It's Good to Be the King
Wal-Mart's $351 billion of sales in 2006 put it at the top of the Fortune 500 list again, just ahead of Exxon's $347 billion. The profit picture is somewhat different, however. Wal-Mart earned $11.3 billion, while Exxon showed a whopping $39.5 billion, 3.5 x greater. At 3.2%, Wal-Mart is doing great for a retailer - Safeway, by comparison, earned a more modest 2.1% net profit. Exxon is floating on oil at 11.3%.
Exxon's net is best in of US history. But now that most observers believe that we've passed the point of peak oil, how sustainable is Exxon's future? Equally pertinent is the question about the future of the oil economy, given the dire warnings about global climate change and petroleum's role as the provocateur. Both companies face massive challenges from inside and out.
Twenty or thirty years ago companies of such massive economic power would be kings of Wall Street, but in today's environment things are different. There are serious clouds on the horizon, and it's clear that both companies cannot continue just doing what they've been doing if they're going to sustain success.
Looked at more broadly, the combined Fortune 500 earned a stunning $785 billion in net profits last year, also a record. (And far more than the previous high of $444 billion in 2000.)
These are massive, intimidating numbers. The scale of the US economy is staggering; unfortunately it's staggering to the environment, also. Yesterday my son showed me how to measure my "environmental footprint" at http://myfootprint.org/, and the result was alarming. As a consumer, my lifestyle is significantly beyond Earth's capacity. (4.2x, to be precise, according to Earth Day Network.)
Wal-Mart and Exxon probably have many good years ahead of them, but they will endure for decades only as they develop new products and services that address the vast imbalance between the environment and the economy. They are currently on divergent paths, but we all know that in the end we cannot transcend what Earth is capable of supporting.