Case Study: Walmart Environmental Sustainability

Walmart’s Environment Sustainability Progress

Walmart had faced severe backlash from its consumers, NGOs and environmental critics due to their unsustainable environmental practices and non-committal attitude and policies towards the environment up until mid-1990’s. It was during this stage that the retailing corporation introduced green products in its store and placing them on shelves with green tags. However, this green-washing tactic was soon identified by its stakeholders when the paper towel controversy was discovered as it highlighted that paper towels labelled as “green products” in fact only had a recycled tube while its paper towels were unrecycled (Plambeck & Denend, 2008). The company’s profile amongst its customers suffered greatly with 2-8% of decline in its consumers back in 2005 according to a McKinsey & Co. (Gogoi, 2006). As a result, Walmart revised its business sustainable strategy came up with bold announcements in a broadcast in October 2005, narrowing down its goals to; relying completely on renewable energy, producing zero waste and selling sustainable products that are environment friendly. Ok, good.

After more than a decade of the unveiling of sustainable business strategy given by Walmart, the company has managed to come far from where it started. Walmart has managed to cut down 28.2 million metric tons emission of greenhouse gases from its supply chain globally whereas the initial target set in 2010 was to reduce 20 million metric tons. Moreover, the company has redesigned its transportation routes and operations hence increased the overall efficiency of its fleet. This further reduces the emissions released in the environment and increases fuel efficiency. Walmart has also coped with the harsh criticisms of suburban sprawling by investing in preservation and restoration of wildlife habitats in collaboration with National Fish and Wildlife Foundation and has successfully conserved an area of 1 million acres, stretched along 33 states of America (Gunther, 2015). Ok, good.

The corporation has also worked meticulously to assess and measure the sustainability of its products and hence created The Sustainability Consortium in 2009. The tool was also launched to create a standard and to convey the sustainability assessment mechanism to its consumers. This initiative was further extended to the Walmart suppliers under The Sustainability Index which helps them to evaluate life cycle analysis of the products they supply. The company is determined to purchase as much as 70% goods from suppliers who meet the appropriate sustainability index through the consortium (Makower, 2015) (Wal-Mart Scrutinizes Supply-Chain Sustainability, 2017). Walmart had reduced the plastic consumption by 38% by the end of 2013 and is still continually doing that by replacing one time use plastic bags, introducing lighter version of plastic bottles in the U.K and using “corn-based” bioplastics for meat packaging in Japan, reducing the total tray weight by 25.5% from 2007 to the present (Sustainability, n.d.). The company further invested in efficient refrigerator trucks and diesel-electric for product supply that do not require the engine to run to keep the products cold hence reducing carbon dioxide emissions as well as the fuel load. Walmart has also shown commitment. Ok, good.

Even though Walmart has achieved many milestones in environment sustainability in accordance with the goals it set in 2005, it has yet to mitigate all the environmental degradation that its practices cost. The retail corporation showed commitment to depend 100% on renewable resources for its energy consumption but has only been able to get 26% of the energy from renewable sources globally. Apart from that, the company has not managed to provide science-based targets for controlling its emissions that contribute to climate change (Gunther, 2015). Furthermore, the company has also been accused of green-washing and has recently faced a law suit, which was settled for one million dollars in California for labelling its plastic goods as biodegradable and compostable without providing scientific standards (Hardcastle, 2017). Keeping in view all the initiatives as well as the milestones that are yet to be achieved by Walmart, the company is making viable efforts to achieve environmental sustainability but at a rather slower pace than what had been stated in their strategic goals.

Walmart Sustainability Efforts

Following its business sustainability strategic plan in 2005, Walmart has taken many initiatives in sustaining the environment as well as the socio-economic situation for its workers and the community. The company is establishing an industry of ready-made garment in Bangladesh and is working in collaboration with all the stakeholders including the government, NGOs, industries and local workers to create a safer working environment for the labours in Bangladesh through its project, “Alliance for Bangladesh Worker Safety”. Walmart has laid a foundation of social sustainability in its supply chain by initiating this project. In the same spirit, Walmart has invested to improve labour conditions in Mexica and has stressed on ethical recruitment process in Thailand in collaboration with the government and NGOs to avoid human trafficking in Thai seafood industry.

Walmart has seen a rise of 25% in its sea food business which accounts to a total of $750 million in a short span of time. The company has committed to attain certification of Marine Stewardship Council (MSC) to ensure that sustainable fishing practices are adopted throughout its supply chain line. This initiative causes stringent rules to be applied in fisheries hence avoiding the extinction of many sea creatures while helping in the growth of a sustainable seafood industry. The company has followed the same practice for sustainable beef supply and has founded U.S. Roundtable for Sustainable Beef as a result to ensure sustainability in the whole supply chain line. Moreover, Walmart has adopted several other methods to ensure sustainable production distribution of food around the world. It has been involved with many hunger relief programs and have invested a total of $61 million to help organizations alleviate hunger meanwhile it has involved smallholders in its production chain to sustain the community.

(Walmart 2016 Global Responsibility Report, 2016)

Comparison of Walmart’s Sustainability Plan

Walmart’s leading competitor is Target as both are huge names in the retail business. However, in today’s world corporations establish their competitive advantage not only on the basis of financial statement but on their sustainability strategies. The table below assesses comprehensive comparison between Walmart’s and Target’s sustainability plan.

 

Factor Walmart Target
Ethical sourcing Walmart has worked regarding ethical sourcing in Bangladesh, Thailand and Mexico. Target’s sustainability plan focuses on ethical sourcing in Bangladesh, China, Thailand and India.
Community sustainability Walmart invests in education and training of girls and women as per its sustainability plan such as, Orange School Program and Women in Factories. Target’s sustainability plan targets children under its community sustainability sector. It focuses on assisting children who have been through violence, kids campaigning, health camps and their education.
Environment sustainability According to Walmart’s sustainability plan, it invests on recycling, zero waste, energy efficiency through renewable resources, efficient fleet system and sustainable products as well as the creation of The Sustainability Consortium. Target’s sustainability plan focuses on waste reduction, energy audits, LED upgradation, installation of internal data meters.

(Sustainability, n.d.) (CSR, n.d.)

The table highlights the main difference between Target and Walmart’s sustainability plan; environment consideration. Target focuses more on its social sustainability with its children protection programs while Walmart focuses on providing equity to its workers and on the sustainability of environment. Walmart clearly stated its quantitative initiatives regarding environmental issues in its sustainability plan while Target has not announced any such initiatives regarding environmental mitigation, which provides a start contrast between the two retail companies.

Walmart’s Sustainability: Focus on resource, recycle, regulation and reputation

Walmart has taken consideration towards the ethical and sustainable use of resources. It has focused on providing safer working environment for the labour resources in Bangladesh, Thailand and Mexico. Moreover, the company has made considerable efforts to shift to renewable resources to meet its energy requirement thus, saving fossil fuel resources. Walmart has also taken steps to achieve sustainability through recycling its plastic and paper waste, producing lighter plastic bottles and replacing plastic shopping bags by cloth bag. Walmart has also conducted awareness sessions to spread awareness regarding reduce, reuse and recycling. In addition to that, Walmart has also launched its electronic recycling offer where the customers can trade in their electronics which are later recycled.  To achieve sustainability regarding regulations, Walmart launched Sustainability Consortium in order to set a standard for itself and all other retailing companies hence strengthen the compliance with the regulations of EPA.

However, with all these steps taken by Walmart to achieve sustainability, it has more or less focused more on sustaining its reputation after criticisms on its inadequate priorities regarding conservation of the environment as well as their ignorance towards providing its customers with low quality products. Many critics have accused the company for green-washing that is, to use “green” labels in order to mislead the public and increase the customer base of the company. Walmart has however set the record straight by announcing the three sustainable goals and by making investments towards the launch of consortium and sustainability index. Thus, Walmart has achieved sustainability in resources, regulations and recycling by concentrating on sustaining its reputation.