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Walmart Challenges Amazon On Sustainable Packaging

Walmart Challenges Amazon On Sustainable Packaging
Walmart Challenges Amazon On Sustainable Packaging
February 18, 2020   //   

By Greg Petro

As I mentioned in my article introducing this series last week, John Furner, President and CEO of Walmart US, stated during NRF, “The role of corporations has changed, and it’s not about simply creating shareholder value anymore, but creating great employment opportunities, making a difference in the environment, and adding value to the customer.”

As demand for retail sustainability grows and as companies are being held accountable by consumers seeking more sustainable products and practices (particularly younger generations), Amazon has found itself in the crosshairs. This week, I offer my thoughts on another important pain point that Walmart is quietly exploiting in competing against Amazon as it works to elevate its position as a good corporate citizen. Walmart’s strategy of listening and leveraging the voice of the customer and aligning the right sustainable practices is paying off.

Amazon’s Climate Pledge Doesn’t Go Far Enough

Jeff Bezos recently announced on Instagram his commitment of $10 billion to combat climate change with the Bezos Earth Fund. The initiative is to help support scientists, activists, non-governmental organizations and any effort that offers a real possibility to help preserve and protect the natural world and to save the earth. You know what they say, actions speak louder than words. Let’s see whether Jeff Bezos and Amazon really change their practices to combat climate change and become more sustainable. He has long downplayed the impact of the “Amazon Effect” and the company’s one-day shipping on emissions and the environment, stating that it’s more eco-friendly to have an item delivered than driving to the store. This position doesn’t factor in, according to experts, multiple items being shipped separately. According to a piece in Forbes, Anne Goodchild, a University of Washington professor of civil and environmental engineering, said “as we move towards faster delivery, it gets harder to consolidate. When we’re not paying some sort of personal cost for the trip, I think it’s easy to overlook how much travel we’re adding.”

I came across this very interesting article in Psychology Today discussing how the growth of Amazon’s and other e-tail companies needs for boxes has brought once suffering paper mills back online. However, the article cites data that shows the decline in recycling, stating “last year there was a decline of about 300,000 tons in cardboard waste sent for recycling” and cites USA Today : “consumers only send a quarter of cardboard for salvage, a low number that is attributed to the fact that 40 percent of Americans lack access to or interest in curbside recycling (many think it’s an avoidable inconvenience).”

Last September, Mr. Bezos was very vocal about Amazon’s new “Climate Pledge,” committing to meeting the goals of the Paris climate agreement 10 years early by purchasing electric delivery vans and committing to renewable energy sources and zero emissions. The news was long awaited by many in the industry, particularly as the company’s online retail business has been blamed by many for spikes in greenhouse gases, landfill volumes, and ocean waste due to transportation and packaging. But many at his own company did not believe it went far enough.

Last month, several headlines broke, including a feature in Bezos-owned Washington Post, covering the news that more than 350 Amazon employees violated a company gag order when criticizing Amazon’s climate practices. The group of workers called themselves “Amazon Employees for Climate Justice” and expressed concerns with the company’s business with the oil and gas industry as well as its carbon footprint. Amazon bars its workers from commenting publicly on its business without corporate justification and approval from executives.

The Washington Post article cites one quote from an Amazon employee, “While the company has publicly announced measures to reduce emissions and impacts in the coming years, it does not add up with its ongoing support to oil and gas industries and its efforts to silence employees who speak out. I stand with fellow employees who prioritize sustainability over profits.”

I find this interesting considering a few weeks ago I focused on how Walmart is working to do just that – make sustainable, sustainable. Which leads me to my next point: Walmart is pushing in the dagger just a bit deeper as it amplifies its environmental practices with precise timing.

Walmart Partners with Consumers and Suppliers on Sustainable Packaging

Over the past few months, Walmart has been ramping up its efforts to implement and encourage more sustainable solutions, including the completion of 120 electric car charging stations at its stores, committing to more sustainably-sourced private coffee brands and agreeing to subscribe to 36 community solar gardens.

However, the core focus of its programs publicly has really been centered on sustainable packaging solutions and recycling – interestingly aligned with Amazon’s biggest environmental weak spot. 

An article interviewing Walmart Lead for Sustainable Packaging Ashley C. Hall cited data from the EPA which found that individuals produced over 80 million tons of container and packaging waste in 2017, and only 50.1% was recycled, the rest ending up in landfills or combusted for partial energy recovery. Ms. Hall notes in the piece that “it is important for those in the supply chain to know how to design with the end of life in mind.”

Walmart has been embracing this philosophy by opening more locations integrating on-site recycling, holding in-store events to educate its customers on the importance of correct recycling, and working to add a How2Recycle label on every private label product as part of its Walmart Recycle Together program. How2Recycle is a standardized labeling system that clearly communicates recycling instructions to the public. It involves a coalition of forward-thinking brands who want their packaging to be recycled and are empowering consumers through smart labels. Target has also become a member. Walmart’s private brands are aiming for 100% of their food and consumable products to have the How2Recycle labels on-pack by 2022.

Walmart announced last year an initiative called Project Gigaton, which aims to partner with suppliers to avoid one billion metric tons of greenhouse gases from the global value chain by 2030. According to the website, “Through Project Gigaton, suppliers can take their sustainability efforts to the next level through goal-setting, and get credit from Walmart for the progress you make.” The site states that hundreds of Walmart suppliers have gotten on board by committing to reduce emissions since 2017.

But it’s not all about consumers and suppliers. Walmart is also setting aggressive sustainability goals within its private label business including seeking to achieve 100% recyclable, reusable or industrially compostable packaging for its private brand packaging by 2025 and to reduce private brand plastic packaging when possible, optimizing the use to meet the need.

The Walmart Recycle Together program is also collaborating with brands to educate consumers on recycling best practices. For example, Unilever’s national “Bring It to the Bin” program, launched at Walmart’s 2019 Sustainability Milestone meeting, encourages customers to recycle their personal care product packaging, especially in the bathroom.

A recent study cited in this Forbes article found that more than a quarter of people surveyed (the vast majority being Amazon Prime members) believe Amazon has a very negative or somewhat negative impact on the environment.

With Walmart pushing hard on packaging and recycling, it will be interesting to watch whether Amazon’s newly-announced investment in combatting climate change will turn the tide on its negative image regarding environmental responsibility. With consumers more interested in sustainable options than ever, the proof will be in the pudding on whether Amazon is able to meet the aggressive milestones put forth in the Bezos Earth Fund and answer the call from its employees to do more. Let’s all hope, for the sake of our planet, it’s not just a bunch of hot air. And I’m not just talking about global warming on this one.