Why Walmart is Ridiculously Cheap?

Did you ever wonder why and how and why Walmart is ridiculously cheap? A truly massive multinational company that spans continents, Walmart has been either the biggest or second-biggest company in the world since 2000. In 2019, it employed 2,200,000 people, and with this size comes power.

Over the last two decades, documentaries and investigative reports alike have revealed Walmart’s reliance on worker exploitation, oppressive wages, and sweatshop labor in order to keep their prices low. So, with these two realities in mind, I want to look at another axis of Walmart’s operations: sustainability. Specifically, how is Walmart really impacting the environment?

In 2005, these are the reasons why Walmart CEO, Lee Scott, sought to drastically pivot the company’s goals. And so, Scott set Walmart down a path of sustainable enterprise, seeking 100% renewable energy, zero waste, and more sustainable products over the course of the next decade and a half. The future was bright, or, at least, Scott’s vision was. But, this new, idealistic version of Walmart seems to run counter to the reality of Walmart’s operations.

One of the main strategies of Walmart has been sourcing in big volume and sourcing globally. The company focuses on keeping the basic products with high demand in topmost priority. This gives a great advantage over price and supply chain management. Also with this, the maximum sale is achieved and profitability is sustained. Behind the success story of Walmart low prices with high volume is a key strategy Walmart follows.

Despite Walmart’s size, it was remarkably hard to find up-to-date information about its climate and sustainability-related actions. Or rather, there is a fair amount of readily available information, but it’s all in the form of Walmart press releases.

So, let’s start off with what Walmart says they’re doing, and then see if it actually aligns with their actions. Walmart’s most recent environmental target has been branded the one gigaton project. The company is trying to reduce 1 gigaton of their emissions from their supply chain by 2030 as well as reduce emissions from their own operations by 18% by 2025.

Walmart claims in their 2019 Environmental, Social, and Governance Report that they are well on their way to reaching those goals. Among Walmart’s list of advertised accomplishments in 2019, they have spurred an 11% decrease in fuel emissions since 2018 eliminating 87,000 metric tons of truck emissions from their fleet as well as diverted 78% of waste materials from the landfill.

They also estimate that 28% of their global energy needs are supplied with renewable and they’ve reduced their greenhouse gas emissions by 6.1% in 2017 compared to 2015 levels. In short, when it comes to fossil fuels and waste reduction Walmart says it’s making progress, but the real question is whether this progress is actually significant given the sheer scale of the company.

To put it in perspective, Walmart’s annual revenue is worth more than Costco, Home Depot, Microsoft, Target and Best Buy’s combined. Essentially, Walmart wields the power of a country. And not a small one; a large one with influence over thousands of suppliers across the world.

So, the pace it sets for its climate action has a direct effect on climate change. With Walmart’s own claims out of the way, let’s look at whether their sustainability efforts are real and if so, whether these efforts are actually worthy of the praise Walmart seems to want.

Back in 2005, Lee Scott sought to carve a road to 100% renewable energy use across Walmart’s operations. After a decade and a half of the sustainability campaigns and environmental efforts, the EPA reported that Walmart’s U.S. energy mix only included 5% of renewable energy in 2019. And If we look at the emissions totals that Walmart reports to the Climate Disclosure Project every year, it seems like all of Walmart’s emissions campaigns are just PR schemes.

Walmart was greenwashing on a large scale. They were investing some resources in renewables and sustainable campaigns, but those efforts were always second to the number one priority at Walmart: growth. With Walmart’s razor-thin margins and hyper-growth strategies, there is very little room left for a system-wide environmental transformation.

Walmart has built its empire on externalizing every cost they possibly can onto workers, consumers, and the environment. So to add back in those costs would eventually mean loss of profit. This externalization strategy is epitomized in their low-cost, low-quality products that allow Walmart to outcompete other local businesses, ultimately driving costs down and incentivizing an overconsumption-based economy.

Walmart may have diverted 78% of its own waste from landfills in 2018, but the shoddy nature of many of its products leads to significant waste on the consumer’s end. For example, Walmart sold a Miley Cyrus-themed bracelet in 2010 even though they knew the jewelry contained high levels of the toxic metal cadmium; when they publicly announced the toxicity of the bracelets, all those bracelets ended up in the trash.

And now Walmart is offering a 2-hour shipping option, a move that once again shows Walmart will always value the bottom line and growth over environmental concerns. In the midst of a global pandemic and stay-at-home orders, this move will undoubtedly bring more trucks and fleet vehicles onto the road as more people rely on online shopping to satisfy their wants quickly.

Online shopping is essential in a pandemic, but there’s a stark difference between 5-day shipping and 2-hour shipping. Offering 2-hour shipping, however convenient, is not the road to a zero-carbon company, it’s the exact opposite. As I’ve already mentioned in my online shipping video, 2-hour shipping has one of the worst environmental impacts out of all shipping options.

It means inefficient truck routes, half-filled delivery vans, and a large fleet to keep up with such a quick timeline. As shipping time decreases, environmental damage and emissions increase. So, with all this in mind, it’s clear that Walmart has crafted two identities. The sustainable leader and the growth-hungry polluter.

Given Walmart’s consistently poor record on worker well-being, sweatshop labor, pressure on local businesses, and chemical waste (essentially everything that isn’t related to growth), it’s hard to believe that Walmart will ever become some sort of sustainable messiah.

Indeed, they have yet to really make that much change. Or rather, they are making similar progress to other companies in the retail realm but, as Walmart is 5 times bigger than its competitors, they should be doing 5 times the work. With the size that Walmart enjoys, they can not only influence individuals but whole governments.

So, when it comes to the environment, they definitely could be doing a hell of a lot more than letting their emissions rise 21% over 15 years while claiming they are an environmental champion. In this way, Walmart reveals the downfall of a profit-first, capitalist economy and puts on display why capitalism will not be able to quickly mitigate climate change.

Even if Walmart dives headfirst into drastically reducing emissions, there will always be another company waiting to take its place. Only through democratic regulation and a thorough transition into worker and community-owned operations can this growth-and-profit-over-environment mindset truly be replaced

3 thoughts on “Why Walmart is Ridiculously Cheap?

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