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Wal-Mart Pushes Eco-Goals to Front of China Agenda

Beijing —Wal-Mart has made “building a more environmentally and socially responsible global supply chain” a top-of-list item for its suppliers in China.

Lee Scott, president and ceo of Wal-Mart Stores, Inc., summed up the directive: “Sustainability is about building a better business. We think it is essential to our future success as a retailer — and to meeting the expectations of customers…

“Maintaining the trust of our customers — today and in the future — is tied hand-in-hand with improving the quality of our supplier factories and their products.”

With more than 1,000 in attendance, the Oct. 23 summit was a first-time meeting here of so many Wal-Mart suppliers along with officials from the Chinese government and non-government organizations.

Scott was strident in his remarks, asserting, “I firmly believe that a company that cheats on overtime and on the age of its labor, that dumps its scraps and chemicals in our rivers, that does not pay its taxes or honor its contracts — will ultimately cheat on the quality of its products. And cheating on the quality of products is the same as cheating on customers. We will not tolerate that at Wal-Mart.”

Among the Wal-Mart supplier goals and “Responsible Sourcing” stipulations:

  • Compliance with environmental regulations — starting with China in January and extending worldwide by 2011.

  • Energy-efficient and resource-efficient production, with a goal to cut energy use by 20% among Wal-Mart's top 200 China suppliers by 2012.

  • Product safety, with the goal to “drive returns on defective merchandise virtually out of existence by 2012.”

  • Transparent ownership, with all factories identified and 95% of all production by facilities “that receive the highest ratings on environmental and social practices” by 2012.

Wal-Mart said it will soon open a store prototype in China that is 40% more energy efficient — and will cut energy use 30% by 2010 at all existing stores. Within that time frame, the retailer also plans to cut water use in half at its stores.

“In China, Wal-Mart has a unique opportunity to lead,” said Ed Chan, Wal-Mart China president and ceo. “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.”

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