Wal-Mart Expands Leadership On Energy Efficiency, Ethical Sourcing And Health Care

In a speech to more than 7,000 managers at the annual kick-off meeting for its U.S. stores, Wal-Mart Stores, Inc. president and CEO Lee Scott today said the company would continue to demonstrate leadership and work for change on major issues important to Wal-Mart’s customers, communities, associates and suppliers worldwide.

“It is important for all of us to understand that there are a number of issues facing the world that will profoundly affect our lives and our company,” Scott said. “I am talking to you about issues like international trade, climate change, water shortages, social and economic inequities, infrastructure and foreign oil. Wal-Mart can take a leadership role, get out in front of the future, and make a difference that is good for our business and the world.”

Building on the vision laid out in his October 2005 Leadership in the 21st Century speech, Scott pledged that the company would take action on energy efficiency, ethical sourcing and affordable health care.

Wal-Mart sees the impact that rising energy costs have on customers who must choose between filling their gas tanks or buying food and medicine. In the coming months and years, the company will work to extend its mission of saving people money so they can live better to help customers use less energy and spend less on energy.

Every major company is faced with the difficult challenge of ensuring that the products they buy from outside suppliers are made well and made right. Today, Wal-Mart is working to lead an effort by major global retailers to create common social and environmental standards for suppliers. The company will also require all of its suppliers to meet specific environmental, social and quality standards and it will make compliance with those standards part of its contracts.

On health care, Wal-Mart sees many opportunities to make a difference for both associates and customers -- because what Wal-Mart does best is exactly what the U.S. health care system needs the most: affordability, accessibility, efficiency and a genuine desire to work together for positive change. That’s why in the coming months, Wal-Mart will be taking action to help drive down the cost of health care, increase the number of electronic prescriptions and promote the use of electronic medical records.

“Leadership is not about looking over your shoulder and living in the past. It is about looking over the horizon and envisioning the future,” Scott said. “What began 27 months ago as a commitment from the top of our company, is now a commitment from the heart of our company.”

Energy Efficiency

In the speech, Scott laid out a new company-wide goal to work with suppliers to make the most energy-intensive products in Wal-Mart stores, anywhere in the world, 25% more energy-efficient within three years. He also discussed how rising energy costs are hurting Wal-Mart customers around the world, and how the company is well-positioned to make a difference in energy use for individuals and their communities.

“What if we extended our mission of saving people money so they can live better -- to saving people money on energy?” Scott asked. “We believe we can do this. Wal-Mart can help our customers use less energy and spend less on energy. This will also help every country where we operate reduce their dependence on foreign oil.”

Scott went on to say that going forward, Wal-Mart will work with suppliers to make the products on its shelves more accessible, more energy efficient and more affordable. He also said the company would take the lead on informing customers about the energy required to make and use more energy-intensive products.

“Taking waste and non-renewable energy out of our supply chain reduces the amount of pollution and greenhouse gases our suppliers send into the atmosphere,” Scott said. “And helping our customers buy more sustainable products and be better stewards of the environment reduces their own carbon footprint. This is something that I think all of us can be proud of.”

Global Sourcing:

Scott also announced that Wal-Mart will launch a major, retail-industry effort to improve social, ethical and environmental standards in the supplier factories that the company sources from. He reminded the managers that Wal-Mart’s customers want products that are made in a socially, ethically and environmentally responsible way. The company also recognizes that the challenges related to global sourcing are larger than Wal-Mart and require a larger effort.

That’s why, Scott went on to say, Wal-Mart will be working with CIES, the leading global retail and consumer goods network and a number of other global retailers to achieve this goal. He also called on all major global retailers to join Wal-Mart and CIES in its effort and pledged to meet with CEOs of the company’s competitors to make socially and environmentally responsible sourcing a reality across the entire retail industry.

“Our customers want products that make them feel good about their purchases,” he said. “They want to walk into our stores and be confident that the products on our shelves are safe and durable. They also want products that are made in a way that is consistent with their own personal values.”

Scott said Wal-Mart will focus on requiring suppliers to meet specific environmental, social and quality standards; certifying and ensuring supplier compliance with social and environmental standards; and favoring -- and in some cases even paying more -- to suppliers that meet the company’s standards and share its commitment to quality and sustainability.

Affordable Health Care

Over the last two years, Wal-Mart has made significant improvements to its health benefits and launched its game-changing $4 prescription program in the United States, Mexico, Puerto Rico and Brazil. And just this week, the company announced that its improved benefits have helped more Wal-Mart associates get health insurance this year.

“But we have more opportunities to make a difference in health care for both our associates and our customers,” Scott said.

Wal-Mart is going to focus next on e-prescribing, electronic health records and helping employers better manage their pharmacy benefit programs.

“We think we can even do more with prescription costs,” Scott said. “Our approach will be based on taking out unnecessary costs while providing high quality health care products and services. We also believe we can help with how prescriptions are filled. We will partner with doctors and other providers to increase the number of electronic prescriptions in the U.S. And, we will provide electronic health records to United States associates and their family members – including retirees – by the end of 2010.”