How Business Can Add Value to Society

Last week, Walmart was proud to join 12 other major U.S. corporations to officially pledge support for the American Business Act on Climate Pledge. Those of us who made this pledge attested to the need for businesses to help reduce, avoid and mitigate the impact of rising greenhouse gas (GHG) levels.

I’m often asked how Walmart comes to big decisions about pressing global issues. After all, we are a large company, and any decision we make can reverberate throughout our entire business, and the retail sector as a whole. We also have dozens of different stakeholders to answer to, and they don’t always have the same priorities.

When we consider whether to take on a global responsibility initiative, we ask ourselves five key questions:

• First, we consider whether the initiative is relevant to our company’s core mission of saving customers money and helping them live better.
• Second, we look at whether we will be drawing on our unique business capabilities to help solve the problem. With Walmart, those capabilities are usually our size, and our presence at so many different points across our supply chain.
• Third, we analyze whether the proposed action would achieve “double bottom line” results that benefit our business and customers, as well as society, all at once.
• Fourth, we ask whether we would be helping to reshape global systems for long-term improvement for society.
• Fifth, we make sure we will be engaging with partners. Over the years, we have learned that it is essential to collaborate with other leaders of the systems we are seeking to strengthen. The difficult challenges facing the world today are well beyond the scope of any single player to address, and solutions depend on cooperation.

With the American Business Act on Climate Pledge, Walmart saw formally supporting it as meeting all five of these tests, and therefore being a prudent decision for our business. It was a natural extension of our decade-long commitment to reduce emissions, and make our business more efficient.

For example, in 2014, we operated with nine percent less energy per square foot compared with our 2010 baseline and 26 percent of our electricity used was generated from renewable sources, keeping us on track toward our goal of being powered by 100 percent renewable energy. We’ve reduced the GHG intensity of our operations for eight consecutive years, and we’re on track to hold our absolute emissions flat over this decade, even with our continued growth as a company. We are working with suppliers, representing approximately 70 percent of our food sales, to report their yield, water and GHG footprints all the way back to the farm, and we’ve also established joint agricultural partnerships with 17 suppliers, cooperatives and service providers on 23 million acres of land in the U.S. and Canada, with the potential to reduce 11 million metric tons of GHG by 2020.  Because of these efforts, we’re on track to exceed our 2015 goal of eliminating 20 million metric tons of GHG emissions from our supply chain.

We know there is still a lot more work to be done, but we’re making progress, and are pleased to be a part of something so big.  Every healthy, high-performing company has an obligation to make prudent decisions for their business as well as do the right thing for society.  The results of the work described here—cleaner, more affordable energy, a sustainable food system, cost-savings for our customers, and the reduction of GHG — demonstrate that while large-scale change does not happen overnight, the stakes and potential benefits are immense.

Kathleen McLaughlin is President of the Walmart Foundation.