Sustainability and Business Ethics at Wal Mart
The discussion of the future of Wal-Mart’s sustainability initiative should inevitably begin with the question “What is the end goal?” Are programs like the Sustainability Index a complex marketing tool to gain competitive advantage? Or do they reflect a sincere commitment to maximizing the social good, even at the expense of profits? In this essay, I will assume a convenient convergence that good corporate social responsibility and business profits are highly positively correlated. Thus, regardless which point of view one embraces, Wal-Mart’s aim should be true effectiveness in the sustainability realm.
From that perspective, the overarching goal in front of Wal-Mart for the next five years should be the repositioning of its global brand to become synonymous with sustainability. To reach this objective, Wal-Mart should institute specific related sub-goals in three main categories: (1) product line, (2) internal operations and (3) partner relationships.
In terms of products, Wal-Mart should establish an annually growing target ratio between sustainable and other products carried by the chain. The long-term benchmarks should be both internal (e.g., 50% driving towards 100%) and external (e.g., “largest global retailer of sustainable products”). While such an initiative will gradually shape customer perceptions, it can easily be rendered ineffective by global critics if not matched with credible commitment in operations and across the value chain. Therefore, Wal-Mart’s second sub-goal should be to demonstrate its internal functions sustainability. This goal can be benchmarked by comparisons with competitors on traditional sustainability indicators, e.g., size of carbon footprint, percent recyclable materials used. Finally, Wal-Mart’s third sub-goal should be to drive sustainability across the value chain with suppliers. To measure progress, the company should establish a measure linking total value of purchases from 100% sustainable suppliers to sales.
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From that perspective, the overarching goal in front of Wal-Mart for the next five years should be the repositioning of its global brand to become synonymous with sustainability. To reach this objective, Wal-Mart should institute specific related sub-goals in three main categories: (1) product line, (2) internal operations and (3) partner relationships.
In terms of products, Wal-Mart should establish an annually growing target ratio between sustainable and other products carried by the chain. The long-term benchmarks should be both internal (e.g., 50% driving towards 100%) and external (e.g., “largest global retailer of sustainable products”). While such an initiative will gradually shape customer perceptions, it can easily be rendered ineffective by global critics if not matched with credible commitment in operations and across the value chain. Therefore, Wal-Mart’s second sub-goal should be to demonstrate its internal functions sustainability. This goal can be benchmarked by comparisons with competitors on traditional sustainability indicators, e.g., size of carbon footprint, percent recyclable materials used. Finally, Wal-Mart’s third sub-goal should be to drive sustainability across the value chain with suppliers. To measure progress, the company should establish a measure linking total value of purchases from 100% sustainable suppliers to sales.
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