Going Green

And even as "green" products make inroads among Wal-Mart's budget-conscious masses, they are gathering cachet among an affluent new consumer category which marketers call "LOHAS": Lifestyles of Health and Sustainability. "The people who used to drive the VW bus to the co-op are now driving the Volvo to Whole Foods," exults David Brotherton, a Seattle consultant in corporate responsibility. Brotherton estimates the LOHAS market, for everything from organic cosmetics to eco-resort vacations, at up to $200 billion. This is the market targeted by AOL founder Steve Case, who has poured much of his fortune into a "wellness" company called Revolution (it will own eco-resorts and alternative health-care ventures), and by Cottages and Gardens, a publishing company that is launching an upscale sustainable-lifestyle magazine in September called Verdant (a chic synonym for "green"). Their younger counterparts get their green news from places like Grist.org, whose founder, Chip Giller, sees the site as participating in a "rebranding of the environmental movement" away from preachiness and toward creating jobs, enhancing national security and having fun.

The second effect of Wal-Mart's entry into environmental marketing is to give eco-awareness the imprimatur of the world's most tightfisted company. "If they meet their [20 percent] goal," says Jon Coifman, media director of the Natural Resources Defense Council, "it's going to demonstrate irrefutably that reducing your carbon footprint is not only possible but financially efficient." Andy Ruben, Wal-Mart's vice president for "strategy and sustainability," said the company had assumed that certified organic cotton would cost 20 to 30 percent more than the ordinary kind, grown with pesticides and synthetic fertilizer. But when its representatives actually talked to farmers, they found the organic cost about the same. Within five years the company intends to sell fish only from certified sustainable fisheries in the United States. Wal-Mart, Ruben says, plans on being in busi-ness a long time, and it wants fish to sell.

Wal-Mart also has been on the defensive over the way it treats its employees, suppliers and competitors, which may play a role in its desire to be seen as a good corporate citizen. But to give it the benefit of the doubt, it's run by people, and they have children, too. It seems as if American business must be filled with midlevel executives like Ron Cuthbertson, senior vice president of supply chain and inventory management for Circuit City, who dutifully justifies each of the chain's environmental initiatives--substituting reusable bins for cardboard shipping boxes, establishing consumer battery-recycling centers and so on--in bottom-line terms, but then can't help adding: "I personally have a passion for this." It can almost be described as a struggle for the soul of American business, which might help explain why a top corporate executive once showed up in the office of Paul Anderson, chairman of Duke Energy Corp., to perform a mock exorcism. Anderson is an outspoken advocate for controlling greenhouse-gas emissions, and his fellow CEO suggested he must have been possessed by the spirit of an environmentalist. Some other CEOs, Anderson says, will agree with him in private but hide their feelings in public. "Part of it," he muses, "has to do with how close someone is to retirement: they think, if I can just get through the next few years without addressing this."

In assessing Anderson's soul, it should be noted that his company is particularly heavily invested in nuclear power, an alternative to fossil-fuel plants that produce no greenhouse gases, so his concern for the Earth happens to coincide with his company's interests. So much the better for him, compared, say, with Ford chairman

, a strong environmentalist who almost alone among auto executives concedes that cars contribute to global warming. Yet Ford has struggled to impose his views on the industry, or even the company that bears his name. He turned the historic River Rouge plant into one of the most environmentally sound factories in the world, at a cost of $2 billion. But Ford has had to back away from a promise to improve gas mileage on its SUVs by 25 percent and to increase hybrid production to 250,000 vehicles by the end of the decade. The company, which loses money on hybrids despite their higher sticker price, said it would join the other two U.S. carmakers in making more flex-fuel cars instead.