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Wal-Mart to Press Its Manufacturers

The company's CEO says suppliers will be held more accountable on environmental issues.

October 21, 2005|From Associated Press

FAYETTEVILLE, Ark. — Wal-Mart Stores Inc. will start holding its suppliers more accountable for environmental and social standards at foreign factories as public expectations in the United States rise, Chief Executive H. Lee Scott Jr. said.

Scott told suppliers at a business conference Thursday that the public had high expectations of the world's largest retailer. Wal-Mart has come under mounting fire from its critics over issues including the environmental and labor standards of low-cost foreign manufacturers from which it buys.

Scott said Wal-Mart would be more involved in its suppliers' businesses to make sure they were accountable. The company will work with them to find new products that meet demand for higher standards, such as new clothing lines made from organically grown cotton that Wal-Mart plans to sell next year.

"Are you running your factories in a way that promotes environmental sustainability? Are you sourcing from people that causes there to be inclusion and opportunity for women and minority-owned businesses?" Scott said. "You'll see Wal-Mart taking a stronger stand over the next several months in these areas," he told a conference on retail trends held by the University of Arkansas' Sam M. Walton College of Business, named after the company's founder.

Paul Blank, director of Wake-Up Wal-Mart, backed by the United Food and Commercial Workers Union, was not impressed, issuing a statement: "Unfortunately, Wal-Mart's exploitation of workers is not limited to its use of sweatshop labor overseas. Our campaign is building a sea of public pressure to force Wal-Mart to end its race-to-the-bottom business model."

Scott said he would fly to Shanghai on Wednesday to visit Wal-Mart's fast-growing store operations in China.

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