Energy Efficiency Ain't Rocket Science, But It Could Use a Boost

Published December 17, 2010

Two years ago, I sat in a crowded ballroom in Beijing and listened to incoming Walmart CEO Mike Duke say, "By 2012, our goal is for the top 200 factories we source from directly in China to achieve 20 percent greater energy efficiency."

It was music to my ears. Even though my organization, Environmental Defense Fund, was one of the key stakeholders working with Walmart, and I had already made several trips to China to help the Walmart team shape the commitment, I was still a bit astounded. This could change everything, I found myself thinking. When Walmart speaks, suppliers listen, and other retailers and brands tend to follow. My thoughts were confirmed by a flurry of BlackBerry action from suppliers in the room. They must have gotten the message.

Well, sort of.

Since the announcement in October 2008, EDF has been working closely with Walmart and its suppliers on the ground in China to meet that goal. We've been in over 300 factories and here's what we've found: Walmart is off to a decent start with its Chinese factories, but for the program to be impactful and meet its potential, it needs to up its game. Dedicating sufficient resources to get the job done would be a good place to start.

Here's the good news: The opportunities for improvement are even larger than we envisioned -- it's not unusual for us to find savings of up to 60 percent in many factories -- and the payback periods for upgrades are absurdly short. We never recommend a project with a payback period longer than two years, and many of the recommendations we make have simple returns on investment of less than six months.

Our perspective all along has been that energy efficiency ain't rocket science. Solutions to radically reduce energy using mature technology are readily available. The trick was to better understand how such technologies could be applied in the context of Chinese manufacturing for export, mostly small and medium-sized enterprises.

And for the most part, we've figured that out. From toy factories replacing outdated air compressors to furniture makers installing motor maintenance programs, suppliers are finding substantial value in rooting out energy efficiency. One production engineer even exclaimed "Work here is fun again!" when we asked him how it was going.

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Energy Efficiency Ain't Rocket Science, But It Could Use a Boost

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