Introduction currently has over 460 renewable energy systems installed

Introduction

One of the largest retail chains in the
world, Wal-Mart, pivots to solar energy and leaves competitors in the dust with
their formal commitment to being more energy efficient. Known for selling more
for less, Wal-Mart has over 260 million customers worldwide in 28 countries and
is a leader in sustainability. (Walmart, 2017) The retail giant currently has
over 460 renewable energy systems installed at their stores and it currently
makes up 11 percent of Wal-Marts total energy portfolio. However, six percent
of the 11 percent is the total percentage of solar panels we see on the roofs
today. (WalMart, 2017) Is Wal-Mart still the leader in solar energy? Or, is
Wal-Mart overshadowing Target’s solar energy success by trying to greenwash the
company at a quicker pace. On the Wal-Mart website, they state that they are
working with others and aspire to reshape the way they work to achieve
significant and lasting improvement in environmental outcomes. Is Wal-Mart’s
goal really to work with others to create opportunities for communities around
the world. Or, are they simply working with others to continue to off-load
their capital investment and all the risk onto their partners along with
minimizing their exposure by taking advantage of the federal government’s very
generous subsidies for investing in alternative energy? (Helman, 2018)

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Problem Statement

The ideal situation that Wal-Mart is
currently trying to be in, is to be the largest retailer that operates with 100
percent renewable energy. That is an ideal situation for Wal-Mart to be in as
they can continue to be a leader and show the other smaller retailers,
nationally and internationally, which kind of approach they need to take to
have a green footprint as Wal-Mart has, and to help create a more sustainable
value chain for those retailers. Wal-Mart can also show other retailers in the
market how to create zero waste, operate with 100 percent renewable energy, and
to share their resources, i.e. co-partners that Wal-Mart currently has, or have
had, who ultimately pays Wal-Mart to have their company’s solar panels on
Wal-Marts roofs. (Walmart, 2017) The problem with this ideal situation is that
Wal-Mart will not help other smaller retailers in the market. The problem that
prevents Wal-Mart from helping others is simply greed. Wal-Mart has become a
”green giant” by using other people’s money, including the government’s money
by taking advantage of the federal government’s subsidies for investing in
alternative energy. Wal-Mart currently has installed 105 megawatts of solar
panels on their roofs of 327 stores and distribution centers, which is about
six percent of all their locations and they plan to double their number of
arrays by 2020. 105 megawatts of solar panels are essentially enough energy to
power around 20,000 houses. (Walmart, 2017) The last thing Wal-Mart wants to do
is help others financially, or by sharing their resources. The want to take
over, to be number one, and to continue to follow their business strategy of
having solar panels on every location and to be powered entirely by renewable energy.
This is a company with an electric bill totaling around one billion dollars per
year. (Helman, 2018) They are concentrated on going green not only to be
powered entirely by renewable energy, or to be known for their sustainability
initiatives, but because they want to reduce their costs and do that while
having a clean image and reputation. The most common way Wal-Mart reduces their
costs of adding more solar panels to their roofs are by convincing their
suppliers to risk their own capital to get what they want. For example,
SolarCity is one of Wal-Marts main suppliers of Solar panels who actually spend
their own money in order to put solar panels on Wal-Marts roofs. Wal-Mart
ultimately gives SolarCity access to use their roofs, but Wal-Mart gets all the
credit for going green and they reduce their costs as the average array costs
about $1.2 million. (Helman, 2018) The only solution in sight for other smaller
retailers who are trying to catch up to Wal-Mart, is to not follow in their
shoes, but to instead follow in the shoes of Target, another retail giant, but
they are nowhere near the size of Wal-Mart. The first main question is ”even
though Wal-Mart has the ability and financial ability to help others follow in
their direction of going green with solar panels, does this multinational
company truly want to help others and to risk their own capital”? And the
second question, ”is Wal-Marts main business strategy of doubling the number
of solar panels on their roofs simply a disguise to boost their sustainable
reputation and cover up their bad reputation?” What is the actual cost up to
date of what Wal-Mart has currently spent on solar panels? This paper will
discuss Wal-Marts business strategy for environmental leadership in regards to
solar energy, the problems preventing Walmart from helping others to follow in
their shoes, the financial aspects possibly hindering that part of their
business strategy of helping others, and lastly, evidence to back up these
claims.

 

Research Objective /
Importance of Research

How will Wal-Mart achieve its goal of
being an environmental leader for others and to stay on track with their
business strategy of having solar panels on their facilities while doubling the
number by 2020? The research objective of this paper will go through the
necessary steps that Wal-Mart will take to achieve their desired outcome. My
hypothesis is that Wal-Mart will not help others to follow in their footsteps
unless it financially benefits them directly. The second hypothesis is that
Wal-Mart will stay on track with their current business strategy for being an
environmental leader and they will succeed in doubling the current six percent
into 12 percent by 2020. Whether Wal-Mart reaches their goals or not, they will
still be considered the biggest retailer and the recognition they have received
for their efforts as an environmental leader will stay the same whether they
meet their goals or not. Wal-Mart, also known as a ‘bully retailer’ will do
whatever they have to in order to keep their name in the spotlight for positive
recognition.

Literature review

In regards to being the top retailer,
Wal-Mart is definitely number one. However, from 2010 to 2014 Wal-Mart was
always on the top of the lists of Solar power by the number Megawatts a company
had, but Wal-Mart is no longer number one in the category of being the top user
of solar energy (See Appendix 1), instead Target (TGT) takes the spot by
surpassing Wal-Mart of number one, which is definitely quite an achievement. (Resch,
2018) Target currently is at the top of the list of American companies that use
solar energy, even beating out their competitor, Wal-Mart, according to the Solar
Energy Industries Association (SEIA). While Wal-Mart has 145 MW of solar panels
which can be found at 364 different locations around the world. Target on the
other hand has installed around 70 MW of solar panels at their facilities in
just 2016, which brings Target to a total of 147.5 MW of installed solar
capacity at 300 facilities. There are other companies that are also using solar
energy, for example: Apple (93.9 MW), Costco (50.7 MW), IKEA (44 MW) as well as
other big, well-known retailers, but none of them are close to the number of
megawatts that Target and Wal-Mart currently have. (Meehan, 2018)

Wal-Mart
has openly announced their goal of being the green leader of renewable and
solar energy, and have stated that by 2020 they want to double their current six
percent of solar energy to 12 percent by 2020. Target also has made their goals
public, and similar to Wal-Mart, by 2020 Target wants to install solar panels
on 500 more stores by 2020, which would ultimately surpass Wal-Mart’s goal of
12 percent. In fact, target has already nearly reached their goal, unlike
Wal-Mart, as they already have over 350 completed projects, which means they
need a little over 100 more facilities to put solar panels on the roofs before
they reach their goal. (Resch, 2018) Target is staying on track with their
goals and they the “green leader”. Walmart has goals and ambitions, but can they
reach the goals that they have set? In the case of Wal-Mart, they have
committed to helping others and to show them the way of being successful with
renewable energy. Wal-Mart’s goals are in fact their strategies as well. No
matter which way Wal-Mart chooses to complete their goals, they are in turn
benefiting from the results by various ways. One of their goals is to show
others the way and get recognition from that goal. Wal-Mart uses a hands-off approach
with this goal as they technically are not showing others physically how to
have and use renewable energy to their best interest, but instead they work only
on the Wal-Mart facilities so that other smaller retailers and companies can
use Wal-Mart as an example of how they in turn can also use solar energy on
their own companies. (Thomessen, 2015) Wal-Mart, known as the bully retailer is
greedy, and they want to reap any financial gains possible. The 2020
commitments that Wal-Mart has to scale renewables and accelerate energy efficiency
globally will save the company roughly $1 billion a year simply in energy
costs. (Zipp, 2014) According to SolarCity, Wal-Marts largest solar vendor, has
stated that because of their projects with Wal-Mart alone, they have created
roughly 9,000 construction jobs in the United States, and SolarCity has also
created an additional 5,000 permanent jobs for Americans since they first
started working with the giant retailer in 2010 and in that respect, although
Wal-Mart is staying faithful to their goals and are completing them
half-heartedly, they are still helping others in many ways, even if Wal-Mart is
helping them to get on their path without helping them financially or physically.
(Zipp, 2014) According to the Wal-Mart press release, as they continue to commit
to solar and encourage others to invest, they are essentially creating more certainty
in the market and lowering the cost for everyone. The CEO of SolarCity, Lyndon
Ryan, said that,

“One of SolarCity’s biggest challenges
is that customers are still stuck with the stigma that clean energy is
expensive. Walmart’s scale, brand, and leadership are sending the signal that
solar is cost effective. Walmart is showing you can be sustainable, and you can
do it at prices that meet or beat the price of energy from the grid.”
(Wal-Mart, 2014)

In that respect, Wal-Mart using Solar
energy is helping others to grow and they are showing others how to commit to
solar energy and be sustainable leaders.

The above examples definitely point out
the positive potential for Wal-Mart. With that being said, many large MNCs and
especially Wal-Mart have rather appalling reputation, and they are still being
criticized today. In Wal-Mart’s case, they may be making these great
sustainable changes in order to help cope with the increasing pressure that
they face daily, which stems from their already weak reputation.  Wal-Mart is known as a company with a bad
reputational history. In the book “The Story of Stuff” (2010) author Annie
Leonard literally depicts Wal-Mart as one of the worst MNCs in regards to
environmental and social harm, due to the fact of its gigantic size and that
because of Wal-Marts size it creates so much pollution that their
sustainability efforts essentially remain worthless in comparison. (Thomessen,
2015) Many other smaller retailers can take inspiration and learn from MNCs
such as Wal-Mart that through their huge purchasing power, they can set certain
standards for others in the sustainability field. Wal-Mart has worked hard on
improving its entire supply chain and to complete their goals on solar energy
and setting an example for others to follow in their footsteps by following
through with their massive sustainability plan that was launched in 2009. (Wal-Mart,
2014) This sustainability plan includes collaborating with their solar panel
suppliers, take advantage of all government subsidies available to increase
their current number of solar panels, leading others, and to one day have 100
percent renewable energy which would cut their costs. All in all, Wal-Mart is completing
their goals and doing exactly what they said they would do. However, it is not
as black and white as it seems, and in Wal-Marts case, even though they have
stated on their website that they are being successful in helping others and
their own company, they are operating in a grey area. Wal-Mart will only ever
have itself in its best interest and it is obvious that they will never have
100 percent renewable energy anytime soon, but in the mean time they can
continue to make goals and to try to boost their horrible reputation. (Thomessen,
2015)

Analysis and conclusion

The aim of this proposal has been to express
Wal-Marts strategy for environmental leadership and to focus on its commitment
to solar energy and leading others to follow in their “green” path. By
addressing different strands of literature, such as the Solar energy industries
Association, “The story of stuff” by Annie Leonard, sustainability reports and
press releases from Wal-Mart and Target, among other strands of literature on dissertations
about Wal-Marts renewable energy, reputation, and current goals in regards to
solar and renewable energy, I have sought to analyze Wal-Marts initiatives and
strategies with a brief look into their reputation and why they made the
decisions they made, and the goals they wish to accomplish. (Thomessen, 2015)

My findings show that Wal-Marts has successfully
completed their goals apart from reaching their goal of doubling the number of
solar panels they will have by 2020. I predict they will reach that goal as
well as they now have a strong competitor that has already surpassed them,
Target, and as Wal-mart wants to be back in the number one spot, they need to
make more projects for more solar panels in the near future to retain their
previous spot as the retail leader with the most megawatts.

My two hypotheses were that Wal-Mart
will not help others to follow in their footsteps unless it financially
benefits them directly. I have come to the conclusion after researching this
topic that Wal-Mart does help other companies, although not directly, rather
they lead more by example, and not financially or physically. My second hypothesis
was that Wal-Mart will stay on track with their current business strategy for
being an environmental leader and they will succeed in doubling the current six
percent of solar panels on the roofs of Wal-Mart to 12 percent by 2020. After
presenting my findings on this research topic, my second hypothesis was right
about Wal-Mart staying on track with their goals, strategies, and maintaining the
position as a global leader. However, the second part of this hypothesis cannot
be confirmed, but rather a prediction can be made as to whether or not Wal-Mart
will double their current number of solar panels from six percent to 12
percent, which I predict they won’t as Wal-Mart does not install the solar
panels themselves, but instead have suppliers who pays Wal-Mart to allow them
to “use” their roofs, and Wal-Mart takes advantage of all government subsidiaries
and tax credits available for renewable energy. In that respect, Wal-Mart works
when others are available to meet their need, and as 2020 is in two more years,
it seems unfeasible to meet that goal in such a short period.