Lately, Wal-Mart looks schizophrenic. On the one hand, it has established a powerful position as the employer of last resort in many communities, and, despite its vigorous protests otherwise, has little regard for workers. It subjects them to surveillance, engages in union-blocking that many claim is on the wrong side of the law (the law is so toothless here that violations take a long time to prove and carry little in the way of damages), has been found guilty of forcing employees to work without pay, and now faces the largest discrimination lawsuit on record. On the other, while it won’t change its labor practices, it is eager to burnish its image by being a good corporate citizen on other fronts. Thus Wal-Mart has embarked on a whole raft of socially responsible initiatives, from promoting diversity at suppliers to supporting sustainable fisheries.
The company seems to believe that if it spends enough money on good deeds, its sins will be forgiven. I’d hazard a guess that there are enough unhappy ex-employees that that will never happen, but Wal-Mart should at least be able to bring its reputation up from negative to mixed.
But before one gives the the devil his due, let’s consider a third possibility: Wal-Mart is getting smarter about finding, then calling attention to, programs that are cost-effective and make for good photo ops. Witness Gordon Smith at Conglomerate’s take on Wal-Mart’s pilot program for installing solar panels in stores:
Today comes news of a plan to outfit 22 Wal-Mart stores in California and Hawaii with solar panels. (W$J) The panels will provide up to 30% of the energy for the stores. This is a pilot project designed to test the viability of solar energy in other Wal-Mart locations. And it is supported by tax incentives:
California and Hawaii have other appeals for solar panels beside abundant sunshine. Solar power typically costs more than conventional forms of energy based on fossil fuels, but those two states provide generous rebates because they are trying to get 20% of their energy from renewable resources by 2020.
Wal-Mart, Bentonville, Ark., declined to quantify its anticipated savings from the pilot program other than to say they will register “as soon as the first day of operation.” What’s more, Wal-Mart, not its solar providers, will retain the renewable-energy credits generated by the program. The credits recognize the value of producing energy from renewable resources like solar power that don’t create greenhouse-gas emissions such as carbon dioxide. They could be valuable if the Democratic-controlled Congress introduces emission caps and such credits can be traded.
There are big subsidies for solar installations in some states, and these programs can cut the effective cost of a project by half. In the case of the 22 stores, Wal-Mart is buying the output of the solar panels sitting on its rooftops. But the vendors — BP PLC subsidiary BP Solar, SunEdison LLC and SunPower Corp. subsidiary PowerLight — said they are receiving a federal tax credit amounting to 30% of each installation’s cost, plus ratepayer-funded rebates paid by utilities and other incentives. After all the subsidies, electricity produced by solar panels can end up cheaper than that from conventional sources.
As Conglomerate readers know, I am not inclined to bash Wal-Mart, so don’t take it as a criticism of the company when I say that this is not “corporate social responsibility.” This is good business. Cost savings + positive public relations = no brainer.
That said, Al Gore’s feel-good notion that “there need not be any conflict between the environment and the economy” is dangerous because it leads many people to assume that clean air and clean water are costless. The obvious implication of Gore’s reasoning is that corporate directors and officers are evil incarnate or wildly incompetent. How else could one understand environmental degradation in a world where the environment and the economy are not in conflict? In the case of Wal-Mart’s new solar panels, the costs of moving away from fossil fuels will be borne, in part, by taxpayers. There is no free lunch.
With all due respect to Smith, there is more validity to Gore’s view than he admits, although I agree completely that implying that there is no conflict is dangerously misleading. First, most studies have found that the biggest reductions in carbon emissions will come from conservation, not new energy technologies (although we need to do so much to reduce greenhouse gas emissions that we need to pursue various strategies in parallel). One of the big issues with corporations is resistance. They can’t stand to be told what to do, even if they might actually save money in the end. For example, when McDonald’s finally caved to pressure in the UK to adopt more eco-friendly packaging, it found that the substitute was as effective and cheaper. Similarly, BP set a target in 1997 to reduce its carbon emissions to its 1990 levels by 2010. Not only did so in three rather than 13 years, but the cost of $20 million produced savings of $650 million. Find enough cases like that and Gore may be right after all.
The simple point is there is a tremendous amount of energy waste, such as standby power. You may not know it, but when your PC or TV is plugged in, even when it it turned off it is pulling a low level of power. Switching off appliances from the wall (or if you are in the US, unplugging them) would reduce energy consumption by 10% in most households. Companies and households need to go after no-brainer and low-cost energy savings before they start caviling about sacrifice. And per the McDonalds and BP examples, they might actually come out ahead.
Back to Wal-Mart. The more big profit minded companies take steps like this one, the fewer excuses the eco-Luddites will have. But one wishes there were ways to make unglamorous and more immediate measures like reducing the use of standby power sexier.
From the Financial Times:
Wal-Mart, the largest US retailer, on Monday announced what it called “a pilot” solar power project that will mark on completion one of the largest US solar energy initiatives.
The retailer said it will have solar power arrays installed on 22 of its stores and warehouses in Hawaii and California that will generate up to 20 million kWh a year “as part of a pilot project to determine solar power viability for Wal-Mart”…..
The retailer says the solar power systems will provide up to 30 per cent of the power for each store, and that it will use the resuilts “to determine how to move forward with solar power generation at additional..stores”.
Similar but smaller projects have been implemented by retailers including Staples, Target, and Whole Foods, while Tesco, the UK retailer, has announced it will install a 2MW solar array on its new distribution centre in California….
