In my previous post, “Who Is Really Behind the Walmart Sustainability Index? – Part 1,” we began looking at the real reason why Walmart would want to initiate the Walmart Sustainability Index (WSI), an ecological product ranking that the company wants attached to products sold in their stores. To catch you up before you read this post, you may read that previous post by clicking here.
In Part 1, I discussed how I had two theories on who or what is sparking Walmart’s motivation to initiate the WSI. My first theory was that customer demand was the reason behind Walmart initiating the WSI. But in Part 1 we saw that Theory #1 did not hold together. Regardless of what Walmart says, I don’t think it is customer demand that’s the driving force behind the WSI. So, now here in Part 2 of “Who Is Really Behind the Walmart Sustainability Index,” you and I move onto Theory #2.
Theory #2
Premise
As most people know, over the past decade or so, Walmart has been the victim of negative publicity. That the company has been assailed on a public relations front is not exactly proprietary information.
Issues and accusations over: their influence on small-town mom & pop businesses, health insurance benefits for employees, hourly wages, etc. have been well-documented. Then there was that whole Walmarting Across America blogging gaff, a flap that started over a pro-Walmart blog that appeared on the surface to be organic, but turned out to be at least a little less so. After many years of this sort of treatment in the halls of public opinion, Walmart needed some PR wins. Their image had gotten beaten up. Walmart needed a PR image makeover.
Findings
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- Per a post from the Harvard Business Review, in October 2005 Walmart announced that it was embarking on a “sustainability strategy” to “dramatically reduce the company’s impact on the global environment and thus become ‘the most competitive and innovative company in the world.’ “
- According to an article in the Christian Science Monitor (CSM), Walmart began a collaborative relationship with the Environmental Defense Fund (EDF) in 2005. The article said that EDF’s “most intense partnership began in 2005 when Wal-Mart sought out the environmental group for advice on how to craft a better corporate responsibility plan. At the time, the megaretailer was getting lambasted for everything from killing small business to poor personnel management. The relationship grew closer as it shifted to strategy.”
- Also per the CSM article, in 2007 the EDF opened an office in Bentonville, Arkansas which also is the headquarters city of Walmart. The CSM article also quoted Michele Harvey, the EDF corporate partnerships project manager, in speaking of Walmart as saying, ” . . . we have a greater potential to influence the direction they take.”
Discussion
Given the fact that Walmart was being “pasted” regularly in the popular culture, they needed to do something which would allow them to appear as a more “benign” presence within the American landscape. Initiating a sustainability strategy within a larger corporate social responsibility (CSR) program could yield them the softer image that they sought. And “partnering” with a major environmental non-governmental organization (NGO) like the EDF to help implement that sustainability strategy would certainly help Walmart project the image of a large corporate organization that is willing to work with those “defending” the environment, softening the Walmart image. From the PR perspective, the fact that “Environmental Defense” is in the name of that NGO organization was probably not looked upon as a negative when Walmart made their NGO partner selection.
Relative to corporations’ entrances into CSR programs, it’s been written in the press that many companies undertake CSR programs in order to preclude attacks from NGOs and activist organizations. Indeed in the aforementioned CSM article, Daniel Korschun, a fellow at the Drexel University’s Center for Corporate Reputation Management, was quoted as saying “Many companies initially approach nonprofits in order to reduce the risk that the nonprofit will create bad press or organize protests and boycotts.”
Could this be the reason that Walmart got involved with EDF in 2005? Perhaps it wasn’t because of an altruistic concern that this corporation chose to enter the CSR arena. Perhaps there was a dual objective in Walmart’s decision to enter into CSR: to repair the image of the company and to preclude NGO and activist attacks.
Theory #2 Conclusion
Getting back to the central question of this post, “Who Is Really Behind the Walmart Sustainability Index?,” perhaps the EDF is really the driving force behind the WSI. Regardless of what Walmart might say about their customer as being the motivation for the WSI, the concept behind the WSI is not consistent with the profile of the average Walmart customer, as we saw in Part 1. But the EDF has the motivation to push this WSI into operation because the concept behind the WSI is consistent with the mission of the EDF.
Maybe the WSI is something that the EDF wants implemented, across all retailing, and not just at Walmart. If this is a goal of the EDF, they have gained a powerful relationship through which to implement that goal. As in the Findings above, the EDF’s corporate partnerships manager was quoted as saying, “we have a greater potential to influence the direction they (Walmart) take.” And as goes Walmart, so most certainly will go the rest of the retail world. This perceived influence in this relationship, and thus the perception of the power available to the EDF, is only accentuated by the knowledge that there is an EDF office in Bentonville.
So, what this all comes down to is that there is a strong possibility that the impetus behind Walmart’s initiation of the WSI was the influence of the EDF, and not customer demand as Walmart has indicated. There is no hard evidence of this, but based on the facts that I have located and presented here, the conclusion seems reasonable.
Epilogue
Now, you might be thinking, “Hey Richard, what does it matter who pushed the WSI? What’s so bad about the WSI?”
Well, I suppose that, at least on the surface, there would seem to be worse things in business than the WSI. Of course, analyzing its benefit to business and society will take some time, especially considering it isn’t even in the marketplace yet.
The WSI is sort of like the nutrition labels that appear on our food products, mandated by the federal government years ago. People can choose to read those labels or ignore them just as they can read or ignore the WSI if they so choose. Yes. Absolutely true. People can ignore the WSI. But the issue that I am raising here is not with the WSI itself. No, the issue I am raising here is one that is more than a label that appears on a product. The issue here is one of process, a process than can affect all companies. That process is one that is built on fear and is one that can insinuate itself into all companies.
When you consider the possibility, a very strong possibility, that it was the EDF who really may have had the goal of the WSI and initiated the WSI through their five-year partnership with Walmart, it doesn’t bode well, in general, for a company’s control of their own corporation. This loss of control would increase as more and more corporations “partner” with NGOs and activists; “partnerships” that are born in the desire to “preclude” publicity attacks. In so doing, companies may actually overlook the desires of their customers to meet the needs of an outsider. They may do this at the expense of those who actually pay to keep the company’s lights on, the customer.
And in this scenario we can see more of the political process insert itself into business as more NGOs become “partners” with fearful companies.
In July 2009, 
