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Andrew Winston

Andrew Winston

Posted: May 6, 2010 05:19 PM

Wal-Mart: The Largest (Sustainable) Company Ever

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The 2010 Fortune 500 list just came out and I'm completely blown away by Wal-Mart's size. We all know that the retail giant is the largest company in the world. But it's by how much that gets me.

Wal-Mart clocked in at $408 billion in revenues in 2009. The second-ranked Exxon Mobil, brought in $285 billion. If the difference between the two -- $124 billion -- were a company, it would be ranked 7th on the list. Let me say that again: Wal-Mart is bigger than the next largest company by the equivalent of an AT&T.

Let's exclude the oil companies from the list for the moment, since their revenues depend heavily on the price of oil and swing wildly -- Exxon's revenues were over $400 billion last year. Looking at companies that make anything but oil, Wal-Mart is basically three to four times the size of the largest ones, including Ford, HP, Citigroup, GM, IBM, and so on.

All of this scale matters a great deal to the green movement. Wal-Mart's pursuit of sustainability in its operations, and in particular in its supply chain, is changing the way products are made globally. The company's five-year shift in strategy and in its approach to the external world (which I consider the largest strategic shift that we've ever seen) has spread beyond Wal-Mart's own walls and is influencing how the rest of us do business.

The company has improved fleet fuel efficiency 30%, and started experimenting with new fuel and engine technologies for its fleet, creating a very large impetus for truck manufacturers to build new models. Its push to adopt lighting technologies and energy management systems is helping to drive scale into new technologies that everyone can use.

But it's the supply chain pressure that really matters. I've covered this topic many times (see my pieces on Wal-Mart's trips to China and Brazil (here and here) to put pressure on suppliers). From my conversations with people in the retail space recently, including a top consumer products exec this week, it seems that nearly every other retailer is behind on this front. Sure, many are working on their own energy and waste projects, and doing well at it.

But only Wal-Mart has built tools of scale like the Sustainable Value Networks (bringing together partners in the value chain to work on big sustainability issues) and the packaging scorecard it made everyone fill out; and only Wal-Mart has gotten so involved in the sourcing choices of its suppliers.

Many people will, perhaps rightfully, still find fault with Wal-Mart on many social issues, such as health care or pay (and this week they even got fined on the environmental front for not handling hazardous waste well in California). But still, it would be very hard to find another company doing more. The race is on, even during (and coming out of) the recession, and Wal-Mart is winning. But it doesn't matter, as their scale will force everyone else to speed up as well.

 
 
 

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