The Greening of Wal-Mart, China Edition

♠ Posted by Emmanuel in ,, at 4/07/2008 12:35:00 AM
Regardless of what you think of Wal-Mart's practices, especially those in the social and environmental domains (I'm not too fond of it myself), this latest news that it is gathering its Chinese suppliers to figure out ways of minimizing the ecological footprint of its vast supply chain is certainly welcome. Let's just hope that it's more than cosmetic "greenswashing"; there are few CSR bogeymen of the same size as the elephantine Wal-Mart. The numbers offered in this Financial Times article suggest the potential for Wal-Mart greening:

Wal-Mart, the world’s largest retailer, is to convene a meeting of hundreds of its Chinese suppliers to set out goals for significant reductions in the environmental impact of its vast supply chain. Wal-Mart accounts for about 30 per cent of all foreign buying in China and just under 10 per cent of total US imports from the country, which were worth $321bn last year.

About 1,000 Chinese companies are expected to attend the Wal-Mart event in October, marking a push by the retailer to globalise a drive on environmental sustainability that has hitherto largely been focused on its US operations.

Lee Scott, Wal-Mart’s chief executive, said in an interview with the Financial Times that “we are really ambitious” about what can be achieved in China, given increased evidence of government concern over the environmental damage done by rapid industrialisation. “I’m very confident that we are going to see in China more progress than any of us has imagined,” he said. “Part of it is . . . because the Chinese government has just now really got on the sustainability process as far as understanding what it is going to mean for them in the long term. And they’re being really aggressive.”

Blu Skye, an environmental consultancy that started advising the retailer in 2004 , is working in China to assess strategies. Wal-Mart launched a drive in 2005 to improve its much-criticised record on environmental and social issues. Environmental Defense, a non-profit group that has also worked closely with Wal-Mart, recently signed an agreement with the China Association of Small and Medium Enterprises to offer technical support on environmental issues. CASME’s more than 5,000 members include many Wal-Mart suppliers.

In January, Mr Scott told an annual meeting of Wal-Mart managers that the company would work with the Chinese government and other groups “to make sure suppliers comply with Chinese environmental laws and regulations” and would set up a “mechanism” to monitor performance. Mr Scott has said he hopes to see significant results in China in three to five years. While he said Wal-Mart would hope to be part of an industry-wide effort, the retailer would move on its own if necessary.

Since factories supplying Wal-Mart supply other leading international customers as well, Wal-Mart officials argue that its efforts could potentially have a big impact on the energy efficiency and environmental impact of China’s manufacturing base.