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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…

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Despite its best efforts, Wal-Mart could not hold off Barack Obama and the incoming Democratic wave hitting our nation’s capital. When asked about the election results, Wal-Mart CEO Lee Scott, in a letter to associates, said Wal-Mart was committed to working with either party.

“A number of associates asked me how our company viewed the election and what our post-election plans were. I told those associates that this is clearly a time of great opportunity for our country, and also a time of great challenge. I reminded them that last June I said that Wal-Mart looked forward to working with the new President and Congress, regardless of party, to find solutions to our challenges. We are even more committed to that objective today.”

Talk about revisionist history. Wal-Mart, since the beginning of the campaign, made it clear to everyone that the company would rather deal with John McCain. While disappointment is in the air in Bentonville, regular associates around the country should rejoice. Now workers have an advocate in the White House!

So where does Wal-Mart go from here? It looks like Wal-Mart has decided to hire a new set of “reputation warriors” and other government relations personnel to mislead inform Congress about two key issues – health care and sustainability. These new directors will beg for mercy advocate for Wal-Mart’s interests on Capitol Hill.

I think we are all familiar with Wal-Mart’s benefits package and green campaign. Good luck to the brave souls who fill these positions, you will need all the help you can get.

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According to The Christian Science Monitor: “In Britain, carbon footprinting – used initially to broadly measure environmental impact across a company’s entire operations – is morphing into an eco-labeling tool.” This after a British group reported that 80% of a product’s carbon footprint is laid before the consumer actually drives out and buys or uses it.

Unfortunately, carbon-labeling appears to be a tool Wal-Mart believes the American consumer isn’t ready for.

As for carbon-labeling, Wal-Mart’s senior vice president of sustainability, Matt Kistler, says that he doubted existing methodologies and the Wal-Mart customer’s ability to relate carbon with consumer merchandise. “I’m not sure the consumer will ever make a purchase based on the carbon footprint,” he says, “especially the mass consumer.”

Possible. But I think Mr. Kistler underestimates the public’s knowledge on the issue. Sure, many consumers may not know what exactly a carbon-footprint is, but the majority have probably at least heard the term and know it relates in some way to the environment. Carbon-labeling may not affect the buying habits of the majority, yet even if a small percentage of Wal-Mart shoppers were to see the labels and be moved to research the issue further, that can’t be a bad thing, right?

Those making efforts to examine their carbon footprints often do so without transparency – essential to generating both customer support and supply-chain innovation.

At Wal-Mart, consumer transparency is largely tied in to its corporate press releases, a growing assortment of eco-labeled products, and in-store awareness campaigns. A more robust effort is the company’s “Love, Earth” jewelry, which enables customers to use the Internet to map where the jewelry’s gold and silver were mined and manufactured, including information on how the mines manage cyanide and waste dumps.

Are you ready to go on a carbon diet? [The Christian Science Monitor]

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Today, Wal-Mart gathered more than a 1,000 suppliers in Beijing, China to “reveal a new supplier agreement that will require manufacturers to allow outside audits and to adhere to specific social and environmental criteria.” This so called “sustainability summit” was a public relations ploy to quell concerns that Wal-Mart has not done enough to ensure product safety, protect factory workers rights, and to lessen its global footprint. 

Wal-Mart’s current supplier standards already contain such provisions for audits and adherence to social and environmental criteria.  And while Wal-Mart’s goals of increasing unannounced audits and working with independent auditors are lofty, revising the current standards is insufficient in comparison to the real problem:  Wal-Mart’s infamous push for the lowest costs possible, no matter what. 

When Wal-Mart refuses to pay factories a fair price, many factories simply make up for low profit margins by forcing laborers to work overtime with little rest or substituting quality materials for inferior, and often toxic, ones.  When audits occur (usually within the factory confines), workers have been coached on appropriate responses for passing the audit.  In short, Wal-Mart is getting exactly what it pays for.

And that Lee Scott thinks “offering long-term agreements to suppliers willing to make the big investments needed to live up to Wal-Mart’s environmental demands” would be adequate compensation for the necessary changes is not only insulting, it’s absurd.

As Shao Zhuliang a Chinese business executive said “It’s always hard to make money from Wal-Mart orders.” In fact, reputable factories that meet standards and provide quality products have refused to work with Wal-Mart because the orders are unprofitable and that the risks and logistics of working directly with Wal-Mart are not worth the price.

If Wal-Mart is going to change, it needs to put its money where Lee Scott’s mouth is.

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The latest in a long, impressive history of environmental violations:

The U.S. Environmental Protection Agency (EPA) today announced a settlement with Wal-Mart to resolve alleged violations of the Clean Air Act (CAA), which prohibits the sale or distribution in interstate commerce of non-essential products containing substances commonly known as Ozone Depleting Substances (ODS). According to the terms of the settlement, Wal-Mart will pay a total civil penalty of $199,000. Wal-Mart has taken action to investigate the causes of the violation, to come into compliance, and to ensure that the violation does not recur.

Maybe they forgot to run “Glow In The Dark Looney String” through the Live Better Index?

Agreement Reached Wtih Wal-Mart in Bentonville, AR on Clean Air Act Violations [EPA Press Release]

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Wal-Mart has already acknowledged (PDF) the fact that illegal logging goes on in its wood supply chain. A new investigation by The New Yorker follows lumber from the forests of Russia to the toilet seat aisle of Wal-Mart stores.

Taking six years to eliminate illegal logging from its supply seems like a long time for a company that can get Procter and Gamble to sell concentrated laundry detergent in a matter of months, don’t you think?

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Norwegians have dealt another ethical blow to Wal-Mart.

The Norwegian Government Pension Fund, known as the oil fund, has long since dropped all shares of Wal-Mart stock. But today it was announced that the fund dropped its entire $853 million stake in major mining company Rio Tinto for “grossly unethical conduct” resulting in massive environmental damage. This is the same Rio Tinto that Wal-Mart selected to supply it with “sustainable” jewelry.

The fund specifically cited the company’s mining practices in Indonesia, where it, among other things, “discharges about 230,000 tonnes of waste product – known as tailings – per day into a local river.” Rio Tinto is currently being blamed for thousands of deaths in Papua New Guinea, and good rundown of Rio Tinto’s history of labor and environmental abuses can be found here.

And remember, Rio Tinto is just supplying the “sustainable" 10% of Wal-Mart’s jewelry…

Ethical investors attack Rio Tinto [The Independent (U.K.)]:

The Norwegian government has launched an unprecedented attack on the UK mining giant Rio Tinto, selling a £500m holding in the company after accusing it of “grossly unethical conduct” relating to environmental damage.

The Norwegian Ministry of Finance released a statement yesterday saying it had “decided to exclude the company Rio Tinto from the Government Pension Fund – Global, due to a risk of contributing to severe environmental damage”.

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Curbing carbon emissions is a crucial part of environmentalism, but its an issue which Wal-Mart has been slow to address. In 2005, Wal-Mart CEO Lee Scott announced plans to reduce Wal-Mart’s massive carbon footprint, with the ultimate goal of carbon neutrality from the company. Carbon offset programs – methods of shifting the burden of carbon elimination to a third-party – were an imperative part of that plan.

To better implement these carbon offset programs – and to avoid misleading marketing claims about the process – the Federal Trade Commission began work standardizing offsets and regulating the process. Wal-Mart, however, had other ideas about the process.

Herein lays the scandal: Despite the company’s “green” initiatives, Wal-Mart is actively lobbying against the clarification of offset guidelines. The company’s hypocritical stance on the issue came to light last week in a hearing of the Federal Trade Commission. The FTC is attempting to modernize the “Green Guides,” guidelines issued for corporations defining acceptable marketing claims regarding environmental products and initiatives. In response to the FTC’s solicitation of retailer comment to guide the process, Wal-Mart’s Director of Energy Regulation, Angela Beehler, expressed Wal-Mart’s firm opposition towards the clarified scope and definition of carbon offsets:

Wal-Mart’s Comments to U.S. Federal Trade Commission (PDF)

Although some may urge otherwise, the Commission should resist the temptation to define what constitutes an eligible offset or REC. Doing so would require the Commission to resolve highly technical environmental debates that are beyond its expertise…

The Commission should recognize that in the absence of a governmental definition or a widespread consensus about the precise contours of what constitutes a carbon offset or a REC, there may be multiple ways to establish a reasonable basis for such claims.

Beehler’s words reveal Wal-Mart refuses to endorse even a proper definition of a “carbon offset,” and it follows that the corporation is uninterested in the transparency necessary to ensure the legitimacy of its environmental claims.

Wal-Mart’s attempt to keep offsets guidelines vague shows the company is more interested in marketing potential than actual environmental change. Unspecific standards would allow the retailer to ‘commit’ to carbon-neutrality, without providing much real documentation. A responsible, sustainable corporation would place the necessity of carbon-offset clarification and oversight in front of the bottom-line.

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