Walmart is the largest world corporation of retail and grocery stores, which operates both on the US market and internationally. Its scale is tremendous, which results in a huge environmental impact. At the beginning of the previous century, Walmart’s reputation was deteriorating among consumers and environmentalists. Therefore, the company launched an environmental sustainability initiative in 2005 to comply with the trends of that time.
Given that some consumers stopped shopping in Walmart, the company was eager to evaluate its impact on the environment and implement the appropriate strategy. Independent auditors and companies assessed Walmart’s activity and environmental impact, and identified three primary areas to concentrate on. The major focus was put on energy, waste and products. Such sustainability strategy was planned not only as an environmental initiative but a business strategy aimed to designate the company’s positioning and regain value among its customers.
To address the areas for improvement, Walmart started with global logistics. Even though the company was known for its extremely efficient supply chain, the adjustments were needed to comply with the sustainability strategy. For instance, Walmart asked its logistics team to elaborate on the routes to contribute to the reduction of air pollution, and improve the efficiency of its fleet over several years. Also, the optimization of work and collaboration with its suppliers was needed to improve the environmental performance. In spite of diffusing its cooperation with more than 50 000 thousands of Chinese suppliers, the right decision was to concentrate on the major twenty of them (“Walmart’s Sustainability Strategy”). Moreover, an audit was initiated to inspect the factories and enterprises of the Walmart’s suppliers. Based on its results, the companies were given a definite status that indicated their compliance with the environmental requirements so the customers’ buying behavior was primarily based on that.
The implementation of the sustainability concept in Walmart can be analyzed based on the analysis of seafood, textile, and electronics industries. As for the fish, MSC certification was adopted to assure that customers get products of the best quality. However, the customers were not willing to pay extra for this certification – promotion was needed. In regards to the electronic industry, major achievements were noticed there – the amount of e-waste was reduced and compliance with environmental principles in production was adopted. However, suppliers did not want to share confidential business information regarding their energy efficiency because it could influence the competition levels significantly. The progress in the textile industry was probably the most eminent because Walmart became the largest organic cotton buyer in the world. This innovation became the top priority within the chain of hypermarkets.
The implementation of sustainability strategy in Walmart had both positive and negative implications. The company has definitely gained success in the waste reduction and enhancement of energy efficiency. However, promotion of green and eco products could lead to fading of its conventional alternatives. Even though suppliers reported its production to gain more compliance with environmental sustainability, they could not provide enough information because of confidentiality issues so Walmart could not defend the benefits for customers. Finally, Walmart became more dependant on its suppliers to meet its public goals.
Works Cited
“Walmart’s Sustainability Strategy.” Stanford Graduate School of Business, 2007.