Wal Mart - Corporate Social Responsibility PDF

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Corporate Social Responsibility...

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Unit Title:

Communications in Business 100

Assessment:

Critical Essay

Company:

Wal-Mart

Essay Title:

Corporate Social Responsibility: An examination of the performance of

Student Name:

Student Number:

Student E-mail:

Semester:

2 2012

Campus:

Bentley

Tutor’s Name:

Kurt

Tutorial Day and Time: Distance

Wal-Mart

Wal-Mart, founded in 1962, now operates in 27 different countries and employs over 2.2 million people – more than the entire population of Western Australia. The company, now one of the most successful retails in the world, has 10,185 stores and serves more than 176 million customers per year (Wal-Mart, Press Release). In 2005, Wal-Mart announced their new ‘Sustainability 360’ program, which comprised of three goals: -

Be supplied 100 percent by renewable energy

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Be waste neutral

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Sell products that sustain people and the environment. [ CITATION Wal111 \l

3081 ]. Since the implementation of the program, Wal-Mart has been investing a considerable amount of time, effort and money into executing new strategies and processes, and has made enormous progress. Negatives Despite their greatest efforts, due to the sheer size and the continuing growth of the corporation, Wal-Mart is still struggling to convince environmental activists, critics and consumers that it can ever be ‘truly green’. Critics of Wal-Mart have accused the retail giant of ‘greenwashing’ – promoting “an image of environmental responsibility to win consumers favor” [ CITATION Dan12 \l 3081 ]. In one day, one Wal-Mart Supercenter uses the same amount of energy as 1,095 US homes do. A major factor of this is the lighting. Most Wal-Mart stores are open 24 hours a day, which means not only is artificial lighting required indoors, but it’s also required outdoors which can have a negative effect on the local wildlife. Over the years, Wal-Mart have received numerous fines in a number of US states for violating environmental laws [ CITATION Jos07 \l 3081 ], including air pollution, allowing contaminated storm water to enter drainage systems, and improper storage of oil and other hazardous waste [ CITATION Wal \l 3081 ]. In 2010, after a five-year investigation involving more than 20 prosecutors and 32 environmental groups, Wal-Mart agreed to

pay a $27.6 million to “settle allegations that it improperly handled and dumped hazardous waste at stores across California” [ CITATION Ass10 \l 3081 ].

Positives Wal-Mart isn’t all bad though; since the release of the ‘Sustainability 360’ plan, the company has made a significant amount of changes to various avenues of the business. One of the most successful campaigns by Wal-Mart was, as part of their commitment to reducing energy consumption across the US, their push for consumers to begin using compact fluorescent light bulbs (CFLs) over the traditional bulbs. In 2007, the company planned to sell 100 million by the end of the year, but they surpassed that and sold more than 460 million by the end of 2010[ CITATION Sie11 \l 3081 ]. In 2009, Wal-Mart announced that they would be changing the lighting in 650 of their US stores, from ceramic metal halide lamps, to the more energy efficient LED light bulbs, which are designed to have a life of 50,000 hours and use 82 percent less energy than the traditional lights [CITATION GRE09 \l 3081 ]. The change also included parking lots, and some pilot stores even incorporated LED lighting in refrigerators and other display areas. In addition to this, Wal-Mart has also integrated skylights into over 200of their stores, as part of their new ‘daylighting system’. This system allows Wal-Mart stores to dim the lights, or even turn them off completely, therefore reducing energy consumption. This innovation has resulted in an annual saving of approximately 250kwh per year, which is enough to power approximately 23,000 US homes (Wal-Mart, press release).

As part of their three initial goals, Wal-Mart has been making a shift towards renewable energy. By June 30, 2012, 100 stores in California alone have had solar panels installed, with plans to have solar panels at 1000 solar-powered stores by 2020 (WalMart, press release). In addition to this, Wal-Mart has been purchasing wind-power to power some of its major stores. Most recently, Wal-Mart has erected a 20-storey wind turbine in California which will be used to power one of the distribution centres, which, according to estimates, will provide roughly 15 to 20 percent of the yearly electrical use.

Wind power is also being purchased in Massachusetts, with one store being powered by 12 mini turbines [ CITATION Che12 \l 3081 ], and Texas, where 15 percent of the power for the 300 stores is being supplied by wind power [ CITATION Reu12 \l 3081 ].

Another goal of the ‘Sustainability 360’ program is to reduce all waste in its operations and eventually reach zero waste. Wal-Mart has chosen to focus on the three “R’s” – reduce, reuse and recycle [ CITATION Wal11 \l 3081 ]. Part of these plans include reducing plastic bag usage and selling affordable substitutes, as well as converting expired food into animal feed, and donating left over food to food banks. In 2010 alone, Wal-Mart donated the equivalent of 197 million meals, and managed to prevent more than 80% of their Californian waste ending up in landfill. Following that result, Wal-Mart has devised plans to roll out waste productions at its 4400 US stores, and estimate that it would trim its carbon footprint by 11.8 metric tons per year[ CITATION Ale11 \l 3081 ].

Wal-Mart have also committed to improving and decreasing the packaging used for their products. By working with their suppliers, they plan to be packaging neutral globally by 2025. One notable example of reduced packaging is for a HP laptop – instead of the laptop and peripherals being packed into numerous cardboard boxes, Styrofoam and plastic, the laptop and accessories are now packed directly into a laptop bag made from 100 percent recycled fabrics. This has reduced the packaging for the laptop by 97 percent (Wal-Mart, Press Release). In addition to this, Wal-Mart also reduced packaging on their private line of children’s toys, and saved a massive $2.4 million per year after needing almost 500 less shipping containers to ship the same number of items, and after asking one of their suppliers to refrain from using wire ties in packaging, they’ve prevent 1 billion feet of wire from ending up in landfills [ CITATION Gre11 \l 3081 ] Some more examples of reduced packaging include: -

Using recyclable packaging on Apple iPods

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Fresh fruit being packed in biodegradable trays

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Making lids on water bottles 70% lighter [ CITATION Kev10 \l 3081 ].

In addition, Wal-Mart have also introduced a packaging scorecard, which contains information for over 300,000 of the items carried by Wal-Mart stores and can be used by suppliers to predict the flow-on effects that changes in packaging may have, for example waste, energy use and greenhouse emissions [ CITATION Kev10 \l 3081 ]. As mentioned above, the reduced packaging also has a carry-on effect with transportation requirements, and the decreased packaging has meant that more products can be shipped at a time, which in turn has meant the company can pass on numerous price cuts to consumers[ CITATION Gre11 \l 3081 ].

Global operations have also been improved since the introduction of the ‘Sustainability 360’ plan; recycling has been improved in the UK, Wal-Mart stores in Argentina have introduced plastic bag-free checkout lanes, China has reduced plastic bag waste by 84 percent and various Canadian stores have successfully achieved near zero waste (WalMart, Press Release). Not content with just improving their own energy efficiency, Wal-Mart started SEEP – Supplier Energy Efficiency Program, and have also pushed suppliers into using more energy efficient methods, and beginning in 2010, all new suppliers in China were screened for environmental practices [ CITATION Env10 \l 3081 ]. Between the periods of 2007 to 2010, SEEP has completed roughly 20 projects, with more to come. One supplier involved in SEEP, Dana’s Undies, saw their energy costs fall by 71 percent [CITATION Til10 \l 3081 ].

With the introduction of SEEP, Wal-Mart is continually being recognized as an industry regulator for sustainable practices, primarily for the reason that, unlike the government, they aren’t confined by constitutional processes. With over 100,000 suppliers worldwide, Wal-Mart has suggested that rewards will be offered to those who show progress towards meeting goals. As well as the reduced packaging mentioned above, suppliers of food products have also been requested to reduce sugar, fats and sodium by 2015. [ CITATION Jac11 \l 3081 ].

As well as looking after their customers and working with suppliers, Wal-Mart has also invested in numerous community based programs. One of the stand outs is a $35 million investment with The National Fish and Wildlife Foundation which resulted in the formation of the Acres for America Program. The program promises that for every acre occupied by Wal-Mart’s facilities in the US, one acre of conservation land will be protected. The program initially estimated that by 2015, they would have protected 138,000 acres; however this goal was surpassed in 2010 when they had already conserved more than 625,000 acres [ CITATION Wal05 \l 3081 ]. Although Wal-Mart is continually struggling to convince people of their energy efficiency, their continued dedication to incorporating new energy saving techniques really has to be admired. All of the changes so far have meant that Wal-Mart has been able to keep their prices low, and therefore pass those savings onto the consumers. They have proved time and time again that their goals, while very ambitious, are clearly attainable and have quickly become one of the leaders on the path for more sustainable business practices not only in the US, but around the world.

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