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Wal-Mart issues citizenship report card
Arkansas Democrat Gazette
November 16, 2007
» Go to http://www.nwanews.com/adg/Business/207863/
By Steve Painter
Wal-Mart Stores Inc., in a report it released Thursday, outlined dozens of ways it says it has changed over the past two years to become a more environmentally, economically and socially responsible corporate citizen.
Critics immediately challenged Wal-Mart’s assertions, pointing to their own report released in September that criticized the company’s environmental moves as insignificant or misleading, its employee pay and benefits as paltry, and its global supply chain as rife with humanrights violations.
In an introduction to Wal-Mart’s 60-page report, President and Chief Executive Officer H. Lee Scott said the company made no claims of being “green” or better than other companies. He also acknowledged that, despite its environmental initiatives, the company’s greenhouse gas emissions continue to grow.
“But what we are saying is we’re doing sustainability in a way that’s real and right for Wal-Mart and is touching the lives of millions of people around the world,” Scott wrote. Wal-Mart’s report also addressed nonenvironmental changes that Scott said are a part of remaining a sustainable business.
The company upgraded its employee benefits plans earlier this year, offering many health plans, including one that starts at $ 5 a month or up to $ 8 in some parts of the nation. It carries a $ 2, 000 deductible and a lifetime out-of-pocket maximum of $ 5, 000.
A $ 123-a-month plan has the lowest deductible, $ 350, and the lowest lifetime out-of-pocket maximum, $ 2, 000.
Wal-Mart says in its report that only 47. 4 percent of its employees take the company's insurance, but 90. 4 percent are covered by some type of insurance, including a spouse’s plan, parents, Medicare, Medicaid and private policies. Those figures are for the current year, before the effective date of the upgraded benefits.
The widely cited Hewitt Benefit Index gives Wal-Mart a score of 102 on health benefits when ranked among 20 retailers and grocery chains, 100 being the average.
Still, union-funded critics said, Wal-Mart comes up short.
“We certainly believe that Wal-Mart, as the world’s largest retailer and America’s largest [private ] employer could do better,” said Meghan Scott, spokesman for the critic group WakeUpWalMart. com, funded mostly by the United Food and Commercial Workers Union.
David Nassar, executive director of Wal-Mart Watch, funded by the Service Employees International Union, said Scott is “missing the point.”
“Contrary to [H. ] Lee Scott’s comments, the company’s current business model is not sustainable. The company’s stock price is flat, sales growth is anemic, and the company continues to think public-relations campaigns can solve its problems,” Nassar said in a statement.
Wal-Mart’s stock closed Thursday at $ 46. 20 a share, down 31 cents, or 0. 67 percent, in trading on the New York Stock Exchange.
Bentonville-based Wal-Mart introduced its environmental initiatives more than two years ago as it came under increasingly harsh criticism from organized opposition groups, some funded in part by labor unions. Wal-Mart has successfully fended off union representation in its U. S. operations.
The ambitious goals included becoming 100 percent supplied by renewable energy and creating zero waste in its operations. It also began offering organic foods and products made with organically raised cotton, though some environmental groups have challenged those labels.
Since then, Wal-Mart achieved one goal of selling 100 million energy-saving compact fluorescent light bulbs in less than a year. In Thursday's report, it also says it has tested and identified a 15 percent increase in energy efficiency in existing stores, opened two prototype stores expected to be 20 percent more efficient and is developing a new prototype that raises the bar to 25 percent.
Wal-Mart says it also has cut the fuel efficiency of its fleet of more than 7, 000 trucks by 15 percent with a target of 25 percent by the end of its current fiscal year.
Companies that supply Wal-Mart now are graded on packaging with a goal of reducing waste, and Wal-Mart is phasing in concentrated-only liquid detergents to reduce shipping costs.
The critics’ report coordinated by the Big Box Collaborative with contributions from 23 organizations said groups had documented occasions of Wal-Mart labeling conventional foods as organically produced and also disputes claims Wal-Mart’s sustainable fisheries partner, the Marine Stewardship Council, accredits fisheries with poor environmental records, among other alleged environmental transgressions.
The umbrella group that produced the report is a coalition of labor, environmental, health, consumer, shareholder and faithbased groups seeking to change the business practices of larger retailers, particularly Wal-Mart.
On the issue of ethical sourcing of products, Wal-Mart’s report says that two years ago it added new criteria addressing health and safety, freedom of association and collective-bargaining, and other rights for foreign contract workers.
The company acknowledged in its report that “the fact that human rights violations persist across the industry signals that we need to find new and better ways to address violations. The circumstances that contribute to these abuses are complex, and addressing them effectively will require that we collaborate with suppliers, non-governmental organizations and governments.”
The Big Box Collaborative report said that earlier this year a study of working conditions in a Wal-Mart supplier factory in the Philippines found violations that included forced and excessive overtime, including 24-hour shifts, empty first-aid boxes and instances of retaliation against workers trying to unionize.
To contact this reporter: spainter@arkansasonline.com
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