Impact of Global Growth on Carbon Emissions - Case Study Example

?Corporate Social Responsibility and Wal-Mart Company Executive Summary Wal-Mart has for a long time tagged itself as a competitive player in the retail market. Without missing words, the company has seen an ever improving success in its corporate performance. Indeed, the company’s success is closely related to its challenge to "broaden and accelerate". Happily, the quest to broaden and accelerate does not only reflect in profit margins for the company but in the delivery of corporate social responsibilities as well. It is for this reason that the company has stated emphatically that “over the past year, our company has delivered on my challenge to "broaden and accelerate" our commitment to sustainability” (Duke, 2011). As a matter of fact, corporate social responsibility cuts across several sectors of society and of a company though it has mostly been mistaken to be the benefit that society alone gets from a company. To a large extent, “Corporate social responsibility is about how businesses align their values and behavior with the expectations and needs of stakeholders including suppliers, communities, regulators, special interest groups and society as a whole” (CSR Network, 2011). Wal-Mart has been guided by this realization to ensure that social satisfaction is created not only for customers and investors but also to all other leading stakeholders. Specific mention can be made of some of milestones reached in the corporate responsibility business for Wal-Mart. To show integration of the social responsibility commitment, Wal-Mart has matured from a stage where corporate social responsibility was seen as a philanthropic add-on to a level where its corporate social responsibility pivots around “responsible consumption" and creation of "shared value”. The company has for instance continued to deliver everyday low prices to customers in response to threat of scarcer natural resources and higher energy and commodity costs facing the ordinary consumer today (Duke, 2011). Again, the company has focused on energy efficiency “through cutting-edge technologies, such as LED lighting systems, thin-film solar and hydrogen fuel cell-powered forklifts” (Duke, 2011). Indeed, these are integrated socially responsible measures that the company has served society with and continue to deliver more. This report seeks to elaborate on the Wal-Mart's Sustainability 360 approach. Wal-Mart's Sustainability 360 approach (The Slow Greening of Wal-Mart) Carbon emission has been identified to have adverse effect on humans and other living organisms. It also has unfavorable effects on other non-living components of the environment and threatens an ill-resourced future. In a report by PwC in advance of the Stern Review report published in the UK on 30 October 2006, it was documented that the effect and result of carbon emission could be more than doubling by 2050 (PwC, 2006). In most cases, when calls for carbon emission reduction are made, accusing fingers are quickly pointed to manufacturers and industrialists. One may therefore think that Wal-Mart has taken up carbon emission campaign because the company is a retailer and not directly involved in carbon production. This argument is however not justified because as a retailer, Wal-Mart deals directly with manufacturers and producers and therefore has every moral authority to campaign for a greening environment. Wal-Mart therefore targeted carbon emission as one of the component aspects of the Wal-Mart Sustainability 360 project in a program dubbed Slow Greening. In the Slow Greening Project, the company’s target is its suppliers as Roner (2007) notes that “the company’s suppliers will now be asked to measure and report the energy used to make and distribute its products.” This means that the Slow Greening Project is dedicated to both carbon emission reduction and energy efficiency and therefore very suitable for the Sustainability 360 Project. In championing the campaign, the symbol has been associated with the Slow Greening. The symbolism here is that there is a footprint that has been created and this foot print is a carbon footprint; thus the black color and so all should follow the footprint. The overall symbol of the Sustainability 360 Project was given as represented below. Results from the initiative have been very encouraging. Rigt from the beginning, the project was guided by three major goals which were: • Be supplied 100 percent by renewable energy; • Create zero waste; and • Sell products that sustain our resources and the environment (Wal-Mart, 2010). The initiative started on a pilot basis where Wal-Mart announced in late September of 2007 to start with about 30 interested suppliers in seven product categories namely soda, beer, soap, toothpaste, DVDs, vacuum cleaners and milk (Roner, 2007). The pilot program demanded that all the 30 suppliers calculate and report their greenhouse gas emissions to the company and by extension, to the world. Leading on, the company collaborated with the Carbon Disclosure Project to decode the information on energy-consumption received from the suppliers into greenhouse gas emissions numbers to make quantitative analysis and interpretation of data easier. The project was then expanded to raise sustainability awareness among consumers in their daily consumable behavior. Even at the early parts of the project, the company started receiving end of success stories from across the United States and associates on how they were saving money on their electricity bills, eating more healthy foods (Kistler, 2007). By 2010, the company made the following success summaries of the Wal-Mart's Sustainability 360 project: In China, there has been 24% Reduced Energy Consumption expected in existing store. In the USA, there has been 60% fleet efficiency 5.1% decrease in GHG emission in China Global record of 5% efficiency increase in 119 stores. Completed the achievement of the goal stated as “all jewelry packaging in the U.S. will be made more sustainable and we will convert all jewelry pallets and boxes to recycled materials by 2010.” Redirected more than 64% of all solid waste from U.S stores and Sam’s Club location. Testing new technologies in China to cut water use in all of its stores by half by 2010 Plastic bag waste reduced globally by 16.1% Reduced water waste in Mexico by 7.6% (Source: Wal-Mart, 2010) There remain several successes that have not been captured above but reported in the Wal-Mart Progress Report (2010). Importance of the CSR of Wal-Mart Whenever corporate social responsibilities are taken by large companies such as Wal-Mart, there are enormous benefits that are achieved. In this report, the importance of the corporate social responsibility shall be judged in accordance with a research conducted by the Economic Intelligence Unit (2005). The conclusion of the research gives the aspects of corporate social responsibility that are most important to stakeholders. Two stakeholders were considered and these are executives and investors. The most important layouts selected by the stakeholders shall be reviewed and compared to Wal-Mart’s CSR to see if Wal-Mart’s CSR has been that important to stakeholders and by extension, society. The responses from the research by the Economic Intelligent Unit are given below: Source: Economic Intelligence Unit (2005). From the research and according to the Economic Intelligence Unit (2005), stakeholders cherish corporate social responsibilities that address issues of compliance to law and regulations and application of recognized standards more that any other issues. Judging with the Wal-Mart Sustainability 360 Project, it can be seen that the project was instituted in accordance with existing national laws and regulation on the protection of the environment. The project was also set for the protection of the environment through the reduction of carbon emission and conservation of energy because of the need to apply recognized standard in the use of energy and in carbon emission. To a large extent therefore, the Wal-Mart Sustainability 360 project met the aims of stakeholders and was therefore highly important in addressing their needs. It is even good to note that apart from the first two highest ranked benchmarks, the project also achieved all of the other minor benchmarks such as actual activities in environmental, philanthropic, ethical and social areas and creation of market reputation for corporate responsibility. Public and Media Analysis of the Wal-Mart's Sustainability 360 approach The public and critics are full of praise for the initiative taken by Wal-Mart. Particular admiration is given to the success rate of the company. This is because by and large, the company has achieved over 82% of its total set goals (Wal-Mart, 2010). There however remain critics who have pointed to a number of flaws and areas for improvement. Roner (2007) is particularly worried that at the initial stages of the project, the company shielded lot information on how it was going to assess the achievement of its goals from the public. Particularly with the collection of information on the carbon emission rate of production from suppliers, critics argue that the company did not come clear on what the information was going to be used for at the beginning. It was reported in the public and media therefore that “The question on both critics and supporters minds is: what will Wal-Mart do with the information?” (Roner, 2007). Finally, there are those who worry about the timing of the project. To these critics, Wal-Mart could have done more before the Hurricane Katrina incident. It is for this that it is reported that “Wal-Mart’s sudden change of heart is apparently part of a somewhat personal epiphany for Scott that began with the events of Hurricane Katrina, which he now calls “a key personal moment”” (Roner, 2005). The Way forward with CSR at Wal-Mart The report considered so far points to the fact that the company has indeed achieved a lot with the Wal-Mart's Sustainability 360 approaches. The memo would therefore be concluded with workable recommendations for the redirecting the efforts of corporate social responsibility at Wal-Mart. The recommendations are given as follows: 1. The company a whole department that will be responsible for branding, promoting and ensuring the delivery of the company’s future corporate social responsibilities. Such creation of a separate outfit will allow for strict monitoring and implementation of programs. 2. Corporate social responsibilities for the company should be given strategic timelines where by there will be three major time frames namely short time, medium term and long term. These timings would make the assessment of the achievability goals set very easier. 3. External peer review assessment programs should be designed for the company’s corporate social responsibility agenda. Such external peer reviewing system would allow for a more transparent way of assessing the progress of the company’s corporate social responsibility programs and the impact it is making to society. 4. The selection of corporate social responsibility programs should be guided mainly by public participation. This is to say that the company’s customer relationship program should be channeled in such as way that more contributions should be taken from customers on the kind of social interventions they expect from the company. 5. Future corporate social responsibility programs should be directed more on personal impacting agenda of people such as health and disease. This is because these are short term imparting agenda that society most adores. Even though programs like reduction of carbon emission may be advantageous, their benefits are long term and may not be immediately appreciated by society. Conclusion to the CEO, CFO and Human Resources Director Thank you for your consideration. Please reply to my memo with your comments by October 20, 2011. If you decide that my proposal is a valid opinion, I would like to present it at the coming board of directors meeting on October 30, 2011. REFERENCE LIST CSR Network, What is CSR? 2011. Web. October 10, 2011 Duke M. Message from Duke Mike. 2011. Web. October 10, 2011 Read More