Profitable and High Impact Sustainability
360° Strategy to transform Walmart Mexico into a sustainability leader: large scale initiatives (550 MW of renewable energy in 2015, 592,000 recycled tons and 1,842 million liters annually saved) and leadership in supply chain recruiting.
Tell us about yourself/your team.
I have an MBA in economics. I’ve been a consultant in one of the most recognized companies in the world and was responsible for the strategic planning and development of new businesses in several enterprises. I love looking to the future, imagining where I want the company to be and defining and implementing actions that will achieve a better future. No matter how challenging the plans are, they are only good intentions without proper actions; they won’t achieve the expected outcomes, nor a significant scale. I am lucky to work with a great team of experts, within a company that can make a difference.
What makes you an intrapreneur? What are the skills, capabilities, and personality traits that make you an intrapreneur?
I am an intrapreneur because I love transforming an organization from the inside out and making it more sustainable. That is, make a company, one of the largest in Latin America, have a lower environmental impact (transport, suppliers, farmers and other links in the value chain).
To succeed, it is essential to define a vision and a strategic plan and to focus on programs that may have better environmental impact and significant scale, taking advantage of the company's competitive edge.
The necessary skills and personal features are: having a strategic vision, the capacity to define priorities, innovative thoughts and perseverance. It is also necessary to work with promotional campaigns and internal sales, and to earn support at every level.
About Your Organization
Primary country where this project is creating social impact
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Select the stage that best applies to your solution
Scaling (the next step will be growing impact on a regional or even global scale)
The Need: What social or environmental problem are you trying to solve?
I’d like to reduce the direct environmental impact of a great growth enterprise and make the value chain more sustainable through external leadership. This involves:
• Reducing greenhouse gas emissions through energy efficiency programs and the use of renewal energy.
• Reducing the consumption of water through good operative practices and water treatment plants.
• Recycling and reusing residues.
• Encouraging programs that improve the value chain: more efficient transport, packaging reduction, product improvement, training for small and medium suppliers, and fluid communication with clients to help them make better decisions.
The Solution: What is your solution? Be specific!
Our solution is to implement a comprehensive strategy called “360° Sustainability” in our direct impact and value chain. Specifically, we define very ambitious goals in different perspectives, such as:
• Supplying our operations with 100% renewal energy; achievement: 351 stores use renewal energy.
• Generating zero waste; achievement: we recycle/reuse 70% of our waste and we've reduced plastic bags’ use 68% (from 2007 to 2012)
• Responsible use of water; achievement: we saved 1,840 millions of liters in 3 years and operated 600 treatment plants that allowed us reuse 27% of the water.
• Better packaging and products; achievement: working with more than 350 suppliers to improve packaging and encourage better sustainability practices.
The Solution: Why is this solution innovative for your company and industry?
Our goals challenge us to be innovative, to do constant research and to develop new technologies. These are innovative industry technologies, such as the ones that use LED illumination that allows us to save 50% of the energy consumption. We also create alliances to develop renewal energy projects.
The Model: Walk us through a specific example of how your solution makes a difference; include your primary activities.
A specific example is the promotion of renewal energy through long-term strategic alliances between energy consumers and developers. This solution makes a difference by making our company use renewable energy. Since 2010, 357 stores have used wind power in Oaxaca, and 4 use solar energy, reducing 137,000 tons of CO2. This strategy works well because of our competitive advantages, such as scale and credit quality. Our commitment to long term energy allows for the funding and development of our projects. In 2013 we’ll have a second Eolic park and the first hydroelectricity plant. By 2015, more than 50% of the energy we consume will be renewable.
The Marketplace: Who are your peers and competitors? Identify others also working to address the needs you are and what differentiates you from them. What challenges could these players pose to your success or growth?
The sustainability initiatives that we have encouraged and the goals that we've achieved so far, have led us to be recognized as the most sustainable company in Mexico by Newsweek's Green Ranking, Poder y Negocios, Mundo Ejecutivo, etc. This gives us an advantage over our competitors. However, it is a long process and we will never be able to say that we have reached our destiny. In 2014 we’ll be the company with the most use of direct renewable energy in the world, with more than 550 MW dedicated to our business.
The suppliers are the other players involved. I’ll work to join efforts with all our suppliers and with the more than 10,000 SMES and small farmers that work in our value chain. To date, more than 250 SMEs have been trained and have developed sustainable projects.
This Entry is about (Issues)
Founding Story: We want to hear about your "Aha!" moment. Share the story of where and when the founder(s) saw this solution's potential to change the world.
That moment was when I realized that all the initiatives could achieve significant scale and that we could bring more companies into the sustainability practice. All of this is for the benefit of the communities we work in and for the company. Sustainability means a responsible use of natural resources, cost reduction, more efficiency and therefore, better competitive conditions.
For example: if we consider the total volume of the waste we have recycled since 2010 (592 million kg.), we can fill the whole Estadio Azteca four times.
It is very exciting to see how the initiatives that started in a small store, can grow so much. For example, we launched a pilot in a restaurant to reuse the edible oil used to produce biodiesel. In 2012 alone, we produced 500 tons. We also turned 5,000 tons of organic waste into compost. It is also encouraging that we can involve hundreds and thousands of suppliers.
What has been the impact of your solution to date?
I have detailed the impact achieved in previous answers. The results show that we reached a relevant scale and that our leadership allows adding more companies to the project. We constantly share practices and knowledge with small and medium enterprises.
What is your projected impact over the next 1 to 3 years?
Some of our goals for 2015 are:
1. Have more than 50% of our energy be direct renewable energy
2. Recycle/reuse 80% of our waste
3. Reuse 60% of the treated water
4. Expand our product offerings and use packaging that has a low impact on the environment
We keep innovating in each of the central axis and taking the programs to a higher scale. In the next three years we’ll add three more eolic parks, three hydroelectric plants and will promote innovative clean energy projects using solar energy. This will allow that more than 2,100 of our utilities to use clean energy, avoiding more than one million tons of CO2 emissions.
What barriers might hinder the success of your project? How do you plan to overcome them?
The barriers might be the frequent changes in regulations and the complex implementation of the projects. Regarding those barriers, I actively participate in several forums and organizations that promote better public policies, try to eliminate operative obstacles and facilitate the process. Another barrier might be the lack of businessman that take the programs to other regions of the country; that’s why I am constantly developing new supplier relationships and promoting innovation. In that sense, along with a university, I launched a student contest in order to know and support the development of new sustainability ideas.
What is the benefit or value you're creating for your business?
We’ve been able to reduce costs and become more competitive, which means better prices for our clients. We have entered into the Sustainability Index of the Stock Exchange, becoming more attractive for our investors. For example: to reduce CO2 emissions, we tested and invested in new technologies that allow the stores we opened this year to be 25-30% more efficient in the use of energy. The renewable energy allows us more control over the rates and reduces the uncertainty of supply costs, such as natural gas.
How are you leveraging internal resources (funds, time, knowledge, etc.) to support this initiative?
A central aspect is the strategic plan that I defined for the 2010-2015 period and which I’ll continue to update. In this way, I can define priorities, form a team, recruit internal support and get resources. We constantly identify new technologies and ask for internal capital for projects that have a return on investment that may be greater than the opportunity cost of capital. The concrete results are that in 2013 the capital for sustainability projects has been approved in levels we have never seen before. A central aspect to an “intrapreneur” is to cooperate with other executives by promoting projects that have a positive impact on the environment and that add value to their companies.
Expand on your answer, explaining the long-term funding and support plan.
For example, in the renewables project, we have improved the credit quality of the company, making it possible for us to get long term funding at preferential rates. Thanks to that, we can operate projects that produce clean energy for 15 years or more. In the energy efficiency and gas emissions reduction projects, the plan for 2020 makes us focus on technologies that meet technical and financial criteria, so that the internal capital remains assured for the programs.
Tell us about your partnerships across your company and externally that are key to your project's success.
The success depends on getting the conviction of not only the senior executives, but also the operation’s associates. We proved that our initiatives have positive environmental and economic impacts and that they also meet the financial profitability criteria. More alliances with external entrepreneurs are crucial for the development of the projects.
What internal support have you gotten for your project? What kind of push-back have you received?
The projects and the long term commitments need the approval of the Board of Directors, the President of Mexico and Global Walmart. We propose a medium and long-term plan, with clear goals. The push back: the recycling/reusing, as a result of not having external partners to expand at a national level.