Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores from the United States. The company’s corporate purpose is to save people money and help them live better. It provides convenient access to high-quality, affordable food and other essential products and services to millions of people each week. In doing so, the company aims to create shared value for its stakeholders.
Walmart prioritises ESG issues that offer the greatest potential to create shared value. They are issues that rank high in terms of relevance to its business and stakeholders as well as Walmart’s ability to make a difference.
1. Climate Change Mitigation by Walmart
Climate change is one of the greatest challenges of our time. Walmart is focused on reducing emissions in its operations, engaging suppliers to reduce emissions in supply chains, strengthening the resilience of its business and using its voice to advocate for collective action.
1.1 Project Gigaton
Because most emissions in the retail sector lie in product supply chains rather than in stores and distribution centers (such indirect emissions are referred to as Scope 3 emissions), in 2017, Walmart started Project Gigaton — our initiative to engage suppliers in climate action along with NGOs and other stakeholders.
Project Gigaton aims to avoid one billion metric tons (a gigaton) of greenhouse gases from the global value chain by 2030 by inviting suppliers to set targets and take action in six areas: energy use, sustainable agriculture, waste, deforestation, packaging and product use. The Project Gigaton platform includes a variety of resources, including calculators to help set and report on goals within the initiative, workshops on best practices and links to additional resources and initiatives (for example, packaging playbook and supplier summit, food waste calculator, Higg Index adoption and fertilizer optimization)
Several organizations have supported the development of the Project Gigaton platform and related resources, including the World Wildlife Fund (WWF), the Environmental Defense Fund (EDF), Conservation International, The Nature Conservancy, the Sustainable Packaging Coalition, the World Resources Institute (WRI) and CDP. They help us continually improve the methodologies and review supplier submissions.
1.2 Improving Resilience of smallholder farms
Walmart and the Walmart Foundation invest in philanthropic initiatives to help improve farmer livelihoods and enhance the resilience of small farms in Mexico and India. For example, in India where smallholder farmers represent the backbone of the country’s economy, the Walmart Foundation, working beyond Walmart’s supply chain, made a commitment in 2018 to invest $25 million over five years to strengthen farmer producer organizations and farm yields. Through FY2020, the company has invested over $13 million in grants to organizations working with more than 96,000 smallholders, approximately 34,500 of them women. In August 2019, the company held a summit in New Delhi, India, of grantees and other leading smallholder development experts to share experiences and help advance the field.
2. Waste Management
Walmart aims to break the link between consumption and waste. In 2005, the company set an aspirational goal to achieve zero waste in its own operations. It aims to achieve that goal by 2025 in four countries: Canada, Japan, the U.K. and the U.S. In 2019, the company diverted 80% of its unsold products, packaging and other operational materials from landfills and incineration globally.
2.1 Plastic Waste
Throughout its operations, Walmart aims to eliminate plastic waste by reducing, reusing and recycling plastic needed to run the business. In order to achieve that the company contracts with vendors to collect and recycle rigid plastics and plastic film, produced from its operations and returned from customers. During 2019, it recycled more than an estimated 330 million pounds of plastic film and rigid plastics globally.
To help reduce plastic waste in the U.S., the Walmart Foundation makes investments to support materials innovation, recycling collection and sorting infrastructure, and consumer education. For example, in FY2020, the Walmart Foundation provided a grant to the Foundation for Chemistry Research and Initiatives in support of the Materials Recovery for the Future program, a pilot designed to improve recovery and recyclability of flexible plastic films.
The Walmart Foundation also supported The Recycling Partnership’s 50 Cities Leadership Summit, which brought together leaders and representatives from 50 of the largest cities in the continental U.S. to support recycling infrastructure and education.
2.2 Food Waste
Walmart is inspired by the U.N. Sustainable Development Goal 12.3 to halve per capita global food waste at the retail and consumer level and reduce food losses along production and supply chains by 2030. Thus its initiatives for reducing food waste are designed to span the food supply chain, including implementing best practices in its retail and distribution operations, working with suppliers upstream and empowering consumers downstream.
The primary way in which the company avoids food waste in is by increasing the sell-through of food products. Walmart has strengthened its forecasting and ordering tools to improve inventory flow, adjusted store fixtures to increase product turnover, enhanced distribution centres and offered discounts on food that is close to its expiration date. These efforts have produced positive results: for Walmart U.S., the company wasted 57 million fewer food units in its fresh departments in FY2020 than it did the previous fiscal year, and sold more than 300 million food units through food discount programs.
When food goes unpurchased, Walmart works to maximize its use by getting it to people and places that need it. In FY2020, the company donated more than 585 million pounds of food in the U.S. alone. In addition to donating food to food banks and other charities, Walmart and the Walmart Foundation have donated funds to purchase equipment to increase the capacity of the charitable meal system to transport and deliver fresh food.
Finally, if food is no longer edible, it works to convert it to animal feed, compost or energy. The Walmart stores in Argentina, Canada, Chile, Japan, South Africa, the United Kingdom and the United States, for example, send a portion of their food waste to anaerobic digestion plants, which break down the food into gases that can be used as fuel and fertilizers.
Walmart and the Walmart Foundation have made significant contributions over the past ten years to help strengthen the charitable meal sector in North America. Since 2005, Walmart and the Walmart Foundation have contributed more than 4.5 billion pounds in food donations and over $120 million in grants to support Feeding America, a nationwide network of 200 food banks in the U.S. Since it launched “Fight Hunger. Spark Change.” campaign. In 2014, Walmart, Sam’s Club, participating suppliers and customers have cumulatively raised $100 million for Feeding America and its network of local food banks.
Walmart and the Walmart Foundation also support organizations that help expand access to charitable meals, support development of meal programs in schools and community sites, support access to benefits, and provide nutrition education. Since 2016, the Walmart Foundation has provided more than $18 million in funding to reduce food waste and strengthen food banks in Canada.
3. Ecosystem Initiatives by Walmart
3.1 Addressing deforestation
Healthy forests sustain biodiversity, support livelihoods and play an important role in mitigating climate change. Focusing on priority regions, Walmart is working with suppliers on certification, monitoring, supporting sustainable sourcing regions, promoting collaborative action and advocating for effective policy. The company complements its business initiatives with philanthropic investments in transparency tools and restoration of degraded land.
3.2 Supporting on-the-ground regenerative agriculture
To improve practices, Walmart support place-based projects. Walmart is a founding member of the Midwest Row Crop Collaborative (MRCC), which over the past four years has facilitated the implementation of over a quarter-million acres of sustainable agriculture practices in the Upper Mississippi River Basin and provided data, financial incentives, and education on soil health, water quality and climate change mitigation to thousands of farmers and consumers.
3.3 Promoting ocean health
Walmart has been working to address ocean health since 2006 when it announced a goal to source wild-caught fish more sustainably. The company has since expanded its work on sustainable seafood to include farmed, fresh and frozen seafood as well as canned tuna. These efforts are complemented with advocacy, collective action and philanthropy. As an example of the latter, the Walmart Foundation provided a grant to Global Fishing Watch, an organization which promotes ocean sustainability through greater transparency using cutting-edge technology to visualize, track and share data about global fishing activity in near-real-time and for free.
3.4 Encouraging suppliers to adopt best practices
To foster conservation and restoration of natural ecosystems, Walmart is encouraging suppliers to engage in the Sustainable Agriculture and Deforestation pillars of Project Gigaton. The company asks suppliers to adopt best practices in areas such as manure management, enteric emissions, feed inputs and other activities in animal agriculture, along with fertilizer optimization in crop production. The company has estimated that the Agriculture pillar could contribute as much as 15% toward its goal to avoid 1 gigaton of GHG emissions by 2030 while at the same time providing benefits to nature, such as improved land use (higher yields and reduced food waste), enhanced soil health and reduced nutrient runoff into waterways.
To share best practices and innovations among our suppliers, it convenes gatherings and working sessions such as our annual Sustainability Milestone meetings. These events bring together suppliers and NGO leaders to foster collaboration and innovative solutions to complex challenges such as deforestation and ocean acidification.
The company also use tools such as The Sustainability Insight System (THESIS) Index to measure our suppliers’ progress against key best practice environmental and social performance indicators.
4. Walmart’s initiatives to address social issues in the supply chain
4.1 Efforts to help decrease the risk of forced labour
FishWise: In FY2020, the Walmart Foundation provided support to FishWise to expand its RISE (Roadmap for Improving Seafood Ethics) platform, which details steps companies can take to improve evaluation and monitoring of labour practices in seafood supply chains.
International Justice Mission: In FY2020, the Walmart Foundation made its third grant to International Justice Mission (IJM), which works alongside government agencies in Thailand, Cambodia and Myanmar to combat human trafficking networks in the Thai fishing industry.
International Organization for Migration: Walmart engaged this group to better understand the scope and scale of migrant labour in Walmart’s supply chains in Thailand and Malaysia. To help build the leadership capacity of suppliers’ facilities and their recruiters on ethical recruitment and migrant worker protection, the project delivered training to increase awareness of responsible recruitment practices and effective actions to improve the recruitment process of migrant workers and decrease the risk of workers exploitation. The International Organization for Migration has training facilities in Thailand and Malaysia on managing the risks of migrant worker exploitation and trained recruiters on ethical recruitment in Indonesia, Nepal, Malaysia, Cambodia, Thailand, Bangladesh and Myanmar.
Leadership Group for Responsible Recruitment (LGRR): Walmart has been a member of this company-led collective advocacy platform since 2016. LGRR collaborates with other businesses, the recruitment industry and governments to create demand for responsible recruitment, increase the supply of ethically sourced labour and improve protections for migrant workers through effective regulation.
Responsible Labor Initiative: Walmart joined the Responsible Business Alliance’s Responsible Labor Initiative steering committee to bring together stakeholders from multiple industries that share recruitment supply chains to promote due diligence in labour practices and ensure that the rights of vulnerable workers are upheld. Walmart is also an active member of the Responsible Labor Initiative working group.
Seafood Task Force: Walmart has been a member of this international, multi-stakeholder initiative to address forced labour and illegal fishing in the Thai seafood industry since 2015. It has been a member of the organization’s board since 2016 and is a member of several of its working subgroups. The Seafood Task Force has developed a Code of Conduct; established a system to track products across the supply chain; worked with government and industry stakeholders to improve regulation and codes of conduct; and championed fishery improvement projects. In FY2019, the Seafood Task Force developed the Vessel Auditable Standards, which the tuna subgroup used as a tool to raise awareness with fishing vessel representatives in selected locations in FY2020.
4.2 Ensuring Worker safety
Walmart expects its suppliers to provide a safe working environment. To help address systemic issues affecting worker conditions more broadly, it collaborates with industry, NGOs, worker organizations and local governments.
One program the company supports is the Life and Building Safety (LABS) initiative. Walmart is a founding member and is on the steering committee of LABS, in which European and American brands come together to set international best practices around factory safety in the apparel and footwear industries. LABS works with engineering companies to develop country-specific standards for safety in factories, commissions audits around fire, electrical and structural risks, asks factories to develop supervised Corrective Action Plans to remediate the problems and then assesses plan implementation. LABS also makes available training for factory workers on safety, how to maintain fire prevention systems and how to use the LABS helpline to report building safety concerns. The initiative is currently active in India and Vietnam.
In addition, in 2013, Walmart became a founding member of the Alliance for Bangladesh Worker Safety, which concluded its mission at the end of 2018 after training nearly 1.6 million factory employees on basic safety and providing more than 1.5 million workers in 1,000 factories with access to a helpline to anonymously report safety or other job-related concerns. Furthermore, 93% of total remediation items across Alliance -affiliated factories are complete — including 90% of items most critical to life safety. Now that the Alliance for Bangladesh Worker Safety is concluded, the company is continuing its efforts in the region. It monitors safety in its suppliers’ apparel facilities in Bangladesh, and we are working with other brands and retailers through Nirapon, an organization focused on monitoring ongoing safety compliance and maintaining the progress made on safety in the industry. Learn more about our work on remediation, capacity building and support for the workers of Bangladesh on our Responsible Sourcing site.
4.3 Promoting Gender equity
Walmart has worked to meaningfully advance gender equity in factories, farms and women-owned businesses in industry supply chains over the past decade. Much of our work began in 2011, when Walmart and the Walmart Foundation undertook a five-year Women’s Economic Empowerment (WEE) initiative, which culminated in the successful completion of a commitment from Walmart to source $20 billion from women-owned businesses for its U.S. business and from the Walmart Foundation to support training for 1 million women on farms, in factories and in retail.
5. Walmart’s Support to Truckers Against Trafficking
Walmart supports the nonprofit Truckers Against Trafficking, which trains transportation professionals to recognize and report suspected human trafficking incidents. In 2019, Walmart incorporated the Truckers Against Trafficking training into both the reoccurring driver training program and the new-driver onboarding process for our private fleet drivers.
Conclusion
Walmart takes a shared value, whole-system approach to ESG. The company’s ESG initiatives aim to go beyond mitigating business risk. They aim to create value for stakeholders by addressing societal issues through business.
Disclaimer: This report is largely comprised of extracts from the Walmart ESG Report 2020.
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