Can Walmart (and Other Mega-Corporations) Do Good?

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Jeffrey MacMillan / Washington Post / Getty Images

Alaska state officials are hosting Walmart executives in the state capital this week in an effort to resolve a months-old dispute over Alaskan salmon fisheries’ sustainability credentials.

The seeds of the quarrel were planted in 2012 when several Alaskan fisheries decided to end their relationship with the Marine Stewardship Council–the preeminent global certifier of sustainable fishing–to seek out other means assuring customers of their sustainable practices. But last June, Walmart told Alaskan fisheries that it would not be buying salmon sourced from fisheries not certified by the Marine Stewardship Council.

Now Walmart is caught between two forces–Alaska fisheries and “buy American” enthusiasts who think the company’s first responsibility should be to American industry, and environmentalists who think Walmart should make as strong a commitment to environmentally sustainable industry possible.

But from a broader perspective, this latest kerfuffle is an object lesson in why the concept of corporate responsibility is flawed to begin with. Walmart–like most successful corporations–is pretty good at offering products their customers want at low prices. When it tries to promote broader public goods, like a clean environment, or lower unemployment for veterans, it’s nowhere near as successful. Here’s a few of Walmart’s more notable corporate-responsibility snafus:

The Buy-American Debacle: Walmart’s first major corporate responsibility push was an effort in the 1980s to promote American-made products. But the campaign ran aground after a Dateline-NBC investigation revealed that the company was actually selling products manufactured in Bangladesh as “Made American.”

The Going Green Campaign: In 2005, Walmart embarked on a sustainability campaign aimed at making the retail giants operations much more environmentally friendly. Though Walmart and the media have done much to raise visibility of these efforts, the actual results have been lacking. According to a recent report from the Institute for Local Self Reliance, Walmart’s sustainability campaign is much more focused on making its operations appear green to customers than it is about doing things that would actually help the environment, like reducing emissions.

Hiring Veterans: In January of last year, Walmart received praise from luminaries like First Lady Michelle Obama for a pledge to hire 100,000 veterans over five years. As I pointed out at the time, however, due to Walmart’s massive hiring needs, hiring 20,000 veterans per year is actually not an example of a concerted to reduce the unemployment rate in that population:

Walmart employs 1.3 million sales associates in the U.S. and claims an average annual turnover rate of 37%. At that rate, the company has to hire some 480,000 sales associates in the U.S. per year. If Walmart ends up hiring 100,000 veterans over five years, or 20,000 per year, that would account for only 4.2% of its total hiring. But according to the Veterans Administration and the Labor Department, veterans make up 9.3% of the civilian working population. To actually make a dent in veteran unemployment, Walmart would have to increase its annual hiring of veterans to 65,000, or 325,000 over five years — and hope other employers in the U.S. adopt similar hiring policies.

These examples are not exactly the blight on Walmart they seem. In reality, these examples simply show that one can’t realistically expect corporations to behave in a way that is counter productive to making profits.

But that doesn’t mean that the goals of reducing emissions, fishing sustainably, or reducing unemployment aren’t achievable. It’s just that the corporate structure isn’t our best means of achieving them — government is. Government is the institution that is best at enforcing broad short-term pain (like taxes) in order to reap long-term rewards (like a national highway system or an improved environment). And Government is the institution through which we can resolve disputes between irreconcilable foes (like those between between environmentalists and industrialists).

Walmart makes the world a better place to live by selling a wide variety of products at super cheap prices. But even as big and powerful as Walmart is, there are problems, like the sustainability of the fishing industry, which it will never solve.

5 comments
patrick_maloney
patrick_maloney

"And Government is the institution through which we can resolve disputes between irreconcilable foes (like those between between environmentalists and industrialists)"... well, in this case the (Alaska) government is biased towards the local industry compromising the availability and sustainability of Alaska salmon for future generations...

Walmart
Walmart

At Walmart, we respectfully disagree with the premise of Mr. Matthews’ article. For us, taking on large social issues is compatible with building a stronger business. We’ve been successfully operating this way for nearly a decade and we have a strong record of working with government, stakeholder NGOs, local communities, our customers, and even our critics.

When it comes to sustainability, we are using our size and scale to make a positive difference by finding solutions to the most pressing sustainability issues and saving money for our customers at the same time. This is not just talk; our sustainability goals run deep within our company.

Here are a few examples: Every merchandise buyer’s annual objectives call for progress in sustainability.  We’ve reduced GHG emissions by 3 million metric tons, or 20 percent, since 2005 from our existing locations. We’re the largest onsite green power generator in the U.S., according to the EPA Green Power Partnership, and have more installed solar capacity than any other company, according to the Solar Energy Industries Association (SEIA).

In addition, we’ve proudly sourced salmon from Alaska for many years and will continue to do so. We’re currently working with a variety of stakeholders, including government and NGOS, as we always do, to ensure sustainable seafood is available for future generations.

Regarding veterans, Mr. Matthews’ characterization of our hiring commitment isn’t entirely accurate. Rather than a commitment to hire 100,000 veterans, we promised to offer a job to any honorably discharged veteran within his or her first 12 months off active duty. We estimate that this will result in hiring more than 100,000 veterans over the next five years—but it could certainly be more. This commitment began on Memorial Day and since then we have hired nearly 30,000 veterans.  We also have a number of programs in place to recruit and hire veterans who have been out of the service for more than 12 months.

The author is absolutely right that no company can single handedly reduce the unemployment rate of our veterans, which is something we have been transparent about from beginning. When our CEO made the announcement, he challenged other retailers and businesses to make similar commitments to hiring veterans.

At Walmart, we’re proud of our business model. And we will continue to operate this way – being socially responsible while saving our customers money-- not only so they can live better, but so their children and grandchildren can as well.

Dude_who_cares
Dude_who_cares

What, no Repubs attacking the reporter yet about scary big govt. I guess they would rather the walmarts run the world seeing as Walmart and the people who run these giant corporations are just as corrupt as the people who run our govt. But with one small difference, we can vote people in an out of our govt., we don't have a choice who runs Walmart, or to a certain extent how it's run. To answer the burning question is simple. If Walmart can make the share holders money it will help people, if making the share holders money involves hurting people, or the environment then Walmart will hurt people and the environment. It's very simple indeed. Walmart and any big corporation stands for one thing only and that's making share holder money. They could care a less about anything else as history has shown.

SrihariYamanoor
SrihariYamanoor

@patrick_maloney Thank You. One would be quite foolish to rely on the Alaskan Government to do the right thing. The whole thing sounds like a hogwash.