"Now more than ever" is the title of this 2nd global sustainability report by the world's largest company Wal-Mart. With total sales of just over $400 billion, showing year on year growth (7.2% in 2008) over 7,800 stores in 11 countries, 100,000 suppliers, and 2 million employees, Wal-Mart country is such a giant that it's hard to know where to begin when reviewing their Sustainability360 program. Wal-Mart critics continue to abound and whilst the controversies reign, there does appear to have been a genuine turnaround at Wal-Mart since the days of the "Wal-Mart Effect". Mike Duke, President and CEO, follows in the footsteps of Lee Scott with a comprehensive sustainability commitment in his opening remarks. He describes sustainability as both representing a responsibility and an opportunity "now more than ever… we are on the road to making sustainability sustainable at Wal-Mart…we’re not scaling back or even just staying the course in sustainability. We’re expanding our efforts around the world." Wal-Mart commit to creating more jobs in a recessionary economy, as opposed to cutting jobs as so many other companies have been doing and plan to do. Wal-Mart created 63,000 jobs in 2008 alone.
The report opens with a review of Wal-Mart's economic impacts. The Wal-Mart philosophy hasn’t changed from its everyday low prices – but since Wal-Mart's rebranding, low prices are the key to making people's lives better. And we are talking about a lot of people's lives – 200 million visits to Wal-Mart stores each week. Wal-Mart quotes from a Global Insight report that the average saving of the American shopper is $3,100 per year, whether they shop at Wal-Mart or not! This is a powerful statement describing both the direct and indirect effect of Wal-Mart's pricing policy on the national economy. Another example is drugs "our $4 prescription drug program has saved our customers nearly $2 billion since its inception more than two years ago." In Mexico, Wal-Mart opened Banco Wal-Mart and now has 70,000 customers. "Wal-Mart China has a goal of engaging 1 million local farmers in its direct-farm program by 2011. Today, we work with nearly 100,000 Chinese farmers who farm 25,000 acres of farmland to supply our stores in the region.” The list is endless, from adopting SME's, to working with farmers in Latin America to help them increase their crops and sales, and over $400 million in community contributions.
The sheer size of this operation dictates the need to report at lower rather than higher resolution, so at 109 pages, a long report for some, it is still an executive summary for Wal-Mart.
This report gives weight to Wal-Mart's environmental efforts with 50 of the 109 pages relating to environmental impacts. Wal-Mart's three core objectives are: "To be supplied 100 percent by renewable energy; to create zero waste; and to sell products that sustain our resources and the environment." Supporting each target are reported actions in all areas of Wal-Mart's operations including technology, eco-building, eco-efficient stores, refrigeration methods, water conservation, energy management, fleet efficiencies, hybrid cars, GHG emissions, plastic bags for consumers and a wealth of examples in all sales categories relating to the sustainability of products sold at Wal-Mart. Wal-Mart admits to not knowing how to measure waste in previous years, but that a new system has been put in place in 2008. A consumer education process is in place to educate consumers about how to shop sustainably. Despite all this positive news, I searched, without success, for a sum indicator of progress against the three core objectives: three numbers - current % of renewable energy, current overall level of waste and current % of sustainable products. Whilst there is no doubt that Wal-Mart is making far-reaching advances, a quantified measure of overall progress is lacking in this report.
The next large chunk, 16 pages, is devoted to Wal-Mart's impacts on the supply chain and its work with suppliers and local sourcing communities. Wal-Mart boosted their efforts in their supply chain in 2008 and report on over 11,000 supplier audits in 2008 with over 2% of suppliers barred from doing business with Wal-Mart. There is an admission that "difficulties still exist" but that Wal-Mart continue to focus on efforts with all external partners. This is supported by a detailed view of the supplier development program process which aims to assist suppliers in complying with ethical standards. The Uzbekistan cotton story reported by Wal-Mart, for example, shows how Wal-Mart has wielded its strength with the Uzbek government to stop sourcing from a market where basic human rights standards in cotton production could not be guaranteed.
The employee section of the report is less expansive and focuses on core issues such as health insurance for Wal-Mart employees (a subject on which Wal-Mart has long been criticized), employee voluntary PSP's (Personal Sustainability Programs) and diversity and inclusion in the workforce, without failing to mention the 37 diversity awards that Wal-Mart has received for Best Workplace for women, graduates, multiculturals, disabled, working moms and just about everyone. Wal-Mart reports 2,500 Associate Support Groups designed to engage and assist special interest groups within the employee population. Charitable giving and employee volunteer programs (over 1 million volunteer hours in 2008) are also reported.
This is not an easy report to navigate: no contents list, no index (GRI or otherwise). The report offers three main sections – economic, environment and social – in that order, so looking for anything specific, such as the number of Wal-Mart employees, or the piece on supplier diversity, takes some persistence. The report attempts to give a global picture and includes spotlights on the different Sustainability360 activities in Wal-Mart operations throughout the world – Asda in the UK, Canada, Brazil, Mexico, China, Japan and many others, giving another perspective on the scale of Wal-Mart's reach. The language flows well and makes easy reading, free of jargon and comprehensible for the lay reader.
I can't possibly hope in this brief review to have said all the important things there are to say about Wal-Mart's impacts and reporting in the wider context. Every small action by this mammoth corporation creates large impacts due to sheer scale. The best I can do is to take this report at face value. And as such, I believe it's an earnest and well written review of the Wal-Mart gross positive effect in 2009. At face value, what is reported appears credible and the result of ongoing efforts. There is no assurance of any part of the report, so face value it has to be. The report is lightweight on data and performance indicators, and on a clear consolidated presentation of performance targets, though it is loaded with specific examples of progress in all areas around the world. There are gaps. I would have liked to have seen a reference, however small, to some of the controversy surrounding Wal-Mart in this report. This company has so many criticisms directed against it, and alleged negative impacts on local communities and suppliers, none of which is reflected in the report. This report describes the positive face of Wal-Mart, but does not give real air-time to the difficulties or challenges Wal-Mart faces. The sections throughout the report entitled "What others are saying" include quotations which are positive, complimentary and full of praise for Wal-Mart. Apparently, the not so positive quotes do not get on the Wal-Mart reporting radar. I would like to see stakeholder feedback and prioritization of core issues raised. The concept of materiality has also escaped the Wal-Mart radar. Wal-Mart's Sustainability360 appears to be driven by an enlightened approach to doing Wal-Mart's business, but not enlightened enough to include structured stakeholder engagement and materiality assessment processes and reporting. All in all, this report provides a sense of journey and optimism, though still needs to mature into the kind of report that shows the same level of leadership that Wal-Mart shows at the check-outs.
1. Report on the controversial issues
2. Include more coordinated and consolidated performance data
3. Assure certain parts, if not all, of the report
4. Report specifically on stakeholder engagement and responsiveness
Elaine Cohen is the Joint CEO of BeyondBusiness Ltd, www.b-yond.biz, a leading CSR reporting and consulting firm in Israel, specializing in a wide range of consulting services for the development of social and environmental responsibility of businesses. Elaine Cohen is an independent reviewer and has no relationship with the reporting company.