“Sustainable Walmart” = Oxymoron Defined

In its very essence, Walmart is the epitome of an unsustainable organization.  Like any big box store, Walmart’s are traditionally located off the beaten track where they are built on cheaper real estate, thus the very act of consumers driving to a Walmart to shop is one of many illustrations of unsustainability. It’s like the “Outlet Mall Fallacy” – by the time consumers factor in their time, gas, wear and tear on their vehicle, and so on, is it really worth it to go all the way to Walmart to shop?

Plagued by critics condemning them for poor employee practices, perpetuating labour violations among suppliers, and similarly negative sentiments, Walmart is a company used to controversy. When they rebranded, changing the company name from Wal-Mart to Walmart and developing a refreshed colour scheme and logo design, Walmart introduced a new sustainability commitment.

Sustainable Walmart – Am I the only person who finds this oxymoronic?

As a large corporation, Walmart has a significant sphere of influence. Consequently, I believe they have a correspondingly large responsibility to demonstrate sustainable and positive behaviours. Walmart seems to be addressing this from a triple bottom line perspective: the economy, the environment, and the society. But what implications will these measures have for Walmart stakeholders, particularly consumers and suppliers?

Consumers don’t shop at Walmart because it’s sustainable; in fact, in a survey I conducted two years ago, respondents overwhelming agreed they didn’t actually care if Walmart was sustainable. This leads me to question why Walmart bothered introducing these sustainability measures, particularly as Sam Walton’s original approach was solely on a low-price focus: “Always low prices. Always.” The most logical conclusion I can draw is that it has to do with proactively making changes so that regulatory changes have a reduced negative impact on the corporation and their image. That, and it’s a great way for Walmart to improve their image.

Walmart’s “Responsible Growth” Advertisement

By introducing measures such as the Supplier Sustainability Index, Walmart is putting top-down pressure on suppliers to enhance practices to incorporate greater efficiency and sustainability. On the flip side, the very nature of Walmart’s supply structure demands quick turnover and response time by suppliers; in order to meet Walmart’s steep demands, suppliers have often cut corners in areas like employee well-being and health standards. Nonetheless, this increased pressure on suppliers is likely to result in changes throughout the entire commodities sector.

Historically, Walmart’s activities and efforts have had a domino effect on the economy and business practices; the same will likely be true as Walmart continues to reinforce their commitment to triple bottom line sustainability. One thing is clear: Walmart’s current strategy transcends founder Walton’s initial strategy of focusing almost solely on low prices; the company is demonstrating a greater commitment to the “how” rather than just the end product. Despite the significant discourse faced by Walmart, they are becoming progressively harder to hate as they address many of the areas and business practices long condemned by supporters and critics. As writer Lloyd Alter aptly stated, “The Wal-Mart Effect may yet do for the environment what it did for the American economy, which was to affect us all, whether we shopped there or not.”

Proactivity: The Key to Responsible Leadership

Corporate Social Responsibility. We hear about it every day, whether in school, in the media, in life, or some other outlet. I believe CSR is relevant to discuss in the context of sustainability because it guides a corporations entire approach to the triple bottom line: the society, the economy, and the environment. It is intended that a corporations actions are in-line with the CSR strategy. There is considerable debate regarding the motivations for different CSR strategies, arguing about whether they’re done as spinning, green harvesting, or green washing or something else altogether. And there is yet another argument surrounding whether or not the reason even matters so long as the actions are being taken. However, I would personally argue that regardless of the motivations, true CSR that demonstrates leadership and responsibility must be proactive.

The case of the BP oil spill presents an ideal platform upon which to build my argument that proactivity is fundamental to true responsible leadership.

In 2010, BP was responsible for one of the worst man-made environmental disasters of the century: an oil spill in the Gulf of Mexico. After the incident, internal documents revealed that BP was aware of serious safety issues on the Deepwater Horizon rig earlier in the year. Evidently, BP chose not to heed the warnings of their engineers and specialists, instead proceeding with operations. We are all aware of the severe resulting negative impacts on the environment, the economy, and the society.

BP’s crisis management of the event was undeniably problematic. Among these issues, BP’s CEO Tony Howard complained publicly that he “wanted his life back.” This was understandably poorly received by society, who was now dealing a negative externality that was arguably the result of negligence and greed.

If we instead compare this to Tylenol’s 1982 cyanide poisoning crisis, I am better able to illustrate the comparative value of proactivity. While many predicted Tylenol would never regain market share; through a crisis management approach involving proactivity, transparency, and communication – all things we learned in the simulation to be highly relevant in CSR – the brand did indeed regain market share. Tylenol immediately removed their product from shelves, accepting public responsibility for the tampering, and communicating with the public and press proactively.

Conversely, in the case of BP not only did they fail to truly accept responsibility – attempting to blame the workers, the engineers, and the equipment manufacturers – but they also neglected to proactively prevent the crisis in the first place. I would argue that even if BP had leveraged a similarly strong crisis management strategy, they still could not be classified as responsible leaders.

A true demonstration of BP as responsible leaders would have involved proactively halting function of the Deepwater Horizon rig until safety had been improved. What are you opinions of proactive responsible leadership? Is it enough to proactively respond to a crisis to be considered responsible leaders?