Wal-Mart pushes system for sustainability standards

by Keith Nunes
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BENTONVILLE, ARK. — People listen when Lee Scott speaks. In a speech before Wal-Mart Stores Inc.’s U.S. store managers, the president and chief executive officer of the retailer outlined how the company would continue to demonstrate leadership and work for change on major issues important to Wal-Mart’s customers, such as energy efficiency and ethical sourcing. Mr. Scott also communicated to the retailer’s numerous suppliers he has heard their concerns regarding the breadth and complexity of Wal-Mart’s initiative as well as those of other major retailers.

"Many of our supplier factories have multiple customers, including multinational customers and local retailers," Mr. Scott said. "Each retailer often imposes different standards and requires separate inspections. This often results in duplication of efforts without a real improvement in performance.

"In the next three years we would like to build a very different system. We believe that there should be one framework of social and environmental standards for all major global retailers. And there should be one third-party auditing system for everyone. This will ensure improvement will occur across the board on a level playing field."

Wal-Mart is working with CIES, a global retail and consumer goods network, as well as several other global retailers to develop the system.

"The effort is now focused on social standards, and I believe it should be expanded to environmental standards as well," Mr. Scott said. "Today, I call on all major global retailers to join this effort."

Mr. Scott went on to say Wal-Mart will continue to focus on requiring suppliers to meet specific environmental, social and quality standards; certifying and ensuring supplier compliance with social and environmental standards; and favoring, and in some cases even paying more to suppliers that meet the company’s standards and share its commitment to quality and sustainability.

To those companies that may not share Wal-Mart’s vision, Mr. Scott said: "We will only work with suppliers who maintain our standards throughout our relationship. So we will make certification and compliance part of our supplier agreements and ask for suppliers to report to us regularly. Any supplier that fails to keep its word will be required to take prompt and serious action. If a supplier fails to improve and fix the problem, we will stop working with that supplier."

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