuters and PR Newswire

On Thursday, we pointed to a BusinessWeek article (via Gristmill) that claimed "A number of organic farmers across the country say that Wal-Mart has backed off of aggressive plans to offer more organic foods." Writer Pallavai Gogoi quoted two organic farmers who said that orders from the giant retailer have dried up; the executive director of the Florida Certified Organic Growers & Consumers group further suggested the Wal-Mart's move into organic foods appeared to misinterpret demand for these items at its stores.

In response to these claims, Karen Burk, a member of Wal-Mart's corporate communications team, assured Gogoi that the company remained committed to selling a wide variety of organic foods, and that its original goals had been miscommunicated; furthermore, the company had met or exceeded the goals for organic foods.

Today, Burk submitted a letter to BusinessWeek's editor claiming that the article created "an erroneous and inaccurate representation of Wal-Mart’s commitment to providing our customers with affordable access to organic products." A representative of the company passed the letter along to Green Options, and we've published it in full below. Wal-Mart's efforts to "green" its products and operations will have an enormous effect on the supply of and demand for more sustainable options in the marketplace, so we believe this conversation about the company's commitments needs to happen through a broad range of media channels.

Karen Burk's letter

April 13, 2007

Dear Editor,

Pallavi Gogoi’s article, posted April 12, 2007, on Businessweek.com, is an erroneous and inaccurate representation of Wal-Mart’s commitment to providing our customers with affordable access to organic products.

We have been selling organic products in our Supercenters and Neighborhood Markets for many years and, due to customer demand, announced plans to double the organic food offerings in those locations in March of 2006. We quickly met that goal and even exceeded it in communities where there is an exceptionally high demand for organic offerings. We continue to see steady customer interest in buying quality organics at great prices.

We realize that the customer base in each of our communities is unique, so we tailor the assortment in each of our stores to meet our customers’ needs. This is part of our long-standing “store of the community” philosophy of matching the mix of merchandise with the customer base and demand in each specific community. At a Bear Stearns investors conference on March 8, 2006, Wal-Mart executive Stephen Quinn announced, “We’re soon going to have over 400 SKUs (stock keeping units) of both fresh and brand name superior organic foods available at the Wal-Mart price.” Today we’re proud to offer significantly more than that company-wide, which is completely in line with our plans. This enables specific locations to customize their assortment of organics to fit the consumers in their community. This simply makes good business sense. We’ve used this same philosophy of tailoring our merchandise mix for each store for various categories for more than 10 years.

As a company that’s always working to provide our customers with the best products at the best value, we determine what we’ll buy based on ongoing assessments of quality, price, customer feedback and other factors. Organic apples are one of the top selling organic produce items at Wal-Mart, along with carrots, citrus, lettuce and packaged salads. Far from “backing off,” sales for Wal-Mart’s organic produce for 2006 were at a growth rate well above the industry average of 13.7 percent, based on data from the Organic Trade Association.

Bottom line, Wal-Mart’s growth in the organics category will continue to be reflective of the demand and we will continue providing our customers with the organic products they desire at low prices.

Sincerely,

Karen Burk
Wal-Mart Corporate Communications

We're interested to hear what you think about the claims made both in the BusinessWeek article, and in Ms. Burk's response.

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.