Wal-Mart Determined to Lead in Corporate Social Responsibility
By Andrea Ferdinand
Scientists predict that by 2050, if current consumption habits continue, it will take four Earths to support the population.
“We have a very serious problem with consumption in the world, and something has to change,” said David Blackwell, BBA ’80 and Wal-Mart’s vice president and CFO of global procurement, Feb. 8 at the Sustainability and Business Speaker Series co-sponsored by the McCombs School of Business.
Blackwell said Wal-Mart, a company founded on the principal of taking care of its customers and whose leader refused to get involved in politics, was reluctant to change its practices at first.
“Our company’s ideals worked very well up until 2000 when we became the world’s largest company,” Blackwell said. “For several years, we tried to ignore the situation, but when you’re that big you can’t ignore it.”
Leveraging Size to Promote CSR
Hurricane Katrina helped change a lot of minds within Wal-Mart. When the government was unable to deliver necessities like food, medicine and water to those who were stranded, Wal-Mart stepped in.
“We literally saved thousands of lives,” Blackwell said. “What Katrina showed us was how we can use our size and resources to do something very good.”
Inspired by its role in helping Katrina victims, Wal-Mart looked at the impact a company its size could have throughout the world on a daily basis if it embraced corporate social responsibility (CSR).
Thinking like a Country
Of the 100 largest economic entities in the world, 32 are companies, not countries. Wal-Mart is currently ranked 19th in that list and predicts that in the next few years it will be among the top 10.
“Governments don’t make any goods—businesses do,” Blackwell said. “So, it’s going to be companies—not governments—that solve these problems.”
Wal-Mart developed three long-term goals: to be 100 percent supplied by renewable energy, to make stores 25 percent more efficient and to create zero waste.
“We are well on our way to achieving these goals,” said Blackwell. “We are going to hold ourselves and our suppliers accountable.”
Corporate Accountability: Leading by Example
Because Wal-Mart only directly manufactures 8 percent of everything is sells, the solution lies for the most part with the suppliers, Blackwell said.
“If we convince our suppliers to be socially responsible, it won’t just affect Wal-Mart, it will affect Target, K-Mart, Sears, HEB, etc.”
But Wal-Mart isn’t relying solely on the suppliers. The retailer has created energy-efficient stores, such as its Supercenter in McKinney, Texas, that is powered by wind turbines, has more than 160 skylights, uses advanced heating and cooling systems and recycles cooking oil from the kitchen to provide supplemental heating. The company is also reducing its emissions and saving over $300 million a year in fuel costs. And when Wal-Mart and its suppliers can’t figure out the problem on their own, they go directly to the source—like the farmers who are growing organic cotton—to solve the problem.
Consumer Responsibility
In the end, Blackwell pointed out that the companies can be socially responsible, but consumers must also take action.
“You have to ask yourself if you are going to be involved by just talking about a solution, or if you are going to be committed by actually working to create change.”
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