Walmart's Sustainability Strategy Flashcards
3 Aspirational goals for Walmart
1) To be supplied 100% by renewable energy
2) To create zero waste
3) To sell products that sustain our resources and the environment
In 1989, Walmart pushed suppliers for a green alternative. Those who packaged items in an environmentally sensible way got a green shelf tag. How many items had this?
As many as 300 products with a green tag in its store
In 1991, how was the green tag system doing?
Bad - went from 300 items to 200 and that decline continued until no more
Walmart History
- Sam Walton open the first location in 1962 in Rogers, Arkansas
- By 1985 it had 882 stores and 104,000 associates, sales of $8.4B
- By 2005 they had 6,200 stores, 1.6 million associates, and $312.4 Billion in Sales
If Walmart was a country, it would be the ____ largest in world equating GDP to sales
20th
If Walmart was a city it would be the __th largest in the USA according to its number of associates
5
If Walmart was a city it would be the __th largest in the USA according to its number of associates
5
How does Walmart dominant the retail position?
Due to its intense focus on discipline and efficiency in its supply chain
IN its retail operation, Walmart was the biggest private user of _________ in the USA
Electricity
How much carbon dioxide did Walmart emit?
More than 19.1 Million metric tons
By June 2005, Walmart staff and crew had identified three primary areas around which it would set environmental goals for reducing Walmart’s impact on the environment
1) Energy
2) Waste
3) products
how many sustainable value networks were there?
14
To get started, most networks went through a process to ______, _____, and ______
Engage, explore, and expand
Engagement
Meant looking beyond Walmart’s traditional stakeholders (customers, associates, shareholders and suppliers) to identify and work with a broader community of participants that could provide information, subject matter expertise, and other resources to help Walmart further define and achieve its environmental goals
Exploration
Meant included analyzing the life cycle of particular products or services and investigating the related environmental issues
Expanding
By looking in the value chain to identify which of our business activities are matched to the issues, and considering if we should be doing business differently
Walmart’s China side
- Walmarts chinese exports climbed to an estimated $24 billion
- Worked with more than 50,00 chinese suppliers
- Became the courtiers 7th largest trading partner
-
Walmart’s Ethical standards and compliance Team
- Walmart had an organization that monitored supplier compliance with local labor and environmental laws and the company’s own code of conduct in China and other countries
- In 2005, Walmart terminated relationships with 141 companies as a result of non-compliance when audited
One problem with the audit process was the potential for ______
Corruption
That is, people bribing the auditors to give good ratings and reviews
Walmart’s compliance audits had primarily focused on health and safety issues. However, the compliance team intended to start measuring suppliers against four walmart-defined environmental metrics
1) Water treatment
2) Waste management
3) Banned checmicals
4) Air emissions
Three of Walmarts sustainable value networks
Seafood
Electronics
Textiles
Seafood
- Was sourcing approximately $750 million in seafood annually
- Seafood business was growing at roughly 25% per year
Redmond network kickoff meeting. Ultimately they had five primary initiatives
1) Certification
2) Cluster farming
3) Marine reserves
4) Public Awareness
5) External Collaboration
MSC
Marine Stewardship Council
The cost of becoming MSC certified
- The direct cost was paid for by boat operators and processing plants
- Between the realm of $50,000-$500,000
- TOok 1-2 years to complete
By the end of 2006, Walmart expected to have ___ to ___ percent of its total wild-caught fish certified under the MSC
30% to 40%
Electronics
- TV’s, DVD players, telephones, musical instruments, digital audio products, computers, monitors, printers + small appliances
- Had 25 domestic electronics buyers, while Sam’s had another 15
- Second highest market share just behind Best Buy
Six key areas of focus for the electronics (pg13)
1) Materials Innovation
2) E-waste
3) Legislation
4) Green engineering
5) Metrics
6) Training and education
What were the hazardous substances in electronics?
Lead
Cadmium
Mercury
One of the first quick wins in the electronics network was related to the issue of eliminating ___________ from production
Hazardous chemicals
RoHS
Restriction on hazardous substances
By July 2006, when the European mandate took place for RoHS-compliant products, Walmart began to do the same in the ___
USA
E-Waste
- Tried a box program for $15 where they recycle your items, no one really did this
- Did a electronic recycling day across the country and collected over 70 tons of electronics in 5 days in Sept 2006
Electronic Legislation
- As of 2006, the US had no federal electronics regulation
- People such as HP argued that government control of recycling and collection significantly increased costs
Electronic Legislation
- As of 2006, the US had no federal electronics regulation
- People such as HP argued that government control of recycling and collection significantly increased costs
Sam’s Club first organic product
Organic cotton yoga outfits in Spring 2004
Conventional cotton crops received more than ___ percent of all chemical insecticides used and more than ___ percent of chemical pesticides in agriculture
25
10
Organic Cotton
-Became a priority for walmart in innovation
GOTS
Global Textile Standard (GOTS)
To meet organic standards, a farm needed to remain free of non-organic pesticides or similar materials for a period of ___ years prior to the harvest
3
In 2006, walmart became the world largest purchaser of ________
Organic cotton
Four different job categories for the textiles network (pg 19)
1) Merchandising
2) Product Development
3) Technical Services and Sourcing
4) Planning and Execution
Walmart needed new ______ to help the company decide how many and which of these green products to offer, which conventional products should be retired, and how to price the related green and conventional products
Metrics
Two primary problems with communicating other products’ sustainability-related attributes
1) Had to be careful about promoting the performance of green products in such a way that conventional alternatives would appear undesirable (ex: MSC certified vs non-certified fish)
2) Walmart often did not have enough reliable information to definitively explain or defend a products environmental and health benefits to customers
In October 2006, the chemicals intensive products network found ___ chemicals for which it would encourage suppliers to seek more sustainable substitutes
3
Exhibit 1: Directional results from Walmart’s environmental impact assessment
Food 50%
Non-Food merchandise 42%
