Walmart Announces Global Responsible Sourcing Initiative at China Summit
Company sets new goals and greater expectations for environmental and social compliance, transparency and accountability
Beijing, China – Oct. 22, 2008 – Today, Wal-Mart Stores, Inc. (NYSE: WMT) took the next step in its sustainability journey by hosting an unprecedented gathering of more than 1,000 leading suppliers, Chinese officials and NGOs in Beijing, China. The company outlined a series of aggressive goals and expectations to build a more environmentally and socially responsible global supply chain.
"Sustainability is about building a better business. We think it is essential to our future success as a retailer -- and to meeting the expectations of customers," said Lee Scott, president and CEO of Walmart "Maintaining the trust of our customers -- today and in the future -- is tied hand-in-hand with improving the quality of our supplier factories and their products."
The company will focus on areas aimed at meeting or exceeding social and environmental standards, driving innovation and efficiency and building stronger partnerships with suppliers, government and NGOs.
Scott continued, "I firmly believe that a company that cheats on overtime and on the age of its labor, that dumps its scraps and chemicals in our rivers, that does not pay its taxes or honor its contracts -- will ultimately cheat on the quality of its products. And cheating on the quality of products is the same as cheating on customers. We will not tolerate that at Walmart."
Addressing suppliers in attendance, Mike Duke, vice chairman for Walmart's international division outlined a number of requirements and expectations for suppliers who want to do business with Walmart. "Achieving the goals that we lay out today is going to require a common commitment. It’s going to take even stronger and deeper relationships. And it is going to take all of us working together." said Duke. "We are expecting more of ourselves at Walmart, and we will also expect more of our suppliers."
At the Summit, Walmart laid out a series of requirements for companies who want to do business with Walmart. These requirements include:
- Required demonstration of compliance with environmental laws and regulations-- China's desire for a cleaner environment is clear, and the laws on the books reflect that. Walmart is taking a number of steps to further strengthen and enforce supplier compliance with environmental and social standards, including the creation of a new supplier agreement that will require factories to certify compliance with laws and regulations where they operate as well as rigorous social and environmental standards. The agreement will be phased in beginning with suppliers in China in January 2009 and expanding to suppliers around the world by 2011.
- Partner with suppliers to improve energy efficiency and use fewer natural resources--Walmart will partner with suppliers to improve energy efficiency in the top 200 factories it sources from directly in China by 20 percent by 2012. The company will share information and best practices with all of the factories it sources from as well as its competitors.
- Higher standards of product safety and quality--Walmart aims to drive returns on defective merchandise virtually out of existence by 2012.
- Greater transparency and ownership--By 2009, Walmart will require all direct import suppliers plus all suppliers of private label and non-branded products to provide the name and location of every factory they use to make the products it sells. The company will also have all suppliers it buys from directly to source 95 percent of their production from factories that receive the highest ratings on environmental and social practices by 2012.
Walmart also announced a major effort to make Walmart China a leader in sustainability in China by committing to make its stores more sustainable. The company will design and open a new store prototype that uses 40 percent less energy and will reduce energy use at existing stores by 30 percent by 2010. In addition, during the next two years, Walmart China will aim to cut water use in all of its stores in half by investing in new hardware and systems and developing best practices that will help its associates and stores use water more efficiently.
The company also pledged to bring more environmentally sustainable products to its store shelves.
Outlining the steps Walmart will take to become the most environmentally responsible retailer in China, Walmart China President and CEO Ed Chan addressed the need for collaboration between Walmart, the company’s suppliers and the Chinese government. "Few challenges in our world today are more pressing than protecting the environment and, in China, Walmart has a unique opportunity to lead," said Chan. "With the world’s largest population, and a robust manufacturing industry, no market presents a greater opportunity for environmental sustainability to take hold than China."
On the environment, the Chinese government has set strong goals for sustainability and Walmart is aligned with those goals. Walmart and the Administrative Center for China's Agenda 21 of the Ministry of Science and Technology signed a Memorandum of Understanding that will serve as an example of a partnership that benefits both industry and government. Walmart China will also reach beyond its own operations to engage customers and suppliers and form partnerships with government and NGOs.
The Summit builds on Lee Scott’s "Company of the Future" speech to Walmart store managers in January, 2008. In the speech, Walmart pledged to make the company’s operations in China more sustainable and our build a more environmentally and socially responsible global supply.
NOTE: A replay of the China Summit can be viewed via Web cast at: http://www.walmartstores.com
About Wal-Mart Stores, Inc. (NYSE: WMT)
Walmart operates Walmart discount stores, supercenters, Neighborhood Markets and Sam’s Club locations in the United States. The Company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom and, through a joint venture, in India. The Company's common stock is listed on the New York Stock Exchange under the symbol WMT. More information about Walmart can be found by visiting www.walmartstores.com. Online merchandise sales are available at www.walmart.com and www.samsclub.com.