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The evolution of Wal-Mart’s CFL program
The Times took a deeper look recently at Wal-Mart’s lightbulb push, providing a fascinating glimpse of just what it means when the world’s largest retailer applies its heft to an environmental issue.
Before getting into the particulars, though, a digression. Wal-Mart provokes a passionate response in a lot of our readers, and some wonder why we write about the company at all, particularly in what could be perceived as a positive light. The answer is simple: what Wal-Mart does matters. A lot. The company practically defines the mainstream. Wal-mart’s size and reach give its actions a weight that few other organizations, public or private, can match.
We aren’t the only environmental group to have noticed this. Grist named Wal-Mart as the #2 green story of 2006.
Just today I was talking to a TerraPass member who works for a major consumer goods company. This person mentioned that Wal-Mart is readying a sustainability survey that it plans to administer to all 60,000 of its suppliers. The survey will reportedly grade suppliers on a variety of metrics, including whether they use clean power and recycled content to produce their products. A good score on the survey can lead to improved shelf space. A bad score could result in a product getting dropped altogether. This is all part of Wal-Mart’s announced plan to have zero-waste stores.
Again, it’s hard to overstate the potential impact of this sort of thing. As this TerraPass customer said, “Virtually every business in America has to deal with Wal-Mart.” The company is telling suppliers that they have to green their businesses or else potentially lose access to their most important retail channel. You can bet that suppliers are going to listen.
That’s why we write about this. Love Wal-Mart or hate it, this is a big story.
OK, back to the article. The strong arm tactics may sound familiar. What’s new is the end to which they’re being put:
Wal-Mart publicly embraced the bulbs with the zealotry of a convert. In meetings with suppliers, buyers for the chain laid out their plans: lower prices, expanding the shelf space dedicated to them and heavily promoting the technology.
Light-bulb manufacturers, who sell millions of incandescent lights at Wal-Mart, immediately expressed reservations. In a December 2005 meeting with executives from General Electric, Wal-Mart’s largest bulb supplier, â€œthe message from G.E. was, â€˜Don’t go too fast. We have all these plants that produce traditional bulbs,’ ” said one person involved with the issue, who spoke on condition of anonymity because of an agreement not to speak publicly about the negotiations.
The response from the Wal-Mart buyer was blunt, this person said. â€œWe are going there,” the buyer said. â€œYou decide if you are coming with us.”
In the end, as Wal-Mart suppliers generally do, the bulb makers decided to come with the company.
Yes, the company being bullied in this case is GE. Now that’s market power.
But, as the article notes, Wal-Mart’s success in the endeavor is not assured. The one party that can’t be bullied, even by the world’s largest retailer, is the one that matters most of all: the consumer. CFLs have been around since the ’70s, and they’ve simply never gained widespread acceptance. We’ll be watching closely to see if 2007 is their year.