Walmart's improved social responsibility efforts begin with supply chain
Walmart notes several supply chain-focused efforts to improve its economic, social and environmental impact in its recently released 2018 Global Responsibility Report, revealing its commitment to meeting consumer expectations and eliminating abuses in the supply chain.
The retailer's commitment to corporate social responsibility (CSR) could become a key driver for the company's success. As the Sweetbridge Blockchain Alliance President Mac McGary told Supply Chain Dive, CSR starts in the supply chain.
And that's Walmart's approach — the company has invested $100 million in programs to help workers advance their careers in retail, and is funding the training for one million farmers at the supplier level. The company also is holding its seafood suppliers to a set of sustainability standards and is working to eliminate unethical labor practices at the supplier level.
Walmart's report states the company is collaborating with industry experts, NGOs, suppliers and the company's own research to address risks pertaining to social issues in the supply chain. The company also stated a commitment to addressing "major risks to the dignity of workers" within retail supply chains by 2025.
"The most successful businesses ... aim to strengthen the systems on which they rely, such as retail employment or food production," said Walmart Chief Sustainability Officer Kathleen McLaughlin in the report. "Why? Not only to build customer trust and maintain license to operate, but also to enhance supply security, manage evolution of cost structure, generate new revenue streams and attract talent. Strengthening societal systems is not only the responsible thing to do — it maximizes business value."
Besides supporting farmers at the supplier level, Walmart actively seeks to address problems including human trafficking and unfair labor practices within the supply chain.
One of the reasons why Walmart's CSR initiative may be successful is because of the company's top-down approach. As noted in the report, "Business ownership and accountability for ESG execution starts with the Walmart Board of Directors and leadership engagement, and is embedded throughout our business in the business planning and performance management cycle, our operating policies, organization roles and coordinating mechanisms, project governance, and systems and tools."
Walmart is not the only company to succeed in this way. McCormick & Co. completely overhauled its procurement department with a top-down initiative, which resulted in greater cost-savings and a streamlined supply chain.
But not only that, Walmart stated a commitment to meeting customer expectations regarding CSR in the report, citing it as a top priority, which shows Walmart knows CSR is important to consumers and is actively analyzing customer feedback and innovating to meet their requirements.
"We have listened to and are working to respond to our customers’ questions regarding topics such as country of origin, nutrition profile of foods, ingredients and responsible sourcing," the report said. "For many of our private label brands, for example, we have worked with our suppliers to help improve the nutrition profile by removing or reducing sodium, sugar and transfats."
Besides improving the bottom line and having a positive impact, engaging in CSR helps companies such as Walmart maintain brand image and reputation, which and also helps avoid bounce back faster from bad press. When Georgetown University students protested Nike for its unethical labor practices, for example, it took two years for the university and the sports apparel manufacturer to come to an agreement.
Nike's agreement involved third-party audits of its supplier factories, and while submitting to the audits helped rescue Nike's image somewhat, Walmart has preemptively taken many steps to prevent that kind of conflict and abuse.
Walmart's continued progress in its commitment to global prosperity makes the company more attractive, not only to consumers, but socially-conscious investors. These kinds of initiatives set Walmart apart from Amazon, which has received backlash from employees decrying difficult working conditions.
As Walmart grows, its continued dedication to CSR could be what propels the company ahead of other retailers still struggling to just streamline their online presence, distribution and inventory management practices.
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