Walmart for years has been critics’ favorite target for everything from its employment practices to the global sourcing of consumer products. Advocates have described the retail giant as everything from a corporate bully to a global deforester. Now along with other retailers, Walmart has endured its share of struggles the past few quarters, and plenty of the Arkansas-based chain’s naysayers are indulging in Schadenfreude.
But like any smart business, Walmart is responding to changing market conditions and is spearheading all kinds of changes in its business operations. Sustainability has been a central to the company’s shift in strategy, and Walmart has made commitments from zero waste to a focus on climate change. Now agriculture is in Walmart’s crosshairs: the USA’s largest purveyor of groceries has launched new sustainable agriculture goals.
Walmart’s new sustainable agriculture policy has three major initiatives: supporting farmers and their communities, food production that consumes fewer resources and creates less waste, and more conscientious sourcing of key agriculture products.
First, Walmart will sign agreements with more small- and medium-sized farms. The company will fund training programs centered on crop selection and sustainable farming practices for up to one million farmers. At least US$1 billion worth of goods sold at its stores will come from these smaller operations, while increasing the incomes of these farmers by 10% to 15%.
Next, the company that taught much of the world about how a lean supply chain drives success will apply those lessons to its food vendors. Walmart will launch a Sustainable Produce Assessment for its top food producers next year. To that end, Walmart will also invest US$1 billion to revamp its global supply chain over the next five years. In five years, all of its stores should see a reduction in waste by up to 15%.
Finally, Walmart is addressing the criticism levied against it by advocates who claim that careless sourcing of palm oil and beef has had a devastating impact on the planet. By 2015, all palm oil sold at its stores must be produced responsibly. That same year, Walmart-Brazil’s policy of declining the sale of beef sold from the Amazon and other regions that have been deforested will expand worldwide.
Whether these initiatives will satisfy advocates who have long been vocal about Walmart’s business practices remains to be seen. As they say, the devil is in the details, and some may say Walmart’s changes are neither far reaching or fast enough. Nevertheless, these policies are a promising step: and if the company’s competitors follow, the net effects can only be for the better. It’s a big tactical change from a company that has a history of growth by squeezing every last cent out of its suppliers. But Walmart’s rise the last 35 years was also because of its embrace of information technology—and if that same technology can help drive change, we are all better off.