Sustainable Management Futures: PART B

Corporate Social Responsibility is considered to be one of the central themes for global business. CSR is the concept of organizations initiating, promoting and participating in social programmes to deal with social issues. The first definition of CSR was given by Howard R Bowen who is considered to be the Father of Corporate Social Responsibility. According to Bowen, CSR is the obligations of businessmen to pursue those politics, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society (Bowen, 1953). According to Baker, CSR is about creating a positive impact on the society through socially responsible business processes and operations. The UK government too has their views on CSR. They view CSR as the contribution of business towards the sustainable development goals.

All depends on business and how it manages its social, economic and environmental impacts so that they maximise the benefits to its stakeholders (Gov, 2004). What is sustainable development? The concept of sustainable development was first introduced by the World Commission on Environment and Development in 1987 also known as the Brundtland commission. By the commissions definition, sustainable development should meet the needs of the present generation without compromising the ability of future generations ability to meet their own needs and requirements.CSR and Sustainable Development are related to each other. A strong CSR policy is the key for an organization to attain sustainable development.

This part is an analysis on the CSR activities and behaviour of Wal-Mart, the worlds largest grocery retailer in its home country as well as overseas operations.

Triple Bottom Line, coined by John Elkington, is one of the new theories of Sustainable Development. This theory suggests that business must consider not only the economic bottom line of prosperity and profit but also other bottom lines like environmental efficiency and social efficiency. TBL consists of three Ps: Profit, People and Planet. The economic component refers to the long term financial performance of organization. The logic is that without financial performance, sustainability cannot be achieved. However, the meaning is not just simple short-term financial results, but creating long-term value through environmental and social efficiency in addition to economic efficiency (Galea, 2004).The figure 1 illustrates the Triple Bottom Line approach for business organizations. 1

Source: (Galea, 2004) Wal-Mart has made sustainability an essential business strategy. It has a strong triple bottom line which not only focuses on economic efficiency but also environmental and social efficiency (Trevino & Nelson, 2010).According to Scott Price, CEO of Wal-Mart Asia, CSR must be an integral part of business strategy to be successful and sustainable. During APEC CEO Summit held at Yokohoma, Japan 11-14 Nov 2010, Price commented that CSR has become such an important part of Wal-Marts business strategy that no one hear about the term CSR at Wal-Mart (csrdigest, 2011).

Triple Bottom Analysis of Wal Mart

Planet Wal-Mart has made stringent effort to safeguard the planet by working to reduce greenhouse gas emissions and energy usage. The long term goal of Wal-Mart is to reach a day where the entire energy is derived from renewable sources. It aims to attain global efficiency through a localised approach. To achieve the goal of zero waste, Wal-Mart is closely working with their associates and suppliers all over the world. They focus n 3 Rs- Reuse, Reduce and Recycle. They claim that in 2010, they succeeded in reducing the plastic bag waste across the globe by 47.95 million pounds, 21% reduction compared to 2007. In the same year, their ASDA operations recycled 165097 tonnes of cardboard, converted 1431 tonnes of oil to bio fuel. The company has also made significant progress in their Zero Impact Program as 53% of waste generated by the Wal-Mart Brazil operations from January to September operations are no longer dumped to landfills. Wal-Marts Sustainability 360 2

program engages 100000 suppliers, 2 million associates and 100 million customers across the globe to reduce environmental impacts (Wal-Mart, 2012). People According to Scott Price, CEO of Wal-Mart Asia, CSR efforts must impact the people, be able to address the long term issues related to business. Wal-Mart has focussed on a few global platforms which include education, economic development and empowerment, health and nutrition and sustainability. Wal-Mart foundation is a wing of Wal-Mart retail store which plays a tremendous role in addressing various issues faced by the human beings. In 2010 Wal-Mart foundation donated 1.5 USD to the Haiti including food, blanket and face mask. As a part of curbing the poverty Wal-Mart donated 2 million USD to help 16 food banks by giving efficient way to preserve food for long. Wal-Mart is collaborating with government in order to expand their effectiveness in the operation in alleviating the hunger (Wal-Mart, 2010) . Each country has its culture and social set up. Wal-Mart adopted a flexible approach to be relevant locally. Wal-Mart announced Sustainable Agriculture Program to make a big impact on the local communities, local economies and families. They will train farmers in emerging markets and work closely with them to increase their income through sourcing. These efforts of the company indicate that they are concerned about the people. Prosperity Undoubtedly, Wal-Mart is one of the very few companies that remained recession proof during the global economic crisis 2008. The company is using its expertise in sustainability to reduce managing cost and promote long-term prosperity. By integrating Sustainable Value Networks into business practices, Wal-Mart reduces managing cost and the benefits are passed on to consumers in the form of low price. For instance, Latin America is a key region for Wal-Marts future growth. The company opened its first store in Latin America 20 years before and the implementation of sustainable practices across Latin America has helped the company to attain revenue of $36.6 billion in the fiscal year 2010 (greenretaildecisions, 2011). Wal-Mart has bagged numerous awards in the area of sustainability. In 2011, Sustainability, the London based firm ranked Wal-Mart as one of the global leaders in Sustainability (environmentalleader, 2011). Wal-Mart is one of the finalists for the Corporate Stewardship presented by US. In India, Wal-Mart was selected as the company of the year 2010 for CSR initiatives. In UK, Wal-Mart bagged the ECR UK Award for Sustainable Distribution. The

company has won similar awards in almost every region of its operation which shows that Wal-Mart has a strong bottom line of economic, environment and social efficiency. However, Wal-Mart has faced considerable criticism over the past for exploitation of workers, unfair workplace practices, inadequate health care and the retailers antiunion stance. Nearly 5000 lawsuits are filed against Wal-Mart each year

(Workplacefairness, 2006). Wal-Mart was built on the principles of low price but many argue that this low price comes at the expense of their workers who are paid below the minimum standards. In 2005, the International Labour Rights filed a case against Wal-Mart for violating labour laws in foreign countries (Barbaro, 2005). Wal-Mart was fined $ 135540 for violating child labour laws between 1998 and 2002 (Workplacefairness, 2006). Similarly, Wal-Marts sustainability programme forcing the manufacturers across the globe to reduce their environmental impact has raised criticisms by international labour and civic organizations for being unsustainable (ElAmin, 2007). According to a report from the Institute for Local Self-Reliance, Wal-Marts sustainability program has the effect of improving the companys image rather than really supporting the environment. The report commented that Wal-Marts energy efficiency and renewable projects are too modest compared to their size of operations.

Despite its considerable efforts in attaining environmental and social efficiency, the company has been criticised heavily for their negative impact on the environment as well as community at large. According to Sierra Club, one Wal-Mart centre uses the same energy equivalent to 1095 US households do in a single day. All these criticisms have a negative impact on the bottom line of the company (Kurtzleben, 2012) According to Mike Duke, the President and CEO We have worked especially hard on the social aspects of sustainability. We know we can play such a positive role in communities around the world. And if we are going to be at our best as a business, we have to recruit, develop and retain the best people and leaders. With its Sustainability 360 and Sustainable Value Networks, Wal-Mart is expected not only to attain overall sustainability but also to do justice to its stakeholders.

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