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Wednesday, December 14, 2011

Strategic CSR - Walmart

Just when you think Walmart is making strides in relation to CSR broadly defined, the article in the url below reminds us that, beyond seeing sustainability as a means to decrease costs, the firm has a way to go before it incorporates a CSR perspective throughout all aspects of operations (Chapter 3, p53). In a policy statement released in September:

Wal-Mart said it planned to source a total of $20 billion in products from women-owned businesses in the United States over the next five years, which works out to an average of $4 billion a year, versus the $2.5 billion a year it currently spends, and to double what it buys from women-owned businesses globally by 2016. The company said it would also support training of women in factories and farms that are Wal-Mart suppliers, donate $100 million to causes supporting women’s economic development, and ask its vendors and services firms like ad agencies or public relations firms to increase gender and minority representation on their Wal-Mart accounts.

As Leslie A. Dach, executive vice-president for corporate affairs at Walmart, explains:

‘If you look at retail, the vast majority of our customers are women, and if you look at Wal-Mart, the majority of our associates are women. ... It makes complete sense for us to really have a focus on how we have the best associates we can, how we help women suppliers succeed and how we engage our communities.’

But, if this approach ‘makes so much sense,’ why did Walmart wait until it faced the possibility of crippling class-action litigation (and, now, individual claims stemming from the failed attempt to group all female employees of the firm as a ‘class’) before considering its introduction? In addition, why limit the commitment to such a small percentage of Walmart’s overall procurement budget?

The $4 billion a year, on average, that Wal-Mart will spend sourcing from women in the United States works out to about 5 percent of the company’s annual operating expenses.

In response, Walmart stated that the new policy announcement “was not in reaction to the class-action suit against Wal-Mart, which charged unfair treatment of women in the workplace.” The court ruling was decided on June 20, 2011 and Walmart’s new policy announcement was released on September 14, 2011.