Did you hear about our new packaging?

Last Friday, Wal-Mart Watch had the opportunity to attend a presentation on “Wal-Mart, China and Responsible Sourcing” at Johns Hopkins University.  Beth Keck, the senior director of international sustainability and strategy for Wal-Mart, was there to represent Wal-Mart.

Keck’s presentation primarily focused on sustainable buildings, plastic bags, and packaging, but also mentioned Wal-Mart’s new supplier standards.

After Keck finished her 28 slide PowerPoint presentation, she fielded questions from the audience.  A great majority of those present wondered if Wal-Mart’s “always low prices” mantra is inherently contradictory to sustainability.  Keck replied that it is not and talked about packaging.

Regarding the new supplier standards, I pointed out to Ms. Keck the reaction Wal-Mart’s sustainability summit had received in the news and I asked her how Wal-Mart suppliers were to supposed to pick up the costs of improving standards when many of Wal-Mart suppliers are forced to supply Wal-Mart with little or no profit. 

Keck talked about packaging…

I reiterated that Wal-Mart suppliers are being pressed by increasing costs and that Wal-Mart has refused to raise prices.  Since suppliers are unlikely to have the resources to invest in improvements, I questioned Keck on what Wal-Mart was actually doing to make a more secure and sustainable supply chain a reality.  Where will the money come from?

Keck briefly replied that suppliers “will have to find the money”.  Perhaps Keck hasn’t heard, but money doesn’t grow on trees.  Nor does it fall from the sky or appear out of nowhere by any other means.

In fact, in July 2007, Wal-Mart’s relations with one of China’s most credible suppliers soured because Wal-Mart was unwilling to raise prices.  Because Wal-Mart’s prices are so low, Xinhua reports that many factories will accept Wal-Mart orders only to outsource the projects to smaller, less accountable factories - thus creating risk within Wal-Mart’s supply chain.

So what does that mean for Wal-Mart sustainability?  It means Wal-Mart will continue to focus on areas it can make real and profitable change, such as packaging, but everything else is mere PR.  If Wal-Mart were serious in creating a sustainable, safe, and secure supply chain, it wouldn’t be ramping up production in Vietnam - Wal-Mart’s new host for “so-called cheap exports”.  If Wal-Mart were truly invested in sustainability, Chinese suppliers wouldn’t be laying off half their staffs.

Until then, expect to hear a lot more about Wal-Mart’s packaging.

Posted by Research Team on Monday, November 17, 2008

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