Walmart Brazil Mobilizes Suppliers and Announces Sustainability Pact

Minister of Environment, Carlos Minc, takes part in the retailer’s event with 500 companies and NGOs. Amazon, packaging and productive chain are the main themes of the commitments

São Paulo, June 23, 2009 – In the search for more sustainable practices in the whole productive chain in Brazil, today, Walmart gives an important step towards hosting a pioneer event in the Country: the “Sustainability Pact”, gathering over 300 suppliers and 200 NGOs, as well as government authorities, partners and associates. On the occasion, the company enforced with its suppliers a number of commitments in relation to theme such as sustainable development in Amazon, reduction of packaging and development of more sustainable productive chains. “We want to be sustainability leaders in Brazil and we are increasingly committed to seeking solutions that will contribute to the future of the planet. This event shows how in line we are with the whole chain. We know that, in sustainability, the union is essential”, says Héctor Núñez, CEO of Walmart Brazil.

For the construction of such commitments, Walmart gathered, in two precious moments, called “Sustainability Dialogues”, representatives from civil society, government, suppliers and associates. The first “Dialogue” took place in May, in Brasília, and the theme was “Commitment with the Amazon”, gathering representatives from the Ministry of Environment, NGOs such as the Imazon Institute and ISA (Social and Environmental Institute) and from specialists.

The second event, which happened at the beginning of the month, in São Paulo, was about packaging and productive chains, having as lecturers and guests Ethos Institute, CETEA (Packaging Technology Center), and ABRE (Brazilian Packaging Association).

Both Dialogues served as grounds to the final commitments announced by Walmart Brazil. Namely:

PRODUCTIVE CHAINS AND PACKAGING REDUCTION:

1. Responsible Purchases

  • Reducing by 70% phosphate in laundry and kitchen detergents until 2013;
  • Offering laundry products, at least, 2 x more concentrated until 2012;
  • Offering at least one organic product per food category until 2012;
  • Stimulating sales of products with sustainability differential;
  • Supporting and encouraging the development of closed cycle products;
  • Walmart Brazil private label products should lead because of sustainability example.

2. Waste Reduction

  • Reducing packaging by 5% until 2013;
  • Implement Packaging Scorecard until 2009;
  • Reducing consumption of plastic bags by 50% until 2013.

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  • Timber Pact – Promoting financing, production, use, commercialization and consumption of forest timber and products with sustainable source certification only.
  • Soybean Pact – Establish restrictions for financing, production, use, distribution and consumption of soybeans (in natura or processed) sourced in illegal deforestation areas in Amazon.
  • Pact for Eradication of Slave Labor – Establish commercial restrictions to companies and/or people identified in their production chain that use degrading work conditions associated to practices that characterize slavery.
  • Livestock Pact – Not to take part of financing, use, distribution, commercialization and consumption of livestock product with having any illegality detected in its chain, above all deforestation and slave-like labor. Require from beef suppliers copies of Animal Transit Forms (GTA) attached to Invoices and independent audit plan and international acknowledgement that ensure that products marketed by Walmart do not derive from devastation areas in the Amazon.

Greenpeace Report - Walmart adjourned the acquisition from farms involved in the deforestation of Amazon, pursuant to report released by the Greenpeace and information provided by the Public Prosecutor in the State of Pará. The action is aimed at repudiating the practices accused and was implemented in the supermarket sphere, by means of the Brazilian Supermarket Association (ABRAS). For Walmart, it is inacceptable that suppliers use illegal practices in their productive processes or inputs from irregular productive chains.The decision is valid to all of its formats in the country: hypermarkets BIG, Hiper Bompreço and Walmart Supercenter, supermarkets Nacional, Mercadorama and Bompreço, wholesale business Maxxi, membership club SAM'S CLUB and neighborhood supermarket Todo Dia. The position includes notifying meat packing plants, suspending purchases from the farms accused by the Public Prosecutor in the State of Pará and require from meat packing plants the Guias de Trânsito Animal [Animal Transit Forms] attached to Invoices or electronic similar information. As additional measure, the implementation of an independent audit plan and international acknowledgement that ensure that the products they market do not derive from devastation areas in the Amazon.

Carrier Bags Campaign – During the “Sustainability Pact Walmart Brazil”, the Minister of Environment, Carlos Minc, one of the lecturers in the event, launched a national campaign to reduce the use of plastic bags, in partnership with Walmart. With the name “Saco é um Saco” [Bags are a ‘Pain’], the purpose to bring awareness to population on the conscious use of plastic bags.

The support of Walmart Brazil to the government campaign is in line with the company’s target to reduce by 50% the use of plastic carrier bags until 2013. In order to achieve such goal, the company launched, at the end last year, an unprecedented program in Brazilian retail market, which gives credit to customers for bags they do not use. The amount the supermarket would pay per bag (R$0.03) is returned as credit in the ticket of customers who do not use it and choose any reusable version.

In force in all stores in the Northeast and South (more than 260 units), the program has already removed from the environment millions of bags and granted over R$ 100 thousand in discounts to customers. Until the end of the year, the program will have national coverage with the inclusion of the Southeast region.

Moreover, the retailer incentives the use of reusable bags, offering one of the cheapest models in the market (R$2.50). Made of raw cotton and with capacity to carry 35 kg, the bag starts to gradually become part of consumers’ daily lives. Since launching, in May 2008, more than 2 million Walmart bags are already circulating in the whole Country.

Sustainability – With three major work focus – energy/constructions, residues and products – sustainability is part of Walmart Brazil business strategy. Apart from actions to reduce bags, the company is implementing a zero impact program in its stores and its global target is to generate zero residue in its operation worldwide. In relation energy, Walmart inaugurated its first ecoefficient store in December, in Rio de Janeiro and, since then, it has adopted this model as standard to all their hypermarkets. The second store was launched in São Paulo in April this year. The eco stores, as they are called, were conceived to reduce use of power by 40% and water by 25%. More than 60 sustainable initiative in have been implemented in each one of them, which range from use of rain water to solar energy, including use of recycled material in the entire visual communication, wall with Styrofoam plates and natural lightening. Even uniforms in these stores – as well as in all stores launched since last year – are more sustainable and made, in part from PET bottle fiber.

In relation to products found in the gondolas of the 348 Walmart Brazil stores, many already bring changes related to sustainability. In partnership with large suppliers, the retailer offers differentiated products to its customers. That is the case of Ariel Ecomax (Procter & Gamble) powder soap, which requires less water washing of clothes; in the Sustainable Banco Imobiliário game (Monopoly – by Estrela), of underwear made from bamboo fiber (Zorba) and toilet paper Neve Naturali (Kimberly Clark), which uses papers trims in the manufacturing process, among other products.

In the private label line, items had packaging reduced and change of material to reduce environmental impact. Products such as blankets 100% made from PET bottle fiber (about 150 bottles for each blanket), Ecoline telephone Ibratele, made from old computers shells (electronic garbage) and Top Max Soap (made from cooking oil collected in recycling stations of Maxxi Atacado Stores in the South), show that it is possible to reuse material that would be wasted in the environment.

Social – Also committed to the social wing of sustainability, Walmart Brazil supports and collaborates towards the improvement of life quality in the communities where it operates. In Recife, for instance, it has adopted an entire neighborhood with the commitment to increase the Human Development Index (HDI) in the region. The “Bombando Cidadania” project, in the neighborhood of Bomba do Hemetério, is one of the over 40 projects supported by the Walmart Institute in Brazil. All together, 4 thousand people benefit from them.

The Loja da Comunidade, a pioneer supermarket model with services to citizens in general, has been operating for 7 months with 3 units in the Northeast region. With services such as issuance of documents, professional tutoring, Internet café, medical assistance, among others, the format has already shown results and so far has helped nearly 70,000 people. Walmart expects to take the Loja da Comunidade to other regions within the country, prioritizing neighborhoods in need.

China – Worldwide, Walmart has incorporated sustainability to its business, with global environment impact reduction targets. Locally, each of the 15 countries in the company’s international area has specific targets, according to the needs of each society. In October last year, Walmart gathered over 1,000 suppliers in China, besides government representatives, to delineate joint targets, especially connected to social problems in that country. Among the agreements signed, there are the compulsory environment compliance (legal), improvement of energy efficiency and use of natural resources, increase of quality standards and more transparency regarding information on the factories.