A 'green' spurt for US businesses?

Wal-Mart's new plan to pare energy costs by shifting to renewables could prompt other firms to follow its lead.

Next time you're cooling off in a Wal-Mart store on a hot summer day, picture solar panels on the roof powering super-efficient air-conditioning equipment. Then multiply that picture a million times across the rooftops of corporate America.

It's a fresh vision of the nation's energy future that energy efficiency experts say is more likely now that US business finally has its bell cow - Wal-Mart - to lead the herd to greener energy pastures. Its new "green" plan, announced this week, seeks to get all of its energy from renewable sources.

Despite numerous lawsuits charging the retailing behemoth with environmental violations, some experts say it and other companies do appear interested in tapping energy efficiency to improve their bottom lines - not just their green image. It is move that could bring business and environmental interests closer together.

"We've had other businesses that understood energy efficiency as a key to fattening the bottom line - but now we've got Wal-Mart," says Neal Elliott, industrial program director for the American Council for an Energy Efficient Economy, an energy think tank in Washington. "Having the nation's biggest retailer on board is going to make a big difference in how much attention other companies pay to this issue."

While energy efficiency has not been a prime interest of American business since the energy crises of the 1970s and 1980s, a growing number of companies have been focusing on paring energy costs and reducing global warming.

Whole Foods Market based in California installed super-efficient appliances, solar power and lighting, and high- efficiency air-conditioning equipment in its stores. About 20 percent of the company's power is generated or purchased green power, according to its website.

Others, like office-supply discounter Staples, have filled their stores and distribution centers with energy saving lighting, heating, and ventilating controls, cutting energy use by 12 percent in the past four years. Now the Framingham, Mass.-based company is deploying solar panels atop the roofs of distribution centers, and developing a plan for rooftop solar for its 1,200 US stores to hedge against higher electricity costs.

At Tuesday's announcement, Wal-Mart's CEO Lee Scott put energy efficiency and renewable energy at the center of its environmental plan. The company's aim, he says, is to get 100 percent of its energy from renewable sources; cut energy use in stores by 30 percent, cut fuel consumption in its truck fleet by 25 percent over three years - and continue to improve, doubling mileage over a decade.

The company already has a test store in Texas up and running with solar panels. Its huge truck fleet is being outfitted with plastic skirts to cut wind resistance. Adding even one mile per gallon to the fleet can save $2 million a year, he says.

"If Wal-Mart or Staples can show how it can run business with an eye toward sustainability, we think that's a good thing," says Mark Buckley, Staples' vice president of environmental affairs. "We're doing it first and foremost because it's the right thing, but it's also good, smart business."

Environmentalists are cautiously optimistic. While noting concerns about a raft of environmental lawsuits in California, in particular, and Wal-Mart labor practices, some hard-core environmentalists are intrigued by Wal-Mart's plan and possible energy revival in US business.

"Wal-Mart's new commitments to increase efficiency and reduce pollution and waste are important first steps for a company that has such a profound impact on our environment," says Carl Pope, executive director of the Sierra Club. "More companies should take these positive steps."

Designing buildings with efficiency in mind is one key to commercial energy savings, which many hospitals, schools, and offices are already doing.

The US Green Building Council in 2000 set standards for gauging the environmental impact of buildings - including energy use. Five years later more than 2,000 commercial projects representing about 5 percent (about 230 million square feet) of America's commercial building stock have applied for the Leadership in Energy and Environmental Design or LEED standard, an environmental design standard that includes energy efficiency ratings.

Saving energy can also save jobs. Using the LEED standard, Texas Instruments broke ground a year ago on a new silicon wafer fabrication plant in Richardson, Texas that will use 20 percent less energy and 35 percent less water compared to plants it built previously. Had the plant been a conventional one, the company would likely have located overseas. But thanks to the new efficiencies jobs stayed in the US, says Mr. Lovins, a consultant on the project.

American business energy efficiency surged after efficiency gains following the 1970s energy crisis, but coasted since the late 1980s. Even so,the "energy intensity" of the economy - the amount of energy business uses to produce a dollar of GDP - has fallen 60 percent since the 1970s.

Some think the nation could again see a strong corporate push for energy efficiency if other businesses jump on the energy bandwagon with Wal-Mart.

"If Wal-Mart was a city, they'd be No. 5 in country, so the company's leadership is very important," says Amory Lovins, who heads the Rocky Mountain Institute, an energy think tank in Snowmass, Colo. "If they help introduce similar efficiencies and green practices throughout their supply chain, it could have a huge effect."

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