Wal-Mart Goes Green, Makes Green

This post first appeared on Minyanville.

For card-carrying environmentalists, going green and avoiding corporate mega-brands go hand-in-hand. But as big companies embrace earth-friendly products and practices, many eco-activists may be forced to tone down their anti-business rhetoric.

This weekend’s New York Times highlights how Wal-Mart (WMT), the world’s biggest retailer (and affectionately nicknamed "Evil Destroyer of Communities" by some) has used its clout to push many of its competitors, suppliers and fellow corporate titans towards green-friendly business.

In 2005, Wal-Mart executives met with leading environmentalists to devise a scheme aimed at rejuvenating the firm’s flagging bottom line by going green. CEO H. Lee Scott Jr. challenged his colleagues to change the way they did business, turn public opinion back in favor of the retailing giant, and remake Wal-Mart’s tarnished image.

In his own words, Scott said “It wasn’t a matter of telling our story better, we had to create a better story.”

Despite record earnings, Wal-Mart had an abysmal record on environmental, labor and health-care issues. To be sure, keeping track of almost 2 million employees is no easy task, but by most accounts the Arkansas-based company treated its workers with remarkable disdain.

As public-relations risk increased and labor groups’ assault on the company intensified, Wal-Mart’s stock price lagged. Sales slipped as rivals like Kmart and Target (TGT) captured some of the megalith's business from more well-to-do clientele.

After coming to the startling realization that image mattered -- that the company needed to change its practices rather than work at silencing critics -- Scott sought to remake the firm at which he worked for more than 20 years before becoming its CEO. Sustainability, he felt, would be the key to the company’s resurgence.

Suppliers had little choice but to follow suit.

General Electric (GE), for example, though loath to sell longer lasting light bulbs (which need to be replaced less often), ramped up production of fluorescent bulbs in response to Scott's demands. Wal-Mart's drive to sell only concentrated liquid laundry detergent saves hundreds of millions of gallons of water, not to mention fuel, plastic and cardboard. Proctor & Gamble (PG), which makes Tide laundry detergent, couldn’t help but cooperate - lest it lose an extremely valuable customer.

Environmental movements are notoriously grassroots movements: What they lack in clout they make up for in vigor. And as going green has become almost sickeningly trendy, corporations have strove to adopt more sustainable business practices.

Large corporations are remarkably powerful in their ability to effect change - both positive and negative. And increasingly, firms are embracing efficient, environmentally friendly ways of doing business.

In 2007 Google (GOOG) built the largest ever solar installation on a corporate campus. Safeway (SWY), one of the biggest grocery-store chains in the country, unveiled 2 new eco-friendly stores on Earth Day 2008.

It's not often that corporate CEOs and environmental activists see eye-to-eye, but on the subject of saving money by going green, they couldn't agree more.