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Bite-size Case Study

How Walmart built sustainability into the supply chain

Published on September 29, 2016 Originally recorded 2014   4 min
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Before we discuss the three sustainability challenges that Walmart faced in 2007, let's review the company profile. Walmart operates in the retailing sector. Its key activities are purchasing and sale of consumer goods. Its revenue were about $446.95 billion in 2012. Its compounded annual growth rate was 3.1% between 2010 and 2012. Its activities are spread in a variety of markets around the world. It is the world's largest retailer with more than 8,800 outlets and 2.2 million associates again, in 2012. The key challenges of Walmart were growing CO2 emissions, increasing amounts of waste, unhealthy sustainable products, and moreover a bad public image of the company.
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Walmart adopted an ambitious sustainability strategy to tackle the challenges. It formulated a strategy with three objectives: supplied by 100 percent renewable energy, zero waste, sell products that sustain people and the environment. Sustainability was linked to core business strategy by integrating internal and external stakeholders including NGOs. This represented a departure from traditional closed supply chains philosophy and created the challenge to keep sustainability linked to core business strategy. Three initiatives are noteworthy: Supplier sustainability assessment launched in 2007, Beijing Sustainability Summit held in 2008, and the GreenWERCS project in 2009. The first initiative supports direct suppliers in their sustainability efforts. It increases transparency and track supplier progress and shares best practices. Benefits are improved supplier relationships and improved customer satisfaction. The Beijing summit aimed at social environmental compliance and to improve transparency, safety, quality, and energy efficiency in China which is one of the biggest polluters in the world. Overall, sustainability efforts into China's operations could be improved. The GreenWERCS project aimed at screening products and identifying chemicals of concern and encourage suppliers to use alternative ingredients, mainly branded goods manufactures, and also to increase product transparency. Benefits were transparency, closer supplier collaboration, and sustainable products mostly put on the shelves by Walmart instead of the branded goods manufacturers.
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How Walmart built sustainability into the supply chain

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