Benchmark Progress towards Sustainability - Example

Benchmark Progress towards Sustainability Benchmark Progress towards Sustainability Sustainability issues have emerged as the new form of competitive advantage across all industries. Issues of sustainability have evolved owing to a three-decade-old environmental revolution that has change the nature of business operations. Concepts of environmental sustainability business practices emerged in the 1960s with marked resistance from business entities. In the early phases, companies had refused to provide for their share of environmental degradation not linking their activities to harm on the environment. However, the scene changed after several ecological problems started being visible including the drying up of Lake Erie in the United States of America. The concepts of environmental protection have taken off with numerous organizations taking the mandate of protection (Hart, 1997). This has steered to the invention of a new concept referred as “Green Marketing” or simply put, going green. The concept of going green amongst companies has gained momentum because of the increased awareness of possible increments on profits and active participation in the reduction of pollution. Nevertheless, Hart in his book identifies the need of increased measures to be implemented to drive the agenda forward past greening concepts. He contends that measurement of achievements in a span of thirty years to follow would be minimal if status quo on greening is upheld. This calls for increased measures to ensure the propagation of a sustainable global economy. A sustainable economy dictates implementation of measures that move towards indefinite support of the economy (Hart, 1997). The scene has been encouraging regarding ecological sustainability in developed nations, but the challenge on the global front remains enormous. Sustainability is viewed from different angles not limited to environmental pollution. The need for sustainability is heightened by the increase in population leading to increased demand at the present and in the process destroying the environment and its capability of sustaining future generations. Beyond Greening, an article by Stuart L. Hart (1997) posits that sustainability accrues immense returns for individual organizations. The article emphasizes on the need for incorporation of greening in all levels of production and marketing to meet and surpass consumers’ expectations. Urbanization and globalization of the world’s primary market has led to the explosive growth in the retail industry, which is led by two magnanimous corporations, Wal-Mart and Kroger. The companies form the basis of evaluation for this paper on the need for incorporation of strategic plans pertaining to sustainability. The paper examines their sustainability programs in accordance to the model stipulated in Hart’s article. Wal-Mart is an American based multinational retailer operating different department stores across the globe alongside its warehouse stores. The company is ranked the second largest corporation across the world having an immense employee base of over two million. It is the largest retailer globally under the control of the Walton family that has over fifty-percent stake. The corporation was started in 1962 by the founder Sam Walton with its headquarters in Bentonville Arkansas. The company recorded tremendous growth from its early stages with incorporation in 1969 followed by trading in 1972 on the “New York Stock Exchange” (Corporate.walmart.com, 2014). Wal-Mart’s national success can be linked to its global entry with over eleven thousand stores spread across twenty-seven countries. The company operates under its brand name Wal-Mart in majority of the states and countries, but has different names in other countries depending on its agreement. The rapid growth of Wal-Mart in different markets raised several concerns on its impact on communities it operated in and this factor was not ignored in the company’s strategies. The company operates in three fronts that include Wal-Mart America, International, and Sam’s Club. The three fronts are further discrete to general merchandise stores, food and drugs, supercenters, membership warehouse clubs, bodegas, soft discount stores, apparel store, restaurants, and cash stores. Wal-Mart U.S is the leading front for the company in terms of revenue accounting for over fifty percent. The company thrives on it business model that infers on its mission statement that states, “save money. Live better” (Corporate.walmart.com, 2014). The corporation operates with the aim of ensuring improvement in the financial status of its customers through cost saving measures and to this extent provides cheap, quality, and affordable commodities. The company recorded impressive results in 2013 after posting a 10.6 % increase in its earnings per share. It recorded in increment of twenty-two billion dollars in its sales making its net worth to stand at four hundred and sixty-six billion dollars at the close of the 2013 financial year. Shareholders have continuously enjoyed returns on their investments with a considerable thirteen billion dollars issued as dividends in 2013. The company operates over four thousand stores in the U.S with immense growth on its International front, which contributed approximately thirty of the company’s revenues (Corporate.walmart.com, 2014). Sustained growth of the company is heralded by continued innovations coupled with reliance on adoption of innovative technology. The company endeavors to provide seamless experiences to shoppers through incorporation of technology in all its processes leading to heavy investments in workforce as well as supporting technological infrastructure. The company possesses one of the utmost advanced search engines in comparison to its competitors providing necessary product information to its customers who make informed purchasing decisions based on product attributes. Wal-Mart takes part in numerous projects that involve the community through the Wal-Mart Foundation with donations in 2013 surpassing the one billion dollar mark. Its commitment at improving the community introduces the first element of environmental sustainability regarding its involvement in renewable. The company is ranked as leading in efforts of onsite solar generation in the United States. The company has commitments channeled towards increasing its sustainability projects to cover the Chinese market and across its global markets. It prides itself as a leader in the partaking of the public in its production, which is evidenced by the incorporation of a hundred thousand war Veterans hired inn different capacities. The company’s strategy based on “Everyday Low Price” necessitates increased innovations across its entire supply chain coupled with its store operations targeting reduction in costs. The company’s vision has a pillar dedicated to environmental sustainability as it aims to sustain its leadership position on environmental and social issues. The company has zero-waste goals it uses alongside increased energy efficiency to promote environmental conservation and cost reduction measures. Wal-Mart’s engagement on environmental issues is longstanding with energy efficiency methods running from 2005. The company engaged in efforts of increasing the efficiency associated to its truck fleet through investments of five hundred million dollars annually. This forms one of the bases of success witnessed in increasing fuel efficiency with over fifty percent (Corporate.walmart.com, 2014). The company has made other strides that include a reduction in its emissions related to greenhouse gases recording a twenty percent overall reduction. Other measures have yielded d immense results with over twenty-one percent of its energy requirements being met through renewable sources. The reduction of reliance on renewable sources of electricity to solar energy is regarded by the Environmental Protection Agency as the best in the United States. The company’s commitment to environmental sustainability is reinforced by its zero waste initiative that targets its production processes. The processes include recycling, reduction of dependence on plastic bag usage, and improved smart packaging. The company has diversified its commitment to environmental conservation by venturing into the organic market and it is ranked as the largest buyer and seller of organic cotton and milk respectively. The company engaged the services of different consultants in the early phases of its environmental conservation to establish the company’s environmental impact. The company has developed a Sustainability Index that forms the basis of its environmental conservation initiatives acting as a measurement tool for its initiative. The company has made an assurance to buy seventy percent of its goods from suppliers who utilize the index by 2017. The sustainability index conforms to “The Sustainability Consortium” standards and utilizes six categories for the evaluation of its products (Corporate.walmart.com, 2014). The company has engaged in efforts to reduce the amount of wastes deposited in landfills with an approximate reduction of eighty one percent in the U.S. the company opts for recycling and targets elimination of waste deposited in landfills in all its locations. The company’s commitment is enhanced by the reduction on dependence on plastic bags for shopping with an estimated reduction of three billion bags translating to thirty-five percent in 2011 (Environmentalleader.com, 2012). On the other hand, Kroger is an American establishment that has been in the market longer than Wal-Mart since its inception in 1883 through its founder Bernard Kroger. The headquarters of the company are in Cincinnati, Ohio where it was established. The company is follows Wal-Mart, but is the largest concerning its supermarket chain in the United States of America. The company is ranked fifth globally amongst retailers operating through subsidiaries and directly in different locations globally. The company has operations spread across thirty-one states in the United States in comparison to Wal-Mart that has operations covering fifty states. It has two thousand four hundred and twenty four stores with different formats including supermarkets, department stores, superstores, jewelry stores, and convenience stores. The retailer runs different banner chains alongside its branded grocery stores. The retailer is amongst the first to initiate sustainability efforts across the retail industry with initiatives of monitoring the quality of food through different tests in the early 1930s. The company has been involved in many leading initiatives that have heralded heightened competition based on environmental conscious products. Kroger was the first company to formalize its consumer research segment. This was in line with the founder’s slogan “Be particular. Never sell anything you not want yourself” (Media, 2012). Kroger’s sustainability efforts are benchmarked on the year 2000 where it developed clear strategies to deal with issues of unsustainable production. The strategy is based on four pillars that include zero waste, increased fleet efficiency, recycling and reduction of energy consumption across its nineteen manufacturing plants. David Dillon, the company’s CEO attributes the success of the company to improvements in social, environmental and economic sectors of the company. The retailer is engaged in improving its innovations, customer relations, and partnerships with different stakeholders. The company has been engaged in numerous activities as listed in its annual sustainability reports (Sustainability.kroger.com, 2014). The company has made significant strides in environmental protection by ensuring it surpassed targets established by EPA on zero waste with ninety percent compliance in its facilities across the country in 2012. The company recorded a diversion of fifty-eight percent of its waste in 2012 in efforts of achieving the established threshold pertaining to zero waste. The company’s target is to reduce its waste by seventy five percent in 2015 although that would not meet the threshold of ninety percent established by EPA. It realizes the need of compliance and has improved measures in its production process through the introduction of “Kroger Recovery System.” The system is used in turning approximately one hundred and fifty tons of wasted food into biogas that in turn powers its operations on-site (Sustainability.kroger.com, 2014). The production of biogas has not only served as an efficient waste-reduction measure, but also as a measure in the reduction of energy requirements translating to twenty percent of the total energy requirement by the company. Engagement on on-site recycling of food waste to biogas energy has reduced over five hundred thousand miles covered annually on trips by trucks to dumpsites. This translates to a reduction of ninety thousand tons of carbon emissions associated with trucking. The company has established its fleet efficiency measure that recorded a 4.8 percent decrease in overall carbon emissions by trucks. The fleet efficiency for Kroger has recorded an increase of approximately thirty three percent since 2008 (Sustainability.kroger.com, 2014). The company has established a target of forty percent increase in fleet efficiency by the end of 2014. The company’s fleet is comprised of ten thousand trailers and two thousand seven hundred tractors with an aim of reducing the number of mileage the fleet makes. The retailer’s efforts of reducing energy consumption have led to a reduction of approximately thirty-one percent translating to around 2.34 billion kilowatts saved. The reduction represents 1.47 million tons saved in terms of greenhouse gases (Media, 2012). The company has further introduced motion sensors and LED lighting to assist in the reduction of energy consumption by thirty percent. Nineteen companies under the chains thirty-nine production companies have attained the zero waste benchmark. This has contributed to a decrease of about twenty five million pounds of waste sent to landfills in different locations (Sustainability.kroger.com, 2014). The company’s strategy in the observance of environmental conservation led to the appointment of Suzanne Lindsay, the company’s first director in the sustainability department established in 2012. The company has engaged in campaigns aimed at encouraging recycling, re-use, and reduction. The first element involves increased number of reusable containers on shipped products replacing the use of over sixty million pounds of corrugated and waxed boxes. The company improved its fleet efficiency by 9.75% in 2012 indicating progress especially targeting the reduction of mileage travelled by empty trailers. The company is engaged in community support programs and contributed meals worth one hundred and sixty million through established local food banks (Sustainability.kroger.com, 2014). Compliance to Hart’s sustainability portfolio The sustainability portfolio developed by Hart is based on four pillars that include clean technology, sustainability vision, pollution prevention, and product stewardship. The environmental conservation measures implemented by the two leading retailers in the United States of America act as good examples in the implementation of Hart’s sustainability platform. Clean technology The production processes of the two retailers are influenced by changes in technology and it is important for the companies to embrace the use of clean technology. A good example is the reduction of waste products sent to landfills by the companies through recycling measures. The recycling of products increases the potential of marking notable improvements in the reduction of environmental pollution through adoption of appropriate new technology. The retail industry advocates for increased vigilance on innovations and this gives provision for future adoption of effective and efficient technologies. The example of Kroger’s adoption of motion sensors and LED lighting serves as a perfect example on the role of new technologies on environmental conservation. Sustainability vision Kroger’s sustainability vision can be summed as engagement in improvement efforts today with the aim of protecting tomorrow. The company’s objective is to at reduce its energy consumption and achieving zero waste as identified by its incorporation into EPA’s Waste Wise, a program established in 2012 to aid in the evaluation of conservation measures implemented. The company has developed a vision detailing its commitment to continued innovations that aid in improving marketing and production processes within the organization. The vision of the company is relevant in steering it to providing environmental and social solutions. This is similar to Wal-Mart that prides itself in engaging in sustainable production processes. Its vision is developed around three pillars that target the supply of its energy requirements from renewable sources, creation of zero waste, and the sale of products that contribute too sustenance of the environment and the health of people. Pollution prevention The two companies concur on the need for reducing emissions that lead to pollution specifically from their fleets. Reduction of pollution is tackled from the perspective of recycling to reduce the number of mileage covered ordinarily through the transportation of waste products. The recycling of waste is turned into a positive aspect by use as input in the form of energy in production. Product stewardship The two giant retailers in the American market have applied product stewardship in production. Wal-Mart’s product stewardship can be linked to its supply of organic meal across its stores while Kroger is engaged in quality assessment of its branded food items to meet and surpass the expectations of consumers. In conclusion, Wal-Mart’s sustainability measures are advanced in comparison to the initiatives implemented by Kroger. However, the two companies have demonstrated their increased concern on environmental issues as reflected by their production processes. References Corporate.walmart.com. (2014). Walmart corporate - environmental sustainability. [online] Retrieved from: http://corporate.walmart.com/global-responsibility/environmental-sustainability [Accessed: 20 Feb 2014]. Corporate.walmart.com. (2014). Walmart corporate - walmart sustainability index. [online] Retrieved from: http://corporate.walmart.com/global-responsibility/environment-sustainability/sustainability-index [Accessed: 20 Feb 2014]. Corporate.walmart.com. (2014). Walmart corporate - walmarts global responsibility report. [online] Retrieved from: http://corporate.walmart.com/global-responsibility/environment-sustainability/global-responsibility-report [Accessed: 20 Feb 2014]. Environmentalleader.com. (2012). Walmart to save $150m with sustainability initiatives in fy13 · environmental management & energy news · environmental leader. [online] Retrieved from: http://www.environmentalleader.com/2012/10/12/walmart-to-save-150m-with-sustainability-initiatives-in-fy13/ [Accessed: 20 Feb 2014]. Hart, S. L. (1997). Strategies for a sustainable world. Beyond Greening , 67-76. Media, T. (2012). Kroger sustainability report reveals substantive gains. 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