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Wal-Mart's Big Problem: Climate Change

When it comes to climate change-the defining environmental issue of of our era -- Wal-Mart is moving in the wrong direction.

As Gwen Ruta of the Environmental Defense Fund, a Wal-Mart partner, writes in her frank assessment of the company's 2009 sustainability report, the problem is that all the good things that Wal-Mart is doing -- increasing its use of renewable energy, driving efficiency in individual stores, improving its fleet operations and pushing up its recycling rate -- are offset by the fact that the company is adding more stores and selling more stuff.

So although WMT's greenhouse gas emissions per unit of sales is decreasing (the bars on the right), its overall carbon footprint is growing (the bars in the middle). Click here for a full-sized version of the chart. Source: Wal-Mart 2009 Global Sustainability Report. Wal-Mart 2009 Global Sustainability Report

Wal-Mart executives have a sophisticated response to this; they've told me that if the company takes market share away from other, less efficient retailers, it could actually be increasing its own emissions while reducing emissions in the aggregate because people are buying less stuff from its competitors. Certainly that's possible.

If the Earth's atmosphere could speak, it would tell us that it doesn't care about efficiency or renewables or recyling -- or market share. It cares about absolute emissions of the greenhouse gases that cause global warming.

The trouble is, Wal-Mart hasn't figured out how to get bigger and smaller at the same time. Bigger: more revenues and profits. Smaller: a reduced environmental footprint.

This a fundamental problem facing not just Wal-Mart, but all of corporate America. Until we solve it, we're in trouble.    

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