Sustainability and Environment

Andy Ruben
Vice President , Company Strategy/Sustainability
Wal-Mart Stores, Inc.

May 18, 2006

 To be supplied 100% To create zero waste To sell products that
by renewable energy sustain our resources
& environment

• Existing stores 20% • 25% reduction in • 20% supply base

more efficient in 7 solid waste in 3 aligned in 3 years
years years • Preference given to
• New stores 30% • All private brand aligned suppliers in 2
more efficient in 4 packaging improved years
years in 2 years (right • Design and support
• Fleet 25% more sized, reusable Green Company in
efficient in 3 years, materials) China
double in 10 years

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 Today there are 6.3 billion people.
In 2025 there will be 8 billion people.

What will it take to provide for everyone?

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Wal-Mart Stores, Inc.
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 Global Trade
Increasing at an Increasing Rate
$ Trillions of Trade "When a Brazilian brews her
$9.0
CAGR morning coffee today, she is
$8.0 4.8% likely to use electricity from a
$7.0
power plant in Uruguay that
runs on natural gas from
$6.0 Argentina provided by a
$5.0 Chilean company. She drives
CAGR
3.5%
to work in a Ford fueled with
$4.0 Mexican gasoline, and her
$3.0 Canadian-owned factory is
CAGR
3.2% powered by a natural gas
$2.0
pipeline from Bolivia."
$1.0
- Mack MacLarty, Former
$0.0
White House official and
1973 1983 1993 2003 CSIS Senior Advisor
Source: World Trade Organization, 2004
Wal-MartNote:
Stores, all
Inc. data in
2003 dollars Version: 5/24/2006 8:45:37 AM
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 “Of the world’s 100 largest economic entities,
42 are now corporations, not countries”

-CSIS, 2004

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 “We’ve been dealing with jobs, healthcare,
community involvement, product sourcing,
diversity and environment from a defensive
posture…”

“…when in fact they represent gateways

for Wal-Mart in becoming the most
competitive and innovative company in
the world.”
- Lee Scott, 21st Century Leadership, Oct 2005

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 Sustainability at Wal-Mart

• It’s about the customer and creating more

value for ALL customers
- the democratization of sustainability
• It is the business
• It’s about becoming a better company

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 Private
Fleet

FY07 Test
Auxiliary Power
Wal-Mart Stores, Inc.
Units (APUs) Version: 5/24/2006 8:45:37 AM
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 Zero Waste

Sandwich Bale

Kid Connection
Private Brand Toy
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 All Mighty
Retail/CPG Partnership
ANNUAL IMPLIATIONS OF CATEGORY SHIFT

•Gallons of water Saved……………478.1MM

•Gallons of Diesel Saved…………….20.7MM

•Reduced # of Trucks………………..2.79MM

•Plastic Resin Reduction……...128.9MM lbs

•Reduced # of out of Stocks……………..50%

•Reduced in Labor Dollars………...$91.4MM

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 EDLC +
• Awareness of ‘unintended consequences’
• Potential to add more value for customers
• Democratization of sustainability

requires ‘systems’ thinking,

solutions, execution

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 Co2

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 Network Structure

Leadership Suppliers
• Large and small
Wal-Mart Merchants • Multi-level Outside Experts
• Cross category • NGO’s
• Cross markets Sustainable • Government
• Support functions Value • Academics
Networks

Measure and Develop Education

Reward Strategies
- Relevant - Suppliers
Design and Explore - Associates
metrics
Innovation Pilots - Public and policy
- Ability to measure
- e.g., Organic cotton makers

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 / 14 Networks
Initial 13

CLIMATE WASTE PRODUCTS

• Global Greenhouse • Operations and • Apparel
Gas Internal • Electronics
• Energy, Design, Procurement • Food and Ag
construction and • Packaging • Forest and Paper
Maintenance • Chemical Intensive
• Global Logistics • Jewelry
• Alternative Fuels • Seafood
• China
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 Network
Expectations

Game
Changer
(Industry)
Innovation • eg, electricity market
(Supply Chain)
• eg, organic cotton
• fair trade coffee
Low Hanging Fruit • LED lighting

• eg, wax coating of

chicken box
• right sized TV/DVD
combo

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 Packaging Principles
on Retail Link

Remove Packaging

Reduce Packaging

Reuse Packaging

Renew (able) Packaging

Recycle (able) Packaging

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 Sustainability Requires a New ‘Lens’

“Problems cannot be solved at

the same level of awareness that
created them.”
-Albert Einstein

“I have yet to see any problem,

however complicated, which,
when you looked at it in the right
way, did not become still more
complicated.”
-Paul William Anderson

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 Mindset Shift Requires New Set of
‘Glasses’
Wal-Mart Stores, Inc.
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Read
•Ecology of Commerce, Paul
Hawken
•Mid-Course Correction, Ray
Anderson
Behavior
•Reduce your trash at
work/home
•Consider take, make, waste
life f products you use
•High efficiency bulbs
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 One Incandescent Bulb → One CFL

Uses 80% less electricity.

+ Saves $30-$80 on power bill.

Prevents 500 pounds of coal or

+ 1 barrel of oil from being burned.
*Majority of US electricity comes from coal fired power plants

Keeps a ton of greenhouse gas

+ (c02) out of the air.

Lasts 8 to 12 times longer > keeps 8-12

+ bulbs from the landfill.

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 Every Customer Switches 1 Bulb

+ $3 billion saved on power bills.

+ 50 billion pounds of coal prevented

from being burned.

+ 2 million cars worth of greenhouse

gases kept out of our air. (100 million tons)

+ 1 billion incandescent bulbs kept

from the landfill.

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