WalMart Ethical Standards
-
Upload
dark-knights -
Category
Documents
-
view
220 -
download
0
Transcript of WalMart Ethical Standards
-
8/14/2019 WalMart Ethical Standards
1/56
Chris McCannCountry Manager, UKWal-Mart Ethical Standards
Wal-Mart Stores, Inc.
February 2008
CIES Food Safety Conference
-
8/14/2019 WalMart Ethical Standards
2/56
Table of Contents
Horizon Scanning
Implications
Whose Problem?
Wal-Mart Overview
Case Study
-
8/14/2019 WalMart Ethical Standards
3/56
Wal-Mart Overview
More than 1.9 million associates located around the world
More than 176 million store customers serviced each week
Wal-Mart U.S. sales of $226 billion**
Wal-Mart International sales of $77 billion**
Sams Club sales of $42 billion**
*From The Journal of Commerce, May 29, 2006**Numbers as of fiscal year 2007 (Feb. 1, 2006-Jan.31, 2007)
-
8/14/2019 WalMart Ethical Standards
4/56
Canada298 Units
U.S.
4,128 Units
Mexico1020 Units
Puerto Rico54 Units
Central America
456 UnitsBrazil
313 Units
Argentina21 Units
UK352 Units
Japan394 Units
China101 Units,102 TrustMart Units
4,128 U.S. Units3,111 International Units
7,239 Worldwide Units
1.9 Million Associates
23 offices sourcing from 70 countries
Units as of 1/08
-
8/14/2019 WalMart Ethical Standards
5/56
ASDALIVING
minibompreco
MAGAZINE
-
8/14/2019 WalMart Ethical Standards
6/56
Horizon scanning
-
8/14/2019 WalMart Ethical Standards
7/56
Rapid change is, today, a way of life
"It is not necessary to change. Survival is not mandatory."
W. Edwards DemingStatistician & Author1900 1993
-
8/14/2019 WalMart Ethical Standards
8/56
Human activities are now adding 7 billion metric tons of carbon
into the atmosphere each year
-
8/14/2019 WalMart Ethical Standards
9/56
Diseases such as malaria are predicted to spread as the worldgrows warmer
-
8/14/2019 WalMart Ethical Standards
10/56
Worldwide energy consumption is projected to grow by 58% by 2025
-
8/14/2019 WalMart Ethical Standards
11/56
By 2025, the worldwide demand for fuel is projected to increase by30%, and that for electricity by 265%
-
8/14/2019 WalMart Ethical Standards
12/56
International Energy Outlook to 2025
China and India alone account for 37 percent of the worldincrease in energy use over the period.
China and India account for 31 percent of the world increase inoil use between 2003 and 2025; 71 percent of the increase incoal use
China and India combined account for 45 percent of the worldincrease in carbon dioxide emissions between 2003 and 2025.
-
8/14/2019 WalMart Ethical Standards
13/56
Scientists estimate sea-levels will rise 19 inches by 2100, though itcould rise as much as 37 inches
-
8/14/2019 WalMart Ethical Standards
14/56
The current pace of sea-level rise is three times the historical rate,and appears to be accelerating.
-
8/14/2019 WalMart Ethical Standards
15/56
After 2010, key aquifers in China, India , West Asia and North Africa
will begin to fail
-
8/14/2019 WalMart Ethical Standards
16/56
Rapid population growth and urbanization in developingcountries will increase water consumption at least 50% in the
next 20 years
-
8/14/2019 WalMart Ethical Standards
17/56
By 2025 water scarcity will cause annual global losses of 350million metric tons of food production slightly more than the
entire U.S. grain crop
-
8/14/2019 WalMart Ethical Standards
18/56
Unless we change polices and priorities, in twenty years, there wontbe enough water for cities, the environment, or growing food
-
8/14/2019 WalMart Ethical Standards
19/56
Implications
-
8/14/2019 WalMart Ethical Standards
20/56
4.8 billion people live in the developing world3 billion live on less than $2/day
-
8/14/2019 WalMart Ethical Standards
21/56
Approximately 1.2 billion people suffer from hunger. Over 9 million
people die worldwide each year because of hunger andmalnutrition. 5 million are children
-
8/14/2019 WalMart Ethical Standards
22/56
The direct medical cost of hunger and malnutrition is estimated at $30billion each year
-
8/14/2019 WalMart Ethical Standards
23/56
Declines in food supply could cause prices to skyrocket, whichwill increase the malnutrition rate, since many poor people indeveloping countries already spend more than half their incomeon food
-
8/14/2019 WalMart Ethical Standards
24/56
Go With The Flow Global Migration
Changing flows
-
8/14/2019 WalMart Ethical Standards
25/56
Mega Cities & Milestones
Tokyo
Mexico City
Sao PauloSeoul
Lagos Growth Shanghai
-
8/14/2019 WalMart Ethical Standards
26/56
Mega Cities & Milestones
Living in poverty Increasing health concerns
-
8/14/2019 WalMart Ethical Standards
27/56
The Perfect Storm
Increasing demand Decreasing E&P, export, reserves Escalating prices
-
8/14/2019 WalMart Ethical Standards
28/56
The Perfect Storm
Fuel versus food Rising prices
-
8/14/2019 WalMart Ethical Standards
29/56
The Perfect Storm Food Insecurity
-
8/14/2019 WalMart Ethical Standards
30/56
Arent these problems forGovernment to deal with?
-
8/14/2019 WalMart Ethical Standards
31/56
The Media Frenzy
-
8/14/2019 WalMart Ethical Standards
32/56
Consumers are concerned
0 20 40 60 80 100
Recycled
Supported local shops / suppliers
Recommended a company on basis ofcompany's responsible reputation
Avoided product / service on basis of
company's reputation
Actively sought information on
company's reputation
Felt guilty about unethical purchase
Actively campaigned on environmental /
social issues
2004
1999
Source: The Ethical Consumer Report 2005, The Cooperative BankBase: 1000 who have undertaken the activity at least once in the year
-
8/14/2019 WalMart Ethical Standards
33/56
License To Trade/ Freedom To Grow
An 80-hour week for 5p an hour:the real price of high-streetfashion
R t ti / i l i k
-
8/14/2019 WalMart Ethical Standards
34/56
Reputation/ commercial risks
Public opinion could turn should corporatesfail to live up to expectations
Future fossil fuel reserves are likely to involvehigher environmental costs
Supply chains in developing economiesincreasingly employ dirty sources of energy
Possibility of legislative punishment for failureto comply with existing/ emerging legislation
-
8/14/2019 WalMart Ethical Standards
35/56
-
8/14/2019 WalMart Ethical Standards
36/56
An appropriate response-The beginning
-
8/14/2019 WalMart Ethical Standards
37/56
-
8/14/2019 WalMart Ethical Standards
38/56
To be supplied 100%
by renewable energy
Existing stores 20%more efficient in 7years
New stores 30%
more efficient in 4years
Fleet 25% moreefficient in 3 years,50% in 10 years
To create zero waste
25% reduction insolid waste in 3years
All private brand
packaging improvedin 2 years (rightsized, reusable
materials)
To sell products that
sustain our resources
& environment
20% supply basealigned in 3 years
Preference given to
aligned suppliers in 2years
Wal*Mart Corporate Sustainability Goals
2
-
8/14/2019 WalMart Ethical Standards
39/56
Asda Sustainability Objectives
Send zero waste to landfill by 2010
New stores consume 30% less energy by end 2009
Existing stores consumer 20% less energy by end 2009
Fleet transport reduces CO2 emissions by 40% by end 2009
Reduce carrier bags environmental impact by 25% by end 2008
Reduce food packaging by weight by 25% by end 2008
100% sustainable fish by end 2010
ASDA brand products contain sustainable palm oil by end 2008
End sale of filament light bulbs by end 2010
-
8/14/2019 WalMart Ethical Standards
40/56
And results so farin 2007
65% of our waste is recycled, reused or composted
140,000 tonnes of cardboard
5,500 tonnes of plastic
8.9million p/a saved in landfill tax from recycling of cardboard
and plastic
12.3million p/a saved in energy consumption
6.1million saved in transport
Winner of Multiple Environmental Retailer of the Year at 2007
Retail Industry Awards
Recycled from the backof our stores
-
8/14/2019 WalMart Ethical Standards
41/56
I' d be prepared to pay a little more for products and services from acompany if I knew it did a lot for the wider society and community
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
All 16-24 25-34 35-44 45-54 55-64 65+
Tend to agreeAgree strongly
Consumer perceptions are changing
Source: 'Changing Lives', nVisionBase: 1200 adults 16+, UK, 2006
-
8/14/2019 WalMart Ethical Standards
42/56
SUSTAINABLE NON-FOOD PRODUCTS
S l h i l b d d
-
8/14/2019 WalMart Ethical Standards
43/56
Supply chain labour standards-
Team of 200+ auditors
16,700 audits of 8,873 factories in 200626% of all audits unannounced
5,000 suppliers trained in 2006
Industry Collaboration
MFA ForumBusiness for Social Responsibility
Beyond MonitoringGlobal Social Compliance Programetc
-
8/14/2019 WalMart Ethical Standards
44/56
ChangeManagementConvergenceCollaboration
Supplier
Development
Stakeholder
Engagement
International
Giving
Ethical Standards
Education andTraining
Sustainability
Supply chain labour standards- Beyond Auditing
-
8/14/2019 WalMart Ethical Standards
45/56
International Giving
The Asia Foundation A vocational scholarship program for migrant women
factory workers in the Guangdong Province
Hope Worldwide India Vocational and primary education centers in areas concentrated with factories
Mobility International USA (MIUSA) Leadership development and empowerment of people with disabilities in Central America
CIMCAW A capacity building program for garment workers and manufacturers in Central America
Hope Worldwide Kenya Vocational and primary education centers in areas concentrated with factories
and an HIV/AIDS program
Apparel Lesotho Alliance to Fight AIDS
An HIV/AIDS prevention program for the apparel workforce in Lesotho
Photo courtesy of The Asia Foundation
-
8/14/2019 WalMart Ethical Standards
46/56
Case Study-An argument for a
more strategic approach
-
8/14/2019 WalMart Ethical Standards
47/56
Mid 20th Century UK Farming Strategy
Post WWII, driven by the desire for Food Security, shaped by:
Importance of food in households budgets in a potentiallyunstable framework for international trade
Importance of agriculture as a sector of the economy,particularly in depressed areas
Agricultures contribution to a trade balance constrained byfixed exchange rates
Source:Defra Farming and Foods Contribution to Sustainable Development: Economic & StatisticalAnalysis 2002
Late 20th Century UK Farming Strategy
-
8/14/2019 WalMart Ethical Standards
48/56
Late 20th Century UK Farming Strategy
Driven by:Food security best served by improved trading relations vs.
self-sufficiencyInternational/ domestic push to open markets, liberalise trade
& abolish subsidies
Recognition of decline of agricultures role in rural economyRecognition of importance of countryside environment to
consumerSource:Defra Farming & Foods Contribution to Sustainable Development- Econ. & Statistical Analysis
2002. Defra The Strategy for Farming & Food- Facing the Future 2002
Govt role fundamentally changes:Reward farmers for public benefits (landscape, access to
countryside)
Take balanced approach to regulationPromote benchmarking & good practice
Source:Defra Sustainable Farming and Food Strategy Forward Look July 2006
Current Position of UK Farming Industry
-
8/14/2019 WalMart Ethical Standards
49/56
g y
Declining farm incomesDeclining labour forceDeclining importance of agricultural labour in UK workforceDeclining importance of agriculture in UK economy
Declining numbers of farm holdingsImprovements in general levels of productivity
Source: Defra Study of long-term trends affecting the farming industry EFFP 2005
But, decline in productivity against EU farm holdingsDeclining levels of self-sufficiency (from previous levels of 70%)Source: Defra Farming and Foods Contribution to Sustainable Development: Current Situation 2002
And CAP reform/ WTO changes will exacerbate this situationSource: Defra Study of long-term trends affecting the farming industry EFFP 2005
Defra Agricultural Futures and Implications for Environment: Defra ISO209
However
-
8/14/2019 WalMart Ethical Standards
50/56
CAP reform and UK Farming Strategy based on assumptions, including: ii) Extensive distribution networks i) Relative stability in Europe (no major wars in 50 years) iii) Relatively cheap costs of movement
While Ceteris Paribus ( All things being equal) reform and strategy islogical
Current and growing externalities have potential of introducing instability
Impact of externalities is exacerbated by downwards trend re. self-sufficiency, and exodus of knowledge/ experience from farming industry
Externalities include: Population growth Climate change
Energy security
Eg. Energy security
-
8/14/2019 WalMart Ethical Standards
51/56
20th Century emerged as worlds first oil based civilisation Estimated that approximately 10 calories of fossil fuels requiredto produce 1 calorie of food
Every step of modern food production is fossil fuel and
petrochemical powered (eg. pesticides from oil, fertilizers fromammonia, farming implements construction and powered by oil,etc)
In a global economy, with extended food chains, it is not unusualfor a food item to travel thousands of miles
President George W. Bush, May 2001What people need to hear loud and clear is were running out ofenergy in America
Energy security contd.
-
8/14/2019 WalMart Ethical Standards
52/56
The most significant difference between now and a decade ago is theextraordinarily rapid erosion of spare capacities at critical segments ofenergy chains. Today, shortfalls appear to be endemic. Among the mostextraordinary of these losses of spare capacity is in the oil arenaTheworld is precariously close to utilising all of its available global oilproduction capacity, raising chances of an oil crisis with more substantialconsequences than seen in 3 decades
Source: Strategic Energy Policy Changes for the 21st Century US Council on Foreign Relations &Baker Institute for Public Policy April 2001
Oil production currently in decline in 33 of the 48 largest oil producing countries
Without timely intervention, world supply/ demand balance will beachieved through massive demand destruction (shortages)The
problems associated with world oil production peaking will not betemporaryThe challenge of oil peaking deserves immediate, seriousattentionthe world has never faced a problem like this
Source: US Department of Energy, March 2005
Energy availability
-
8/14/2019 WalMart Ethical Standards
53/56
0
10
20
30
40
50
60
70
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
$ per barrel oil
Spot the obvious mistake
-
8/14/2019 WalMart Ethical Standards
54/56
Of the world's 100 largest economic entities,42 are now corporations, not countries
-Center for Strategic andInternational Studies, 2004
While future proofing is difficult at best
-
8/14/2019 WalMart Ethical Standards
55/56
While future proofing is difficult at best
The challenges posed by climate change, population growth andresource depletion clearly move Sustainability from the categories of
consumer niche interest and brand protection
Indeed, Sustainability is rapidly becoming a strategic issue for globalretailers and food manufacturers
Question: To what extent will business respond to these issues? Andto what extent will business engage in collaboration with otherStakeholders (govt, retail, manufacturing etc.) to address thesecommon challenges?
-
8/14/2019 WalMart Ethical Standards
56/56