The way Pepsi and Wal-Mart tell it, sustainability is more than just saving the planet. It’s about making money while you do it.
“It’s very hard to do good things if you’re not profitable,” Pepsi sustainability executive Tim Carey told a DU audience Feb. 27. “The pressure to stop anything that is not going to make you money is enormous.”
Same thing at Wal-Mart, sustainability spokeswoman Janelle Kearsley said. “We wouldn’t be doing any of this if it didn’t make sense for business.”
The good news, the two agreed, is that sustainability really is good for business.
Wal-Mart learned that when a consultant’s report suggested the company seize a “leadership and competitive advantage” by integrating sustainability into what they were already doing.
So, the company experimented, literally diving into their dumpsters, where they discovered that 70 percent of the stuff they were throwing away had recyclable value.
Or putting auxiliary power units onto the 7,000 trucks in their delivery fleet so engines wouldn’t have to run as long. “It saved us $25 million per year in diesel fuel,” Kearsley said.
Recycling plastic bags gained the company $3 million. Buying a Turkish organic cotton field opened the door to greater use of alternative fibers. And a pledge to buy certified seafood and forest products ensures that suppliers don’t run out of product for Wal-Mart customers.
The company also tried building sustainable stores, Kearsley said, where they could learn the best ways to harness solar and wind power and effectively use variable lighting and heating. One of these stores is in Aurora, Colo.
The result was an explosion of ideas on how to bring down costs by embracing “green” principles: using renewable power sources, reducing waste and encouraging customers to choose sustainable products.
The movement had an impact beyond Wal-Mart, which Pepsi’s Carey saw firsthand.
“When I go into a business meeting and I tell them we’ve got to do something because Wal-Mart expects it, the response is phenomenal,” he said. “All of a sudden I’m the most important person in the room.”
Not only did Pepsi change its behavior based on Wal-Mart’s expectations, but the global food and beverage company began setting sustainability benchmarks for itself to achieve its own social, environmental and humanitarian goals.
“Every time we make a decision, sustainability is part of the equation,” Carey said. “If it doesn’t [clear our benchmark], we won’t do it.”
The company now has aggressive targets for reducing water, electricity and fuel consumption and reducing the greenhouse gases they produce. “It’s what I call net neutral impact,” Carey said.
The Pepsi-Wal-Mart sustainability presentation was sponsored by Net Impact, an international nonprofit group working to encourage new leaders to use business as a means to improve the world.