From the beginning, Walmart has approached sustainability in a network-based way. Walmart’s size and scale required it to seek guidance, resulting in the creation of partnerships and networks.
Visibility and support from higher-ups has allowed Walmart to focus on specific areas and issues and avoid being spread too thin. Translating sustainability into the language of the company and integrating sustainability into performance incentives has helped to align the business.
Walmart’s bold goals around energy, waste, and sustainable products have helped to focus the company in areas where they can make a difference. These ambitious goals have also emphasized the importance of leaning on external stakeholders to figure out how to achieve these goals.
“We can’t internally be experts in all the areas we touch in sustainability and we rely on our external networks to hold us accountable, educate us, bring their expertise, and also to tell us tough things we need to hear.” —Andrea Thomas, Walmart
“Big, bold goals help focus the organization.” —Andrea Thomas, Walmart
“We recognized that that our size and scale comes with a reputation and a responsibility that is different from other companies.” —Andrea Thomas, Walmart
Olson began the discussion by saying how the conference theme of “The Power of Networks” lends itself to how Walmart approaches sustainability. Thomas came from merchandising and is soon returning there, demonstrating one of the links between sustainability and business at Walmart.
Thomas said that, from the beginning, Walmart has approached sustainability in a networks-based way. Walmart’s size and scale required the company to seek guidance, and as a result it has a lot of partners: 10,000 stores in 26 countries, 2 million customers per week, and 100,000 suppliers makes for a complex infrastructure. Thomas added that engaging with a large number of suppliers and store associates has allowed it to do things that would not be possible without their help.
In October 2006, Walmart’s CEO gave a speech on leadership in the 21st century, committing to 100 percent renewable energy, zero waste, and sustainable products to improve people’s lives. These goals helped focus the company on areas where it can make a difference, and given its ambition, Walmart had to lean on external stakeholders to figure out how to achieve these goals. It was important to say from the beginning that Walmart was not doing it for competitive purposes and to stress the importance of collaborating with other businesses. This position enabled the company to have conversations with suppliers and competitors.
Olson then asked about Walmart’s involvement in the creation of the Sustainability Consortium, how the company sold the idea internally, aligned momentum behind it, and maintained support. Thomas responded that it was hard to sell internally and that Walmart’s networks have evolved over time as the issues have changed. Engaging people and communicating the business case and how the company can make an impact was crucial.
Olson pointed out that for some issues, like energy, it is easy to develop a business case and asked Thomas to talk about initiatives where the business case is much less direct, such as women’s empowerment. Thomas explained that while there may not be a direct link now, Walmart sees issues such as women’s empowerment and sustainable agriculture as investments for the future: These groups will eventually be customers and possibly employees or suppliers. Other supply chain issues such as waste reduction can help with big problems later on. The company knows these are investments it needs to make now to survive in 10 or 20 years.
During the Q&A, Thomas discussed the importance of having visibility and support from higher-ups from the first steps down the road to sustainability. That support allows you to focus on specific areas and issues and avoid being spread too thin. It is important to translate sustainability into the language of the organization and integrate it into performance incentives.
An audience member from SupplyChainBrain asked why there have been so many problems in Walmart’s supply chain, given its focus on compliance. Thomas said that Walmart has to consider when to walk away from an issue versus when to engage for improvements, versus when to choose not to source a particular product or from a particular region. Thomas highlighted Walmart’s recent involvement in the Alliance for Bangladesh Worker Safety and a new audit protocol the company is developing. She said Walmart has decided to be part of the solution in Bangladesh as well as in sustainable seafood. In these areas and others, Walmart sees networks as crucial to setting up practices and influencing parties to develop solutions.
A participant asked how Walmart is defining what sustains the environment and consumers, highlighting the lack of regulation of chemicals and different global restrictions for specific chemicals. Thomas said that Walmart’s product goal is more complicated as it does not have the direct influence that it has with waste and energy. Walmart has not figured out how to influence consumers, and has worked to make products more sustainable. The company has focused on chemicals, working with suppliers to make progress on specific chemicals.
Olson then asked Thomas to explain what learnings she will bring back to the merchandising function as she ends her three-year rotation in sustainability. Thomas said that her experience in sustainability has given her new perspectives that enable her to leverage new viewpoints, relationships, and partnerships, and that by expanding her networks both within Walmart and throughout its operations will help as the company continues its path to sustainability.