Wal-Mart is changing

May 01, 2006

Wal-Mart, sceptic of the CSR ‘industry’ is changing. If you are a supplier, do expect to be asked a lot more questions about your approach to CSR although they’ll want high standards AND low prices of course.

Be warned: Wal-Mart – champion of low prices, sceptic of the CSR ‘industry’, refusenik on social reporting – is changing. In a series of full page ‘op ed’ adverts in US publications this spring, it confesses to have been so busy “minding the shop” that critics took it by surprise. It promises to get involved in the debate, not least because “Wal-Mart’s size and industry leadership mean that people expect more of us”.

And Wal-Mart is big by any standard: 1.6 million workers, the world’s largest private sector employer; 138 million customers every week; and 68,000 suppliers providing a mind-numbing 680 million stock keeping units.

Don’t expect Wal-Mart to go soft on its relentless driving-down of consumer prices. But if you are a supplier, do expect to be asked a lot more questions about your approach to CSR (they’ll want high standards AND low prices of course). And the rest of us can expect a trenchant exposition of the case that companies’ first social responsibility is to maximise their economic impacts.

Meanwhile, Nike has returned to social reporting, after a three-year Kasky-induced pause, with a bang – and a challenge. Better labour conditions in its own supply chain is no longer the aim. Improvements imposed through one contract in one factory are inevitably transitory. Now the goal is to raise standards in the whole industry. By declaring unprecedented detail, Nike aims to “jumpstart disclosure and collaboration”, and hopes we’ve reached the tipping point for mainstreaming best practice: in other words, forcing others to raise their game too.

The cynic would say that this is also a smart way to offset the heavy monitoring and compliance costs from the brand leader to others. But these moves by Nike, and by Wal-Mart and others, mark a step change in supply chain ethics.

Corporate Citizenship Briefing, issue no: 81 – April, 2005