Wal-Mart vows stringent enviro and safety requirements in China (10/23)
At the Summit, Wal-Mart laid out a series of requirements for companies who want to do business with Wal-Mart. In a press statement, Wal-Mart said these requirements include:
Required demonstration of compliance with environmental laws and regulations. Wal-Mart is taking a number of steps to further strengthen and enforce supplier compliance with environmental and social standards, including the creation of a new supplier agreement that will require factories to certify compliance with laws and regulations where they operate as well as rigorous social and environmental standards. The agreement will be phased in beginning with suppliers in China in January 2009 and expanding to suppliers around the world by 2011.
Partner with suppliers to improve energy efficiency and use fewer natural resources. Wal-Mart will partner with suppliers to improve energy efficiency in the top 200 factories it sources from directly in China by 20 percent by 2012. The company will share information and best practices with all of the factories it sources from as well as its competitors.
Higher standards of product safety and quality. Wal-Mart aims to drive returns on defective merchandise virtually out of existence by 2012.
Greater transparency and ownership. By 2009, Wal-Mart will require all direct import suppliers plus all suppliers of private label and non-branded products to provide the name and location of every factory they use to make the products it sells. The company will also have all suppliers it buys from directly to source 95 percent of their production from factories that receive the highest ratings on environmental and social practices by 2012.
Wal-Mart also announced it will design and open a new store prototype that uses 40 percent less energy and will reduce energy use at existing stores by 30 percent by 2010. In addition, during the next two years, Wal-Mart China will aim to cut water use in all of its stores in half by investing in new hardware and systems and developing best practices that will help its associates and stores use water more efficiently.
The company also pledged to bring more environmentally sustainable products to its store shelves.
Wal-Mart China President and CEO Ed Chan addressed the need for collaboration between Wal-Mart, the company’s suppliers and the Chinese government. "Few challenges in our world today are more pressing than protecting the environment and, in China, Wal-Mart has a unique opportunity to lead," said Chan. "With the world’s largest population, and a robust manufacturing industry, no market presents a greater opportunity for environmental sustainability to take hold than China."
On the environment, the Chinese government has set strong goals for sustainability and Wal-Mart is aligned with those goals. Wal-Mart and the Administrative Center for China's Agenda 21 of the Ministry of Science and Technology signed a Memorandum of Understanding that will serve as an example of a partnership that benefits both industry and government. Wal-Mart China will also reach beyond its own operations to engage customers and suppliers and form partnerships with government and NGOs.