Walgreens Going Green (WAG, NRG)

When you think of the Walgreen Company WAG, alternative energy probably is not the first thing that comes to mind. That is far from odd, however, as Walgreens is best known for operating the largest chain of drugstores throughout the United States. You may have to alter that view shortly, though, as the Deerfield, Illinois-based company is now making a concerted effort to “go green.” A spokesperson for Walgreens speaking to Benzinga said, “Our focus here at Walgreens is addressing health and daily living needs. Obviously one of those things is helping to do what we can to help with the environment. As more people are looking for alternatives and embracing environmental sustainability, we want to provide them with an option.” Yesterday, in collaboration with California-based company, 350Green, Walgreens unveiled its first Level 2 charging station for electric vehicles at one of its locations in Chicago. Such stations can add as much as 25 miles to the driving range of an electric vehicle. The company is planning to install 30 more of these stations in the Chicagoland area in the near future. In addition to the plans in Chicago, Walgreens recently announced its involvement in the nation's first privately funded electric vehicle network in Dallas. The company is partnering with NRG Energy NRG to install eVgo Freedom Stations at 18 of its locations in the Dallas/Fort Worth area along with 18 sites in Houston. These high-powered systems add 30 miles of driving range to an electric vehicle in just ten minutes. A reduction of the company's carbon footprint, as well as providing a convenient incentive to potential customers, are two driving factors behind Walgreen's new venture. When asked about potential expansion for charging locations beyond these sites, the spokesperson noted, “We have great, accessible locations. We're in a lot of neighborhoods, urban, and residential areas. We have intersections that are very convenient and accessible. It is a natural next step to look at these spots to see where would be the best places to use these chargers in the future.” As if the charging stations weren't enough, the same store in Chicago also features a state-of-the art geothermal heating and cooling system designed by Indie Energy. The system captures the earth's heat utilizing a network of four closed-loop boreholes dug 650 feet into the earth, along with a heat exchange system controlled by Indie EnergyLoop technology. This allows for a constant temperature of 55 degrees Fahrenheit and cuts down on heating costs significantly, especially in colder climate areas. The energy can also be used for cooling, as well as refrigeration for the stores. The resulting impact is a staggering 60% reduction in energy costs. Although it is extremely difficult to install such systems in existing stores, it remains a viable option for future locations. Walgreen President and CEO Greg Wasson weighed in on the project stating, “Geothermal energy is an important way we can reduce our carbon footprint, and through the innovative, sustainable design of this store, we have made it a reality. This type of system makes a lot of sense here in the Midwest. The ability to heat to room-temperature from 55 degrees rather than from 10 degrees, or cool it from 98 degrees, is saving a lot of energy.” Additional small green measures are also being taken. Such steps include: the use of LED lighting throughout the store, polished concrete floors made from recycled goods, using sinks made from recycled materials, and a dimming system used during the day when natural sunlight is sufficient to brighten the sales floor. The green actions being taken by Walgreens not only provide a service to the environment and society as a whole, but to investors as well. The company is making a serious push to streamline its business and reduce future costs. In the retail industry, electric, heating, and cooling expenditures make up a substantial portion of operating expenses. Any reduction in these areas goes straight to the bottom line. Investors can sleep well at night knowing that company managers are constantly exploring and implementing such prudent endeavors. Walgreens, which has historically been known as a “safe” investment, just got a little bit safer.