When Walmart’s former CEO Lee Scott announced the launch of its sustainability program in October 2005, not many in the corporate social responsibility (CSR) world took the discount retailing giant seriously. Back then Walmart was often in the news because of its environmental impact, labor issues, and overall negative reputation. Almost six years later, however, the Walmart of today is almost unrecognizable from the Walmart that was a favorite target of politicians and community organizations.
Walmart has emerged as a CSR leader. Its challenge is not easy when considering Walmart’s vast, tangled supply chain and almost one billion of square feet that the company operates. Nevertheless, Walmart’s latest sustainability report is a model that other companies will examine for its analysis of successes compared to its goals. Waste diversion and renewable energy initiatives that appear within some of the chain’s 8000 or so locations are only a couple of the report’s highlights.
Waste diversion has been a lynchpin of Walmart’s sustainability agenda. Its global operations reduced plastic bag waste by almost 50 million pounds (22.7 million kilos), equivalent to approximately 3.5 billion plastic bags–a 21% reduction from Walmart’s 2007 baseline figures. Across the pond, Walmart’s ASDA operations recycled 86% of its total waste, over 180,000 tons, most of it cardboard. In Mexico, Walmart’s stores recovers used cooking oil and turns it over to suppliers that process it to make cattle feed, biodiesel, and soap. Walmart’s California stores already divert 80% of their total waste, and some stores in the US and Canada have already achieve zero-waste status. To that end, the company just released its 2011 Global Responsibility Report.
One of Walmart’s 2005 goals was to source 100% of its energy from renewable sources, and while that gargantuan task is years away, the company has taken several incremental and ambitious steps towards energy efficiency. At least 35 solar projects are on the board from Arizona to Puerto Rico. Some of those initiatives use thin-film solar, which the company claims creates manufacturing jobs while accelerating the technology’s entry into the US market. The simple switch to LED lights in Central America are expected to decrease energy consumption by 50% in those stores, reduce CO2 emissions by 540 tons, and save Walmart at least of US$400,000 annually.
Finally, Walmart is addressing the criticism it has received over the years for its impact on society. The company has pledged to source from more minority- and women-owned businesses, and right now that spending hovers at around US$10 billion. Ethical sourcing is also on Walmart’s radar, and a frank scorecard on the global audit of its supply chain is at the end of its report. Where Walmart could face some criticism in this latest report, however, is when it discusses its employees. Like its television commercials, the section on its work culture and “associates” is more feel-good and lacks the hard data that the company discloses through the rest of the report. Partly that can be explained by the recent litigation in the US that reached the Supreme Court and naturally labor issues are an uncomfortable subject for world’s largest employer. Nevertheless, CSR professionals in many industries and countries will be scouring Walmart’s 2011 sustainability report. If Walmart can show even more transparency on the “S” side of CSR (social), and does more to engage its stakeholders throughout its CSR portal (like Timberland), the company could make its strong sustainability reporting even better.