(Wal-Mart Stores Inc.: Beijing, China) -- Wal-Mart Stores Inc. took the next step in its sustainability journey by hosting an unprecedented gathering of more than 1,000 leading suppliers, Chinese officials, and nongovernmental organizations (NGO) in Beijing, China. Wal-Mart outlined a series of aggressive goals and expectations to build a more environmentally and socially responsible global supply chain.

“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,” says H. Lee Scott, Jr., president and CEO of Wal-Mart Stores Inc. “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.”

The company will focus on areas aimed at meeting or exceeding social and environmental standards, driving innovation, and efficiency and building stronger partnerships with suppliers, government, and NGOs.

On the environment, the Chinese government has set strong goals for sustainability. Wal-Mart and the Administrative Center for China’s Agenda 21 of the Ministry of Science and Technology signed a Memorandum of Understanding that will serve as an example of a partnership that benefits both industry and government. Wal-Mart China will also reach beyond its own operations to engage customers and suppliers and form partnerships with governmental organizations and NGOs.

At the summit, Wal-Mart laid out a series of requirements for companies who want to do business with Wal-Mart. These requirements include:

• Required demonstration of compliance with environmental laws and regulations. China’s desire for a cleaner environment is clear. Wal-Mart is taking a number of steps to further strengthen and enforce supplier compliance with environmental and social standards, including the creation of a new supplier agreement that will require factories to certify compliance with laws and regulations where they operate along with rigorous social and environmental standards. The agreement will be phased in beginning with suppliers in China in January 2009 and expanding to suppliers around the world by 2011.
• Partner with suppliers to improve energy efficiency and use fewer natural resources. Wal-Mart will partner with suppliers to improve energy efficiency by 20 percent in the top 200 factories in China it sources from directly by 2012. The company will share information and best practices with all of the factories it sources from as well as its competitors.
• Higher standards of product safety and quality. Wal-Mart aims to drive returns on defective merchandise out of existence by 2012.
• Greater transparency and ownership. By 2009, Wal-Mart will require all direct import suppliers plus all suppliers of private label and nonbranded products to provide the name and location of every factory they use to make the products it sells. The company will also have all suppliers it buys from directly to source 95 percent of their production from factories that receive the highest ratings on environmental and social practices by 2012.

Wal-Mart also announced a major effort to make Wal-Mart China a leader in sustainability in China by committing to make its stores more sustainable. The company will design and open a new store prototype that uses 40 percent less energy and will reduce energy use at existing stores by 30 percent by 2010. In addition, during the next two years, Wal-Mart China will aim to cut water use in all of its stores in half by investing in new hardware and systems and developing best practices that will help its associates and stores use water more efficiently. The company also pledged to bring more environmentally sustainable products to its store shelves.

Wal-Mart China President and CEO Ed Chan also addressed the need for collaboration between Wal-Mart, the company’s suppliers, and the Chinese government. “Few challenges in our world today are more pressing than protecting the environment and, in China, Wal-Mart has a unique opportunity to lead,” says Chan. “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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