Green Goods Grab Wal-Mart’s Attention

Companies looking to supply products to Wal-Mart Stores Inc. will get “further ahead faster” if they come up with green ideas, says Fred Bedore, senior director for sustainability at the world’s largest retailer. Wal-Mart announced last year it wants to cut 20 million metric tons of greenhouse gas emissions from its supply

chain by the end of 2015.

The retailer said in October that initiatives to reduce waste and improve the efficiency of its transportation fleet returned $800 million to the business in the last year.

Bedore said the retailer is also trying to reduce its in-store carbon footprint with energy efficient light-emitting diodes, or LEDs. He spoke with Bloomberg New Energy Finance's Climate & Carbon Brief.

Q. What’s the incentive for Wal-Mart’s suppliers to cut greenhouse gases?

A. Large and small suppliers really get sustainability these days. It’s about using sustainability as another lens to look for ways to reduce costs, improve efficiency, generate revenue, build their brand as well as our brand. When you look at this particular project, in many instances it’s a conversation starter. It’s a way to engage with Wal-Mart around something very specific and action oriented and from those conversations spring new ideas, further discussion and ultimately projects we can partner together on. Really it’s a way to get further ahead faster.

Q. How much does Wal-Mart rely on LED technology? A. It’s gotten to the point now where we opened a few stores this year, most recently in Wichita [Kansas] where actually the store lighting itself is all LED lights. When you look at some of the unintended consequences we found out that because the lights were cooler it meant that our freezer cases would run cooler, which means less energy. It’s better for the customer because we’re lowering costs.

Q. Wal-Mart plans to have solar panels installed at more than 75 percent of its stores in California by 2013. What’s the business sense in these investments?

A. Similar to any other project, whether it’s building a store, acquiring new trucks for our private fleet, building new distribution centers, building new information systems, everything has a particular return on investment, a particular hurdle rate that we look to cover and these projects are no different. We have to make sure we look for a return on investment not only for our shareholders but that’s how we continue to drive costs out of the system and inefficiencies out of the system to make sure we’re delivering on that mission to help our customers save money and live better.

Q. Wal-Mart aims to reduce packaging by 5 percent by 2013, compared with 2008 levels, saving an estimated $3.4 billion annually. What have you done so far?

A. Recently one of our buyers started engaging with one of our suppliers around wire ties. That ended up being a project that extended globally. We ended up reducing a billion feet of wire that would have gone to landfill [each year] because we didn’t have it in the packaging anymore. The other benefit that came from that were happier customers because they weren’t frustrated by trying to pull all these wire ties of their products after a kid would unwrap a birthday present or Christmas present. It was better customer engagement, it was lower cost, it was better for sustainability so it won along multiple fronts.