The largest retailer and the world’s largest company by revenue (over $500 million in 2020) –that’s more than three times the revenue generated by the second retailer in line, the French company Carrefour SA. Worth over $328 billion in 2020, Walmart employs over 2.2 million workers in over 11,000 stores worldwide.
The first “Walmart Discount City” was founded by Sam Walton in 1962 in Rogers, Arkansas. With its headquarters still in Arkansas, Walmarts founding ethos was to bring big retail to small communities. It boosted from the beginning it’s “everyday low-price strategy” of supplying the customer with a high volume of goods but always at the lowest price.
The Walmart model is simple: provide the consumer with the lowest price by purchasing goods at high volumes so they can slash the prices of the products when they hit the shelves. And by having a never ending sea of warehouses around the world stocked full of a never ending supply of products, Walmart is able to purchase massive amounts of goods directly from the suppliers and keep up with the demand quicker in its worldwide stores. But does this business model come at cost to the environment? Naturally the environmental impact of the largest company on the planet, on the planet, is important. Let’s take a look at how Walmart stacks up with the Arbor values of Emission, Human Rights, and Business Ethics.
Emissions score: 3/5
Most of the emissions released by mega companies like Walmart, happen in the supply chain. Walmart, whose business heavily relies on the mass importation and transportation of goods, needs to lead the pack for environmental change by prioritizing the integration of environmental issues throughout their supply chain.
According to the CDP, a non-for-profit global disclosure system for many companies, cities, and states that helps manage their environmental impact:
“The private sector has huge potential to drive environmental actions. However, with supply chain emissions on average 5.5 times greater than operational emissions, it’s clear that to take meaningful action, companies must leverage their purchasing power and collaborate with their supply chains.”
Walmart was the only grocery and mega retailer to make the CDP’s 2019 “A list” and Supplier Engagement Leaderboard for Climate. In compliance with the GHG Protocol Corporate Accounting and Reporting measurement system, Walmart hopes to reduce its Scope 1 (direct emissions like fuel use from owned and controlled sources) and Scope 2 (indirect emissions from purchased sources like electricity, heat, cooling systems, and steam) by 18% by 2025 and a partial compliance of Scope 3 (the remaining indirect emissions like the extraction, transportation, production of goods in the supply change, investments, business travel, and waste disposal). Walmart launched Project Gigaton in 2017:
“Project Gigaton aims to avoid one billion metric tons (a gigaton) of greenhouse gases from the global value chain by 2030 by inviting suppliers to set targets and take action in six areas: energy use, sustainable agriculture, waste, deforestation, packaging and product use.”
More than 2300 of Walmart’s suppliers have signed up to participate in the project making it one of the world’s largest joint efforts of corporations all working together to combat climate change.
By 2030, Walmart hopes to work with it’s suppliers to reduce CO2 emissions by 50 million megatons of CO2 emission in their China-based supply chain.
The reduction in Scope 3 emissions from the supply chain is tricky as it requires all parties from production, packing, shipping, transporting, etc to work together and agree on shared reductions. This is the hardest to reduce but in the end, the most impactful as it ripples across the whole chain.
Human Rights score: 3/5
With its fingers dipped in many pies throughout the supply chain, Walmart has had a problematic track record when it comes to human rights, earning them the Arbor score of 3/5. Back in the 1990s, an NBC Dateline episode broke the story of Bangladeshy child labourers making products for Walmart for 5 cents an hour. Walmarts CEO denied this at the time.
Human Rights Watch connected Walmart to a shrimp processing plant in Thailand with widespread accusations of human trafficking. Not only were the workers found to be working in less than legal conditions, but according to the HRW exposé,
“Workers who wanted to leave found it difficult, organizers say, because their official documents, including work permits, health cards, ID cards, and passports, were reportedly confiscated and held by factory management to prevent workers from running away. New workers were told they would only get their documents back after their debts were paid off—a key criterion used in legal cases to prove human trafficking.”
In 2018, research conducted into gender-based violence found in Walmart’s Asian supply chain was addressed in an open letter penned on behalf of the Asia Floor Wage Alliance (an international alliance of labour activists and trade unions). The coalition asked for immediate action by Walmart to address their findings of “sexual harm and suffering, physical violence, verbal abuse, coercion, threats and retaliation, and routine deprivations of liberty including forced overtime.”
In response to the global outrage over the collapse of Rana Plaza garment factory in 2013 that killed 1,134 garment workers (where goods for Walmart have been produced), 200 companies signed the Accord of Fire and Building Safety in Bangladesh. Walmart refused to sign the contractual agreement to ensure safe working conditions for garment workers. Instead they drafted their own accord that is not legally binding, does not offer financial support for safety regulations, and does not bar the company from working with factories that refuse to comply.
In Walmart’s 2019 Environmental, Social, and Governance report, they addressed the Rana Plaza disaster and the human rights violations in their seafood supply chain as examples of their areas of focus.
And when it comes to human rights in supply chains, we aim not only to source responsibly, but also to work with others to rewire chains for social sustainability — for example, improving Bangladesh factory safety through our work with the Alliance, or fighting modern slavery in seafood through our work with the Seafood Task Force and the Leadership Group for Responsible Recruitment.
Walmart has taken positive steps towards racial equality both internally and externally. They started the Racial Equity Institute to “deliver training focused on examining systemic racial inequity in its institutional and structural forms.” In 2020 they committed $100 million over the next five years to the centre. And, so far, over $14 million in grants has been delivered to organizations like the Martin Luther King Jr. Center for Nonviolent Social Change and U.S. Vaccine Adoption grant to increase education and awareness through the NAACP, the Association of Asian-Pacific Community Health Organizations, and others.
Corporate Ethics score: 3/5
According to Walmart’s Diversity, Equity and Inclusion report, Walmart has “for the fifth year in a row, [and has] earned a top score of 200 on the Human Rights Campaign (HRC) Foundation’s 2021 Corporate Equality Index (CE1), a national survey and report measuring corporate policies and practices related to LGBTQ workplace equality”. The same report also notes Walmart’s recognition on Bloomberg’s 2021 Gender-Equality Index. This is a standardized system of reporting that tracks how companies support gender equality through transparency, the supply chain, and policy development.
With globally recognized ratings like these, how come Walmart only has a 3/5 score?
The same NBC Dateline program that alleged Walmart was profiting of the use of child labour also claimed that they were selling imported goods with a “made in America” label stuck on them. This was at the tailend of Walmart’s “Buy America ” campaign where it claimed to upping its supply of domestically manufactured goods (at the time of the campaign, only 5% of the products sold in there US stores was from domestic workers. Although they denied the child labour alligations, they did fess up the incorrectly promoting imported good as domestic.
In the early 2000s, when Walmart officially gained retail dominance and became the largest retailer in the world, it was also gaining an equal amount of criticism for its domestic labour practices. With high turnover of employees, routine squashing of unionization attempts, and hourly rates that kept many of its regular employees below the poverty line Walmart’s rapid growth was achieved by aggressively entering foreign markets but on the backs of its employees.
Spanning over 20 years, dozens of states, and several hundred women, Walmart is continuously being hit with sexual descrimination lawsuits –some making it all the way to supreme court– in regards to high gender pay gaps, and routinely being bypassed for promotions by less qualified male employees. In 2001, a Walmart greeter named Betty Dukes, said in her class action suit against the company that Walmart is “an industry leader in not only size, but also in its failure to advance its female employees”. In a lawsuit filed in 2019, a female employee claimed that when she approached management after discovering she was making $2,000 less than male employees in the same position (a similar lawsuit in 1996 a female employee discovered that her male cohort was making $10,000 more a year), she was met with the response: “they have families to support”. These lawsuits have turned out to be lengthy ones and many of these women are still fighting against Walmart.
A New York Times investigation revealed that in the pursuit of market dominance and rapidly building stores across the country, Walmart was bribing Mexican officials for permits, to eliminate fines, and to gain access to confidential information. Walmart, the largest private employer in Mexico at the time– admitted to the scandal and hired its own investigators to look into the allegations. But upon further investigation by the NYT, they found that Walmart never reported the crimes to US or Mexican authorities.
Walmart has an anonymous ethics hotline where employees and customers can report concerns or ask questions. This is not third party operated –like many the hotlines of other mega companies Google, Apple, and Amazon– but all complaints are received by their Global Ethics Office in Bentonville Arkansas.