Walmart’s big green bet: local produce, “human dignity”
Walmart (WMT) may soon find out whether it’s easy -- or profitable -- being green.
The country’s biggest retailer is ramping up its environmental goals, noting that the plan is part of a “new era of trust and transparency.” The vow, which will be delivered by chief executive Doug McMillon today at the environmentally focused Net Impact Conference in Philadelphia, includes doubling sales of locally grown produce and supporting the “human dignity of workers in the retail supply chain.”
The green-focused goals come amid a changing consumer landscape, with the millennial generation now outranking baby boomers in numbers and projected to move into their prime spending years. Millennials are also considered more likely to pony up for environmentally sustainable products, while members of Generation Z -- the demographic that’s younger than 20 -- are willing to pay more to shop at companies that are committed to helping social and environmental causes, Nielsen found in a 2015 survey.
“We have done a lot of work with our key customer target, millennials and busy families, and these issues are growing in importance with those customers,” Laura Phillips, senior vice president of Walmart Sustainability, told CBS MoneyWatch. “When we started the work [about a decade ago], we were maybe a little bit ahead of consumers, and they are pushing and pulling now.”
It’s no coincidence that the goals are coming at a time when Walmart is seeking to rebuild shopper trust -- and reinvigorate its sales growth -- after complaints about empty stores shelves and poor customer service and even working conditions.
Under McMillon, the company has raised wages for more than a million workers and invested $2.7 billion during the last two years on training, education and higher pay.
Still, Walmart has struggled to buck its reputation as a low-wage employer providing few opportunities for advancement. At employment site Glassdoor, the retailer’s rating has slowly improved during the past year, reaching a rating of 3.2, although that’s lower than rival Target’s 3.4 rating among its employees.
Walmart wants to revamp how potential hires think about it, with the company noting that its vows include being “the place to go for an individual’s first job” and “provide a clear path for career advancement.” The company said it will train millions of workers to improve their career growth by 2025.
It also said it will provide work schedules at least two weeks in advance so that employees will have more predictability in their lives, and will put in place a “strong leave policy” that allows workers to decide how to use their paid time off.
As for the green goals, the company said it will source more products locally, including produce, with the goal of doubling its sales of locally grown vegetables and fruits by 2025. It said it will also work with suppliers and its own private-brand products to get rid of synthetic colors and artificial flavors “in products where customers don’t expect to find them.”
Its energy goals include relying on renewable sources for half of its energy needs by 2025, with Walmart saying that it’s the first retailer with an emissions-reduction plan that has been approved by the Science Based Targets Initiative, a group created by nonprofits and agencies such as the U.N. Global Compact and the World Wildlife Fund to work with businesses on climate-change issues.
So is Walmart walking the walk, or just talking the talk? After all, “greenwashing” -- or misleading consumers about a product or service’s environmental friendliness -- isn’t uncommon. But big-box retailers are likely a better choice, since they tend to be scrutinized closely by the public and have stronger control of their supply chain, according to a study from consulting firm TerraChoice.
“We want to make sure Walmart is a company that our associates and customers are proud of - and that we are always doing right by them and by the communities they live in,” McMillon said in a statement. “That’s really what these commitments are about. And that’s why we’re so passionate about them.”
