The High Price Of Low Prices

Recently, in my home town of Bellevue, Washington, Wal-Mart announced they are opening a Wal-Mart Market store, which is a miniature grocery store version of the original Wal-Mart store.  This announcement came to the chagrin of many Bellevue residents, despite some positive aspects that accompany a newly opening business.  The new Wal-Mart location will bring jobs and provide a small boost to the local economy; however, according to disgruntled Bellevue residents, at the expense of the well-being of local businesses.  

Wal-Mart has an unfortunate knack for destroying small businesses because of the low prices for which they can sell their products.  Wal-Mart’s low prices stem from a number of different cost cutting measures.

Wal-Mart may be the most prime example of disintermediation in business.  Disintermediation removes unnecessary middlemen in the chain of supply.  Wal-Mart acts as their own distribution channel by shipping Wal-Mart-sold goods from the producers, most of which are in China, to distribution centers, and subsequently out to retail stores.  The huge size of the Wal-Mart Corporation has allowed the company to cut out the middleman by creating the necessary infrastructure to be their own middleman.

Perhaps more notoriously, Wal-Mart also cuts costs by being a poor place of employment.  Wal-Mart has gained a reputation for paying low wages, being staunchly anti-union, and providing employees with no added work benefits (such as healthcare, 401k, etc).  Wal-Mart’s poor work environment is reflected in the company’s high employee turnover rate; approximately 70% Wal-Mart employees quit within a year of beginning employment.

The Wal-Mart Corporation has made a concerted effort to shrug off their negative public image by providing consumers with a high volume certified organic products; By 2009, Wal-Mart became the largest distributor of certified organic products.  However, in 2010 the USDA filed a lawsuit against Wal-Mart claiming that they had misused the USDA organic label on products which contained no organic ingredients.  Furthermore, some of the organic products sold by the retail giant adhered to less strict organic certification criteria.

Even though Wal-Mart’s attempt at “going green” was supposed to create a more positive public image of the corporation, the company’s blatant greenwashing shows that they were in no way committed to helping the environment. 

Many consumers have the notion that buying eco-friendly products will somehow save the environment; Wal-Mart is guilty of exploiting consumers with such a mindset.  Consumers can lessen the effect that consuming has on the environment by buying eco-friendly products, but pretending that the largest retailer in the world is trying to protect the environment is a joke.

Amidst all of Wal-Mart’s attempts at becoming a more “green” company, they did not change corporate policies regarding labor or their chain of supply, which both have direct and indirect environmental consequences. 

If Wal-Mart really wants to win environmentally conscience consumers over, they need to start by addressing their workers’ rights issues and start supplying more American made products.  Until that day, I refuse to step foot into a Wal-Mart and urge any environmentally conscience individual to the same.

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Apple Accused Of Widespread Pollution In China

Apple has recently come under fire from Chinese environmental groups who are accusing the corporation of polluting their country with their poor environmental practices. In a 46-page report containing research compiled over the last seven months, five environmental groups have highlighted Apple’s unsustainable production techniques. The Chinese environmental groups have stated that communities and their surrounding environment have been negatively impacted by “suspected Apple suppliers.”

The report, titled “The Other Side of Apple II- Pollution Spreads Through Apple’s Supply Chain,” was posted on the website for China’s Institute of Public and Environmental Affairs. The report holds that 27 supposed Apple suppliers are responsible for severe pollution in China. The report states that the corporation “greatly endangers the public’s health and safety.” Furthermore, the report has accused the company of taking advantage of loopholes regarding environmental laws in developing nations, allowing the company to turn large profits.

In accusing the corporation of irresponsible environmental performance, the report states, “a large number of IT supplier violation records have already been publicized; however, Apple chooses not to face such information and continues to use these companies as suppliers. This can only be seen as a deliberate refusal of responsibility.”

The findings of the report reveal that the company is responsible for widespread environmental degradation, which has subsequently caused health problems for citizens of China. The environmental grievances include extreme pollution of the Yangtze river, which has become so contaminated that the water is unable to be used for any purpose. The pollution, and other problems such as reported toxic wastes, have been allowed to occur due to improper handling of waste.

As a result of the pollution, the report notes that cancer rates have been on the rise; in one village of fifty people, nine new cases of cancer were recently reported. The report also states that in the city of Kunshan, located in eastern China, the air quality is so poor due to the presence of two electronic companies that villagers have been forced to send their children to schools outside of the city.

So far, Apple has declined to supply the information regarding who the suppliers are in China. Apple does not actually manufacture any of their products themselves, yet the company has been hesitant to ever reveal the names of suppliers.

The most recent report of Apple’s unsafe environmental practices is not the first instance of Apple being accused of having a negative impact on the environment. In February of this year, the company admitted that 137 employees in China had been poisoned in 2009 by a chemical that is used to clean iPhone screens. More recently, three employees were killed in May at a Foxconn factory in China where the iPad 2 was being produced.

In response to “The Other Side of Apple,” a spokesperson for the corporation has announced that “Apple is committed to driving the highest standards of social responsibility…we require that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made.”

China, a country that has routinely been criticized by environmentalists for its poor environmental track record, is nonetheless the production site of many American corporations. Because environmental regulations are less strict in China and other developing nations, large corporations have been able to manufacture products in an ecologically irresponsible way. In the wake of the newest revelations regarding Apple’s environmental track record, it is not yet clear whether the company will begin to take more responsibility for the havoc they are wreaking on the environment.

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Sony Announces a 31 Percent Drop in Carbon Emissions

This week, Sony announced that it has reduced its overall carbon dioxide emissions by 31 percent since 2000, a figure that has been verified by a third party company. Sony outlined its successful Green Management plan in 2006 to meet several environmental goals by the fiscal year 2010, including reducing its emissions by a mere 7 percent, but it surpassed that goal by 24 percent, bringing good news to environmentalists and activists.

Among the changes laid out in this plan was an effort to green Sony’s methods of acquiring parts and products, the production of its electronics, and the disposal and recycling of its waste. Sony focused on reducing the impact of shipping and transporting its products, lessening the emissions from those processes by 26 percent. Sony exceeded its 2006 goal of eliminating 40 percent of total waste from all of its facilities, eliminating 50 percent of waste instead. It reduced the amount of groundwater it uses by 41 percent.

In the last decade, Sony has advocated for and promoted the use of recycled and eco-friendly materials, including paper, by purchasing these materials for their own use. Most of Sony’s facilities are active in their local communities, hosting environmental workshops and supporting green initiatives. Its newly-constructed Osaki office in Tokyo was built to a high environmental standard — among its energy-saving features are an evaporative cooling system and a thermal heating reservoir. Electricity at some of its European facilities has been sourced completely from renewable sources since 2008, and 99 percent of waste from European manufacturing sites is recycled. Sony has designed and produced some of its most popular items to consume less energy, including the Bravia LCD TV and the Blu-Ray Disc Recorder device, which required half the amount of power in 2010 than it did in 2008.

In spite of these laudable successes, Sony failed to meet its goal of bringing the ratio of reused and recycled waste at facilities outside of its native Japan up to 95 percent. Though its Japanese plants reuse or recycle 99.6 percent of waste, foreign facilities recycle only 87 percent. Sony also aimed to incorporate 12 percent more reused and recycled materials into its production, but fell short of this goal at only 8 percent. Most of the company’s recycled materials come from cardboard, and it has succeeded in reducing the size and volume of its packaging, saving a substantial amount of plastic and cardboard. Though Sony wished to cut its use of volatile organic compounds (VOCs) by 40 percent, it stopped just short of this goal at 35 percent. VOCs, commonly found in plastic and latex substances such as paint and solvents, contain chemicals that can leach out into the environment as gases, and are usually difficult to substitute.

The electronics giant has high hopes for the future, as outlined in its Road to Zero campaign, in which the company has promised to cut 100 percent of its carbon emissions by 2050, building on its environmental successes and striving to meet the goals it fell short of in 2010. Other goals outlined in this plan include reducing energy consumption from 2008 levels by 30 percent per year, cutting packaging waste by 16 percent and lowering carbon emissions from transport by 14 percent by 2015. Sony CEO Sir Howard Stringer said that his company aims to be a model of sustainability in the electronics industry, saying, “From the development of new materials and energy efficient technologies, to the introduction of better processes in manufacturing and production, we will work aggressively to meet the ambitious targets we are setting for ourselves and, at the same time, establish a model for others in our industries to follow.”

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Despite Deforestation Concerns, Cargill Continues Business with Major Palm Oil Company

By: Nick Engelfried 

September 7, 2010

In the last few years, major food companies have been under increasing pressure from environmentalists to change or alter or abandon their policies regarding use of the common food ingredient palm oil.  Found in packaged food products form health foods to candy bars, palm oil—also known as “palm nut oil” or “palm kernel oil” is produced by a certain type of palm tree now grown on plantations throughout the tropical world. 

According to environmental groups, the expansion of palm oil plantations is eating away at the world’s last undisturbed tropical forests, adding to global warming while endangering hundreds of plant and animal species.  Plantation expansion has been particularly rapid in Southeast Asian countries like Indonesia and Malaysia, leading environmental groups to focus their efforts in these areas.  Iconic animal species at risk of extinction due to palm oil expansion include the Sumatran rhinoceros, sun bear, and orangutan, among others.

In response to public pressure a growing list of companies—from Unilever to Nestle—have promised to adopt policies that get unsustainable palm oil out of their food products.  Most of these market players have pledged to avoid sourcing ingredients from the Indonesian palm oil and timber company Sinar Mas, which has grown notorious for clearing rainforests in order to make room for palm oil plantations. 

Yet Cargill, one of the world’s most powerful food corporations, has so far declined to cut ties with Sinar Mas.  After offering earlier this year to revisit its palm oil policy, Cargill recently announced it would not be discontinuing business after with the controversial Indonesian company after all.  Nonprofit organizations like the Rainforest Action Network (RAN) immediately criticized this decision as irresponsible. 

Cargill’s resolve to continue buying palm oil from Sinar Mas comes even in the face of a report released by Greenpeace, which documents the company’s irresponsible forestry practices.  According to Greenpeace, Sinar Mas has consistently violated human rights and forest protection laws by clearing tracts of Indonesian rainforest without a permit and illegally displacing small farmers throughout the country.  

The report’s release early this year helped convince food and beverages giant Nestle to abandon ties with Sinar Mas.  However Cargill, formerly a Nestle supplier itself, has declined to follow suit.  “Other companies are relying on Cargill to start supplying sustainable palm oil to the US market,” said Ashley Schaffer of the Rainforest Action Network.  “This announcement from Cargill is a sign that they’ll have to look elsewhere.”

RAN has been pressuring Cargill to re-evaluate its palm oil policy since 2007, and expressed frustration that the company is still not responding.  RAN organizers plan to continue shining a light on Cargill’s involvement in activities that destroy rainforests, until this major food corporation decides to change its ways. 

Photo credit: Ben Sutherland