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Working With the Enemy
Once the youngest president of the Sierra Club, Adam Werbach used to call Wal-Mart toxic. Now the company is his biggest client. Does the path to a greener future run through Bentonville?
"To this day, they won't speak to me," says Adam Werbach. His clients -- or rather, his old clients -- fired him when word got out last year that he was doing work for Wal-Mart. Of course, many people make compromises to do business with the largest company in the world -- accept lower profit margins, absorb relentless performance pressure. But for Werbach, 34, a lifelong environmentalist, the cost of working with Wal-Mart has been personal. Some of his old friends don't speak to him. His former colleagues think he's sold out. And then there are the threats. "I attended this event and someone came up to me," recalls Werbach, his discomfort still fresh. "He said, 'I wouldn't feel safe if I were you. People have gotten hurt.'" Werbach has stopped speaking in public without special security.He has made a leap that is either visionary or naive, depending on your perspective. He's been a leader in the environmental world, president of the Sierra Club at just 23, author of a 1997 book Act Now, Apologize Later that called Wal-Mart "a new breed of toxin" that "could wreak havoc on a town." He was such an iconoclast, he'd publicly challenged old-line environmentalists in a speech in 2004.
But in signing on to Wal-Mart last year, he went too far, driving off even those nonprofits who still did business with his small consulting firm, Act Now. They didn't want the help of someone who would sell his services to the Behemoth of Bentonville.
Folks at the Sierra Club, which funds the watchdog Wal-Mart Watch, begged him to reconsider, and activists John Sellers and Barbara Dudley wrote an open letter headlined, "The Death of Integrity: In Working With Wal-Mart, Activist Adam Werbach Is Abandoning His Principles."
For Wal-Mart, winning over Werbach is a critical part of its battle to redefine itself as environmentally progressive. There are nagging doubts in many quarters about just how sincere that effort is -- doubts magnified this summer when Wal-Mart postponed the release of its own long-awaited sustainability progress report. But, in fact, Werbach is hardly the only activist to see Wal-Mart as a potent partner for change. Environmental Defense has opened an office in Bentonville to work more effectively with the company, although the group is careful to take no money from the chain. Even environmental icon Amory Lovins now advises the company on its green policies. But none of that provides quite the same sheen of legitimacy as signing up the former Sierra Club golden boy.
The journey to Bentonville has been difficult, even painful, for Werbach. Yet now this activist who'd set foot in a Wal-Mart store exactly once in his first 30 years is bleeding Wal-Mart blue. "I wholeheartedly believe in what Wal-Mart's doing, which astounds me," he says. "Wal-Mart is expert at solving problems."
His new vision: to do nothing less than make Wal-Mart as well known for environmental sustainability as Target is for everyman design. And to do that in a way that's good for the business. "Our goal," he says, flopping into a retro orange chair in his Act Now office, "is to have Wall Street look at Wal-Mart's green performance, and say, 'Wow, do more of that.'"
Today, his firm operates out of new offices in a renovated pie factory in San Francisco's Mission District. The space has been retooled with eco-friendly carpeting, skylights, and a meditation room. In the last year, Werbach has hired three dozen new employees to help handle the Wal-Mart business, boosting Act Now's staff from 8 to 45. He's also pulling in other corporate clients, including General Mills, Sony BMG, and Procter & Gamble.
The Act Now team is running one of Wal-Mart's key environmental initiatives, a program Werbach himself helped design, which aims to teach the company's 1.3 million U.S. employees about sustainability. He says the company offers him the organizational leverage to make change rapidly and on a scale that the traditional environmental establishment just can't provide. The movement, he says, "is not willing to suggest solutions that are as big as the problems."
In the nonprofit world in which Werbach grew up, his conversion is not just unpopular, it's incomprehensible. Wade Rathke, who runs ACORN, a community-organizing group based in New Orleans, says he called Werbach to try to persuade him not to become a Wal-Mart contractor, but never heard back from him. "For you to believe that you and your little lonesome are changing something with a million-and-a-half employees, $350 billion of sales, well, there's a level of ego there that just is staggering," Rathke says. "It sounds like an Adam Sandler movie or something." He pauses. "I have no idea what Adam believes anymore."
Werbach woke up the morning of December 9, 2004, with the hangover of his life. The previous night, he had stood at a wooden lectern at San Francisco's Commonwealth Club to tell a packed room of 250 people, including the leaders of environmentalism's most influential organizations, that their movement was dead. He had become increasingly discouraged by a supposedly progressive movement that didn't know how to be progressive with its own ideas. Within the first five minutes of the hour-long, 31-page speech, he announced with the tone of someone reading last rites: "I am done calling myself an environmentalist."
In its effort to protect seal pups and redwood trees, he told his mentors, friends, and colleagues, the movement had forgotten human beings. What was needed, he said, was a new way of connecting sustainability to the aspirations of everyday people. "Make executive directors [of environmental groups] go to a red state and try to explain environmentalism to the average American. If they don't have a plan to activate the values we share [with] the majority of Americans, then they need to move on."
The next morning, Werbach was overwhelmed with the consequences of committing professional hari-kari. "I thought the speech would be cathartic," he says. "It wasn't." His phone wouldn't stop ringing, but the voices on the other end didn't want to discuss how they could reimagine environmentalism. They wanted to tell him how wrong he was. The board at Common Assets, an environmental startup he'd been running, promptly fired him, leaving Werbach, who had a newborn daughter, without his primary source of income. Even worse, he had ousted himself from the very life he had always dreamed of. "I just remember thinking, 'What am I going to do today, become a fireman?'"
Werbach had been drawn to environmental issues since elementary school. As a 7-year-old in L.A.'s San Fernando Valley, he would check the daily smog reports before T-ball practice. By 13, he had persuaded his parents to let him open a checking account so he could become a "rainbow warrior" with Greenpeace. In 1990, as a high-school student, he walked into a campaign center working to pass "Big Green," the sweeping voter initiative in California that would have promoted everything from fuel economy to open space. Werbach recruited hundreds of students to the cause. The initiative was defeated, but the morning after, his recruits were asking their accidental leader what to do next. By the time Werbach had graduated from Brown University in 1995, he had created the Sierra Student Coalition, the first national student-run environmental organization; today, it has 30,000 members.
It was this dynamism that got him recruited in 1996 for the monumental task of changing the face of the Sierra Club, the nation's largest and oldest grassroots environmental organization. "When he was hired, people were probably expecting a scruffy kid with a beard and flip-flops," says Jon Coifman, national media director for the Natural Resources Defense Council. "That's certainly not what they got. He was articulate, smart, and had a real fresh take on things." Werbach quickly realized he could use his youth to his advantage and questioned the Sierra Club's every habit. Instead of focusing on policy, he set out to engage the public. During his first year in office, he toured the country giving more than 200 speeches, trying to reach young people. By the end of his second term, the average age of a Sierra Club member had come down to 37, from 47. But he felt that he was wasting time managing internal battles. And, he admits, "I was trying to push a lot of change very fast, so I think there were a lot of people frustrated with me."
After his second term, Werbach moved on to more-entrepreneurial environmental efforts: starting Act Now, cofounding the Apollo Alliance to jump-start an alternative-energy economy, and picking up the Common Assets post. Restless and impatient, he was beginning to question not the goals but the methods of mainstream environmentalism. Then, in 2004, two colleagues, Michael Shellenberger and Ted Nordhaus, published a controversial essay, "The Death of Environmentalism." That led Werbach to phone the head of every major environmental group and ask one question: Have you achieved your goals? "They literally laughed at the absurdity of the question," he says. But he wasn't laughing. While he was in college, he says, "I helped create the largest desert park in the country, Death Valley, and I'll proudly take my daughter there. Meanwhile global warming is going to turn the entire country into a desert."
This realization seemed so urgent that he issued his manifesto at the Commonwealth Club. In the difficult months that followed, he recalls, he thought he knew what hitting bottom was like. Then Wal-Mart called. "It felt like proof that I was wrong."
The text of Werbach's controversial speech had taken on a life of its own, circulating furiously online. It ended up in the least likely of hands. Andy Ruben and his wife read it together on a flight from Arkansas to Chicago. A former Ernst & Young management consultant with no environmental background, Ruben was Wal-Mart's recently named vice president of sustainability.
When Werbach said yes to Wal-Mart, a colleague said, "I have no idea what Adam believes anymore."
"I was really moved by the guts it took to have that perspective," says Ruben, 34. Charged with designing an environmental push for the company, he was trying to talk to as many environmentalists as possible. He asked one of his consultants to see if Werbach would meet with him. Werbach's response: No thanks.
Ruben persisted, and Werbach finally agreed to meet in the spring of 2005. On one condition: "I remember people saying, 'Don't let them buy you lunch because once they do, you become tainted.'" He quickly learned that wouldn't be an issue -- Wal-Mart never buys anybody lunch.
At San Francisco's Town Hall restaurant, Werbach insisted to Ruben that Wal-Mart's business model precluded it from being a sustainable company. "I wanted to talk about labor conditions," Werbach says. "If employees weren't happy with labor conditions and didn't have health care, you couldn't be a sustainable company." Ruben replied that he didn't believe Wal-Mart's labor practices were abusive. Says Werbach, "I didn't buy it."
He left the lunch suspicious that Wal-Mart wanted to use him as a PR fig leaf. "I thought I was being spun," he recalls. But he couldn't shrug off the audacity of Wal-Mart's ambitions. "Even if they did a hundredth of what [Ruben] was talking about, that would be good." He found himself thinking about how environmentalism has been aimed mostly at "people in big cities, coastal towns, and college towns. But Wal-Mart speaks to 90% of the American public every year."
Werbach had given Ruben a list of things to do if he really wanted to understand the landscape -- check out Curitiba, Brazil's efficient transportation system; learn about San Francisco's solar program; meet with experts on carbon emissions; read Rachel Carson's Silent Spring. "He followed up with everyone I suggested and read every book I told him to read," Werbach says.
He and Ruben continued to talk over the next several months. Early in 2006, Ruben invited Werbach to Bentonville for Wal-Mart's quarterly assessment of performance. When senior managers were told that improving sustainability would be factored into their evaluations and bonuses, he was floored. At that moment, he concluded that Wal-Mart was serious about making sustainability part of its daily business.
But he saw a major problem. Your customers, he told Ruben, don't buy things at Wal-Mart because they're recycled or use less energy. They shop for the lowest prices. Once Wal-Mart stocked green products, it would face the same problem environmentalists had struggled with for years: getting customers to buy the stuff. How could Wal-Mart make sustainability matter to its customers?
Then he and Ruben hit on an idea: Wal-Mart and Sam's Club's 1.3 million employees were the ideal focus group for the company's customers -- and for most of America. If they could get the associates to care about sustainability, they would know how to reach the company's 127 million weekly customers in the United States And the employees could help spread the message. Ruben offered Werbach the opportunity to do a pilot project.
Werbach hesitated. He knew the fallout of signing on with Wal-Mart could be severe. But his wife, Lyn, CFO of Act Now, says Wal-Mart's potential was irresistible: "Imagine that struggle of knowing there's an opportunity that has unprecedented reach and not taking it." Werbach realized that as much as Wal-Mart could use him, he could use the company.
At the last minute, a wealthy supporter offered to fund his Wal-Mart work, so he wouldn't have the indignity of a Wal-Mart check. Werbach turned him down. He recognized that people respect advice more when they pay for it. For him, it was worth betting his reputation and his business on Wal-Mart only if he could get a seat at the table. "It seemed pretty clear that [by signing on] I would get a level of access that I would never get as an outsider."
Wal-Mart gave Werbach the lab to do what he'd exhorted his colleagues to do in the Commonwealth Club speech: make sustainability personal. The program he has designed for the largest employer in the country, in fact, is called the Personal Sustainability Project. The idea of PSP is simple. Each participant picks some part of his or her life that seems somehow "unsustainable" and develops a plan to fix it. The goal is to teach Wal-Marters what sustainability is, and to show them the power of changing even the smallest habit, like not printing a paper receipt at the ATM.
Since Werbach started testing his ideas last summer, he and Act Now's 12 field trainers have conducted 150 PSP sessions across the country, covering 4,000 U.S. stores. Each store in a given region sends two volunteers to a paid retreat, a daylong series of open, guided discussions that start with Werbach's stripped-down definition of sustainability: "having enough for now, while not harming the future."
The sessions are designed to encourage participants to discover for themselves how to apply the idea of sustainability to their own lives. For some, it's finding ways to preserve a precious bass-fishing spot; for others, it's realizing that buying things on credit reduces future spending power. Each employee comes up with a PSP, a single, repeatable action -- biking to work, quitting smoking -- that is good personally and for the wider world. When they return to their store, armed with guides and DVDs, they are supposed to recruit 10 volunteers apiece to help the rest of the staff develop their own PSPs.
The program is radical for Wal-Mart in two important ways: It's totally voluntary. And, unlike Wal-Mart's usual highly detailed procedures, it is free-form. Some stores have shrugged off the program altogether; others are so enthusiastic they have developed store-level PSPs and community-wide PSPs. The strategy is to spread PSP practices virally through the Wal-Mart ecosystem and beyond.
Wal-Mart would not allow Fast Company to interview employees, but according to Act Now, there's some evidence of progress. Shonda Godley, who works in Bentonville, decided to connect her PSP with her farmer grandfather's death from cancer, which she believes resulted from a lifetime around pesticides. She is taking her fourth-generation family farm organic. "On the surface, it sounds rather silly to say that when I choose organic foods, farmers can be healthier," she said in an in-house PSP magazine. "But we sustain organic farmers by purchasing their products; we know that they are not putting their health at risk to make a living."
And Werbach talks about 17-year Sam's Club associate Kim Nicholson, who challenged a senior manager to explain why a meal of pizza and soda in the company cafeteria cost $2, while salad and water cost more than $5. Within a week, Werbach says, the price of the healthy food was lowered in all Sam's Clubs.
Although Werbach's PSP method sounds a little hokey, it's rooted in positive psychology. The idea is to change behavior not, as he puts it, by the "blunt-force trauma scare tactic" that most activists use, but by getting people to change tiny behaviors -- nanopractices. "For too long, environmentalists have been telling people they need to sacrifice," Werbach says. "But the great modern challenge is how to be happy. This is the missing link."
Although the PSP program is relatively new, it's being measured, like everything Wal-Mart does. According to weekly reports from the stores, roughly 40% of associates who have made a PSP are staying committed to it, Werbach says, and 12,000 employees have quit smoking.
The PSP effort baffles some of Werbach's former colleagues. "Someone with [Werbach's] kind of brain who has been called a wunderkind is now doing a hybrid between Jenny Craig and SmokEnders for Wal-Mart," says John Sellers, who heads an activist group called the Ruckus Society, a former Act Now client.
Werbach, of course, argues that issues like weight loss are among the most effective entry points for getting people to care about the environment. "People care about themselves first, so you have to start with what's important in their lives." It's Organizing 101: Meet people where they are. "If Wal-Mart doesn't fulfill its goals," Werbach says, "there will be a lot of very angry associates who are very much bought into this now."
A few environmentalists are starting to see value in Werbach's work. Hunter Lovins, cofounder of the Rocky Mountain Institute and coauthor of the pioneering book Natural Capitalism, was so dubious of Wal-Mart's green conversion that she went to Bentonville in person to see CEO Lee Scott. She calls Werbach's Wal-Mart strategy "absolutely world-changing brilliant. By the time he's done, he'll have spoken to 1% of the U.S. workforce."
Werbach is eating in a vegan restaurant in San Francisco, just back from a Greenpeace International board meeting in Amsterdam. He's getting amped up about a "greenwashing attack" he wants to mount against 7-Up for claiming its flavors are "100% natural" in a recent TV campaign. "It's a total misuse of the term 'natural.' You're tricking people into thinking they should improve their lives with this thing that is natural and healthy -- it's immoral," he says. "I'll go talk to them about it first. I'll tell them to fix it. If they don't? Then you attack."
When asked how Wal-Mart would feel about him exercising his activist self, the question catches him by surprise. "Who knows if Wal-Mart would like that?" he shrugs, as if not realizing how much shelf space 7-Up's parent, Cadbury Schweppes, has in every Wal-Mart store.
Werbach knows he's straddling two contradictory cultures. He is a complicated blend of creativity, idealism, and pragmatism; sometimes, he admits, that puts him at war with himself. He seems able to compartmentalize things that might otherwise be inconvenient -- his irritation over 7-Up's ads versus the wishes of his largest client; his initial outrage over how Wal-Mart treats its employees versus the opportunity to leverage Wal-Mart to change the world.
"There's an interesting book called Contingency, Irony, and Solidarity," he says. "I guess that's where I live, somewhere between all those places. I don't know whether it's irony or hypocrisy." (After 20 years as a vegetarian, Werbach has started eating meat again since joining forces with Wal-Mart. If he sees any irony in his rebirth as a carnivore, well, he lets that pass.)
There are many questions about Wal-Mart's commitment to sustainability. The CEO has announced bold, clear goals for the company: to produce zero waste; to use 100% renewable energy; to supply customers with sustainable products. The hurdles, though, are enormous. Two years ago, amid much fanfare, Wal-Mart opened two experimental energy-saving stores. This year, the company says it will open four "high efficiency" supercenters. Meanwhile, in the two years ending December 2007, Wal-Mart will have opened hundreds of conventional stores.
And for every success story, like the Wal-Mart in Brady, Texas, that has recycled 8,000 tires, doubled paper and aluminum recycling, and created community PSP teams that include the mayor and the city landfill manager, there's a story like the one in Santa Fe. We visited the New Mexico store that went through the PSP training in April; the associates we asked had never heard of PSPs. One of Werbach's staff acknowledged in an email that the Santa Fe store's management team didn't buy into the PSP training and never passed it on to the staff.
"I'm an insider with outsider tendencies," says Werbach. "I'm still trying to channel the outsider."
Some moments in the past year have been surreal for Werbach. One day in Bentonville, he was leaving Wal-Mart headquarters, walking to his parked car. "I looked back to Lee Scott's window, and he was waving me good-bye. It was the oddest experience, the CEO of the world's biggest company waving, kind of like, Come back, ya hear."
But for Werbach, the big surprise is how much he's learned from Wal-Mart. He riffs on the company's obsession with its core mission, its relentless tracking of results, its "correction of error" meetings. "In failure," he says, "you don't hide your head in shame, you actually get on the phone the next day and you talk about what went wrong." In Wal-Mart's culture, he has found what he thought was missing from the environmental establishment.
"Right now I'm an insider with outsider tendencies, but I'm still trying to channel the outsider," he says, washing down his hummus with coconut juice. "I don't think you can be both. I mean, we'll see. I'm going to try. I'm trying."
© 2007 Fast Company