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The Jolly Green Giant

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On July 26th Fortune Magazine published a cover story on Wal-Mart under the banner “Wal-Mart Saves the Planet, Well Not Quite…”

Something is going on here that I’m not quite sure we understand.

Whether you believe Wal-Mart is the devil incarnate or are a cheerleader for what they are doing, the truth lies somewhere else.

Call me crazy – but I believe this is a bigger, more significant, pattern changing event. We can’t understand it by looking back – we need to understand it as a new possibility that is rushing toward us. The future in the making.

Think, the end of the cold war, the Berlin wall coming down, our first trip to the moon.

That is not to say it’s all good, but here are 7 things to ponder...

  1. First, read Mark Gunther’s article. While he took my quote out of context, it’s still a great story!
  2. I believe that no organization on the planet has more power or potential to very quickly effect positive social and environmental change. What you’ve seen is just a taste of what is to come. More fuel efficient trucks is easy low hanging fruit. When Wal-Mart starts telling P&G to reformulate and redesign their products – we’re in uncharted territory.
  3. Organic food from China – good or bad? First, who am I to tell a low income family living in West Texas with both parents working two jobs that total almost 150 hours a week that they shouldn’t have access to cheap organic food? It’s the only way they can afford it. The fact that they can’t afford to shop in Whole Foods isn’t their fault. Second, it makes no sense to grow organic lettuce in China for consumption in the US. How do you battle global warming if you're developing new unsustainable distribution systems? We must grow and distribute food locally. Is this Wal-Mart’s responsibility? Yes – but not alone.
  4. Without full cost accounting, where consumers and business take full responsibility for externalities, we are all incentivized to behave in ways that are truly unsustainable. We need the corporate and political will to change this. Wal-Mart could be a leader here, but it isn’t yet! (Here's an example of the ways costs are often externalized: if traditional agriculture had to pay the true costs that come from dumping pesticides into the environment, polluting ground water, and paying the health care expenses of workers exposed to toxic chemicals, then conventional food would cost about twice the price of organically grown food! Add the cost of the war in Iraq to the price of gasoline and it would already be over $4.00 a gallon.)
  5. Is Wal-Mart Serious? YES absolutely, I’ve looked Lee Scott in the eyes. He’s a believer. This is not about greenwashing. The traditional Wal-Mart business model is broken. The stock is in the toilet. This is a smart strategic move with a sound business case. How far they go remains to be seen.
  6. What about the social issues? This is the elephant in the closet. Wal-Mart doesn't know how to deal with health care, raise wages to livable levels, or grow without killing local downtown communities. But they’re working on it. The question is how much the board of the company will really invest today. How willing are they to reduce short term earnings for a payback that may be several years away?
  7. What should you and I do? Well I’m still not ready to sell to or shop at Wal-Mart, but for the first time in my life, I can imagine that that day might come. Right now, we need to applaud the good work they are doing and continue to ask the tough questions, a few of which include:

    a. When will we see real corporate transparency in the form of a corporate responsibility report that adheres to Global Reporting Initiative guidelines?

    b. When will Lee Scott sit down with Andy Stern (head of the labor union) to have an honest open conversation?

    c. What are they doing and what are they willing to do (and by when) to provide health care insurance to all employees?

    d. What percentage of its organic purchases is Wal-Mart willing to commit to purchasing locally?

In the meantime, here's my (out of context) quote from the article:

"Wal-Mart's more serious now, but skeptics remain. Jeffrey Hollender is president of Seventh Generation, a Burlington, Vt., maker of nontoxic household products. Though Scott met with Hollender in Bentonville and offered to carry some of his line, Hollender declined. 'We might sell a lot more products in giant mass-market outlets, but we're not living up to our own values and helping the world get to a better place if we sell our soul to do it,' he says."

Here's an excerpt of my email to Mark suggesting how my remarks might be better portrayed:

Thanks, see my comments below in CAPS

On 7/18/06 2:39 PM, "Marc Gunther" wrote:

Hi Jeffrey,

I literally have two paragraphs in which to deal with Seventh Generation in my Wal-Mart story. I hope to come back and address this is my more detail in an Internet column that I now do weekly. I wonder if you would mind taking a look at what I wrote, below, and offer any corrections or suggestions.

cheers,
Marc

Not everyone's buying into the vision. Jeffrey Hollender is president of Seventh Generation, a Burlington, Vermont-based firm that calls itself the leading brand of non-toxic household products, including 100% recycled paper towels, bathroom and facial tissues, phosphate-free cleaning, dish and laundry products, chlorine-free baby diapers and wipes. You would assume that Seventh Generation would be an ideal partner for the new, green Wal-Mart and, in fact, Scott met with Hollender last year in Bentonville and offered to carry some of his products.

Hollender has declined. WHILE HE APPLAUDS WAL-MART’S PROGRESS & COMITTMENT TOWARD BECOMING A MORE RESPONSIBLE COMPANY, He's concerned about Wal-Mart business practices--its wages, health care plans, supply chain and the like. "We might sell a lot more products in giant mass market outlets, but we're not living up to our own values and really helping the world get to a better place if we sell our soul to do it," he says. Hollender also worries that being sold in Wal-Mart might tarnish his brand.

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