Saturday, November 22, 2008

Green Retailing Memo: Wal-Mart Stores, Inc. to Make Major Purchase of Renewable Wind-Power to Supply 15% of the Power For its 360 Stores in Texas, USA

As we wrote about in this piece yesterday, "Retail Memo: Wal-Mart CEO Steps Down; Head of International Operations Mike Duke to Lead Retail Giant; USA Chief Castro-Wright Promoted," current Wal-Mart Stores, Inc. CEO Lee Scott stepped down on Friday, deciding to retire after three decades with the world's largest corporation and global retailer, including serving in the top spot as CEO for the last nine years.

Scott isn't leaving Wal-Mart completely however; or right away: He will be head of the company's executive board and serve as a consultant to Duke and the board until 2011, according to the company.

Wal-Mart's head of global operations, Mike Duke, will take over as the company's CEO in February, 2009, Wal-Mart announced yesterday. In addition, current Wal-Mart USA CEO Eduardo Castro-Wright was promoted on Friday to the position of vice chairman of Wal-Mart Stores, Inc., which is a strong indication he is in line to be CEO as part of the retailer's internal succession planning process.

On Thursday we wrote about two major corporate social policy initiatives outgoing (nobody knew he was outgoing on Thursday by the way) CEO Lee Scott made and Wal-Mart announced that day. Those two major initiatives are:

>A $2.5 billion donation to Feeding America (formerly America's Second Harvest Food Bank), along with a promise by Wal-Mart to donate 90,000 pounds (70 million meals) each year to the group that supplies food to organizations assisting the hungry throughout the United States for the next couple years;

>Guaranteeing a $12.5 million letter of credit to the group planning to build a memorial to the late civil rights leader martin Luther King Jr. on the National Mall in Washington DC USA.

Read our two stories from Thursday, November 20 at the links below:

~November 20, 2008: Food Retailing & Society Memo: Wal-Mart Steps in; Gives $12.5 Million Line of Credit to Group Trying to Secure Funding to Build King Memorial

~November 20, 2008: Food Retailing & Society Memo: Wal-Mart Donates $2.5 Million to 'Feeding America;' Will Also Give 90 Million Pounds of Food A Year to the Organization

Also on Thursday, Wal-Mart Stores, Inc. announced it would make the single-largest purchase of renewable wind energy by any U.S. corporation.

Wal-Mart said it will buy enough wind power from Duke Energy Co. to supply up to 15% of the retailer's total energy load in approximately 360 Texas stores and other facilities. The renewable energy will come from a Duke Energy wind farm under construction in Notrees, Texas, and is expected to begin producing electricity for Wal-Mart by April of 2009.

The project will provide roughly 226 million kilowatt-hours (kWh) of renewable power each year or the energy equivalent of washing 108 million loads of laundry -- enough for every household in Austin, Texas to do laundry for a year, the company said.

Texas currently is the leading wind power-producing state in the U.S. The new project by Duke Energy will solidify the state's position. Additionally, former oil barron T. Boone Pickens is planning a multi-billion dollar wind farm initiative, which would include major wind farms in Texas, as part of his "Pickens Plan" renewable energy initiative for the U.S.

One of Lee Scott's major initiatives during his nine years as head of Wal-Mart has been environmental sustainability. He's pushed suppliers to decrease product packaging sizes, launched "green" retailing initiatives across Wal-Mart's logistics system and stores, introduced "green" products under the retailer's store brands, pushed energy efficiency initiatives and numerous other programs that fall under the sustainability category.

It appears he wants to go out with a "green retailing" bang between now and when he leaves his CEO's office at the end of January, 2009.

Wal-Mart's wind power buy from Duke Energy is important in the larger, macro scale for wind power because its an endorsement in the U.S. of the renewable energy source by the nation's and world's largest corporation and retailer. The company's move will likely result in other corporations and retailers in Texas buying into the huge wind farm project being built by Duke Energy in the state.

A number of publications have written about Wal-Mart's major, new wind power initiative in Texas. Below is a sampling of those stories:

[CNN-Money: Wal-Mart To Buy Wind Power From Duke Energy For Texas Stores...Dallas, Morning News, Dallas, Texas: Wal-Mart buying power from wind farm...Associated Press: Wal-Mart buys wind energy supply...Wall Street Journal Business Blog: Wal-Mart: Wind Power’s Good for the Bottom Line, Even With Cheaper Gas ...Austin-American Statesman, Austin, Texas: Wal-Mart buying wind power for Texas stores...Houston Press, Houston, Texas: Wal-Mart Turns To Wind Power, A Little...

The Morning News-Arkansas: Wal-Mart Pushes Wind Power...Energy Matters, Australia: Wal-Mart Gets Into Wind Power...Clean Energy Update, New York, NY: Wal-Mart Makes Major Commitment to Renewable Wind Power...Environmental Leader: Wal-Mart To Buy 226 M kWh Wind Energy To Help Power 350+ Stores...Wal-Mart Stores, Inc. press release: Texas Wal-Marts go green with wind power.]

Our sources tell us CEO Lee Scott has a few more corporate social policy and environmental retailing surprises up his sleeve, which the company will announce before he turns over his CEO's office to Mike Duke at the end of January, 2009. If they are on the order of the three announcements we've written about -- all three announced by the company on Thursday, November 20 -- it should be an interesting remaining two months in 'Wal-Mart World.'

As the CEO of a $400,000 billion a year global corporation and retail empire, it appears Lee Scott, like a President or head of state does, also wants to leave a legacy. It appears he also wants to set a tone for the new, incoming CEO of a Wal-Mart Stores, Inc. that maintains its heavy involvement in corporate social programs and "green retailing" initiatives, both of which are needed even more strongly now in the current global recession and environmental and energy crisis than they were even before.

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