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Thu, Oct 27, 2005 - Page 12 News List

Wal-Mart unveils bold environmental plan after criticism

AP , SPRINGFIELD, MISSOURI

Wal-Mart Stores Inc unveiled an environmental plan to boost energy efficiency, reduce waste and trim greenhouse gases as part of a wider effort to address issues where it has been pummeled by critics.

Wal-Mart chief executive Lee Scott also called on Congress to raise the nation's minimum wage from USUS$5.15 per hour but said pay for Wal-Mart employees -- which averages US$9.37 -- was sufficiently competitive. He said even a slight overall increase in Wal-Mart pay would eliminate a profit margin that generated US$10 billion in profits last year.

Scott said the world's largest retailer had to be a "good steward for the environment" and believed that adopting greener practices would also be good for business by cutting costs.

"We are going to do well by doing good," he said.

But while Wal-Mart touted its environmental plan, Scott rejec-ted calls to increase workers' pay that unions and other critics say is often below poverty level. Instead, he urged Congress to look at raising the US minimum hourly wage for the first time since the mid-1990s.

"It is time for Congress to take a responsible look at the minimum wage," he said.

Scott delivered remarks to Wal-Mart workers on Monday and followed up with a conference call with reporters Tuesday. The sessions follow Wal-Mart responses to critics over diversity, pay and overseas buying and come at the start of a two-day annual conference for financial analysts.

Analysts said the environmental plans were not so much a radical change by Wal-Mart as a recognition that efficiency and waste-reduction made good business sense in an era of higher energy prices.

"That is all good, forward-thinking management," said Don Gher from Coldstream Capital Management Inc in Bellevue, Washington.

Tom Rubel, who heads consultant Retail Forward in Columbus, Ohio, said Scott was leading a genuine effort to adopt new standards.

"I do think that this is a departure. This is sort of vintage Wal-Mart. They have listened, and learned, and now they have set a course and they've established some aggressive goals and now they're going to go after it very aggressively," Rubel said.

Wal-Mart's targets for raising fuel and energy efficiency and reducing packaging waste are bold but the credibility will depend on whether the company reports its progress to the public.

"Wal-Mart is one of the world's largest companies so they have a huge influence in the market-place. There is a huge opportunity for them to influence the marketplace," said Elizabeth Cook, vice president of the World Resources Institute in Washington.

"Wal-Mart will win its skeptics over once it shows that it can deliver on these commitments," she said.

Scott said that those targets include increasing fuel efficiency in Wal-Mart's truck fleet by 25 percent over three years and doubling it within 10 years; investing US$500 million annually in efficient energy technologies at stores; and cutting solid waste from US stores and Sam's Clubs by 25 percent in three years.

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