Walmart's Emerging Role in Sustainability Consulting

The world's largest retailer offered to help Webb Stickney trim energy use at his manufacturing facilities two years ago.

Walmart's little-known Supplier Energy Efficiency Program (SEEP) promised an energy audit and recommendations for basic technologies that would trim Lone Star Plastics' electricity bills at sites in Garland, Texas, and Prattville, Ala.

Two lighting retrofits later, Stickney has seen a drop in electricity consumption and is recommending the program to other companies.

"You're out running your business, fighting the day-to-day battles, and you have someone of this quality saying maybe we can help you out," said Stickney, Lone Star Plastics' CEO. "It means a lot."

Three years before Walmart announced it would squeeze 20 million tons of greenhouse gas emissions from its supply chain, the retailer rolled out SEEP with the goal of helping its suppliers save electricity and money, in turn bringing down the price of products.

Since then, SEEP has completed roughly 20 projects, with another 40 or so companies in the pipeline, a figure that will likely swell in the wake of Walmart's newly announced climate goal and its well-publicized push to survey suppliers on their environmental impacts.

While many suppliers have never heard of SEEP, there's also another fact even fewer are aware of: You don't have to be a Walmart supplier to take advantage of the program.

"While this is called 'SEEP,' we have gone outside of our supply chain," said Katherine Jennrich, senior manager of Walmart Energy Services. "One of our most recent customers, they are not a Walmart supplier, but they did participate in the program. SEEP is sort of a misnomer."

Although Stickney has yet to crunch the numbers on the exact amount of electricity Lone Star Plastics is saving a year after completing the SEEP lighting retrofits, others boast impressive results. Von Drehle, a paper towel and tissue supplier, for example, saved $37,000 in one facility from a SEEP lighting retrofit. Another supplier, Dana's Undies of Georgia, saw its energy costs fall 71 percent.

A Simple Goal

The premise behind SEEP is simple -- share with its suppliers the expertise it has accumulated through making its own fleet of clubs and super stores more efficient, Jennrich explained. At the same, the program gives suppliers access to a slew of proven energy efficient technologies in the areas of lighting, HVAC, building envelope and building controls -- at the same prices Walmart pays.

"We wanted to leverage that knowledge and take it to our supply chain because we found that often times, our small- to med-sized manufacturing suppliers were being underserved by traditional energy services companies," Jennrich said.

The program works like this: Interested companies contact Walmart and sign a memorandum of understanding before receiving a pre-audit questionnaire to identify potential energy saving opportunities.

"This is obviously a voluntary program," Jennrich said. "We are not going to waste anybody's time if there are not opportunities. If they are in a very efficient building, we move on. But if there are opportunities for lighting, HVAC or building envelope retrofit then we will discuss the financial hurdle rate."

The questionnaire and the financial hurdle rate -- the required return on their investment -- help to shape the energy audit.

"If they are looking only for projects that will only pay back within three years, well, then those are the projects we will suggest to them," Jennrich said.