In December 2019, Ethical Consumer searched the Walmart website and emailed the company for details of its supply chain management. In July 2019 Ethical Consumer had received a questionnaire response from Asda which contained information relating to Asda/Walmart's supply chain management. As this information had been received within the past two years, it was still considered current.
Supply Chain Policy (poor)
Asda provided a link to the Walmart "Standards for Suppliers" which contained adequate standards for forced labour and freedom of association. It stated that underage employment should not be used but did not state what was defined as underage. It stated that wages and working hours should conform to the law but did not provide a committment to the living wage nor cap working hours to 60 per week. It stated that unfair employment practices should not be used but did not specifically state that workers should not face descrimination. Overall Walmart was considered to have a poor supply chain policy.
Stakeholder engagement (poor)
The questionnaire response stated that Walmart provides a various means for workers to report incidences of non-compliance and also provides information about these at workplaces. Wal-Mart's Global Statement of Ethics, downloaded from the website, www.walmartethics.com, stated that the company "has a Global Ethics Helpline, which is available to associates around the world 24 hours a day, seven days a week, and is equipped to handle most local languages. The helpline is staffed by an organization not affiliated with Walmart, and to the extent possible (and in conformity with local regulations), callers may remain anonymous." It was not stated whether the helpline was free which was expected by Ethical Consumer.
The questionnaire response stated that Adsa was a member of the multi-stakeholder group Ethical Trading Initiative. However, Wal-Mart did not appear to be a member of any multi-stakeholder initiatives. Wal-Mart's list of approved audit programmes included several NGOs such as Better Work. However, it also included industry initiatives like the Responsible Business Council and SEDEX Members Ethical Trade Audit. As the company did not disclose the proportion of its supply chain audited by each programme, it could not be considered to have systematic input by NGOs in the verification of its labour rights audits.
Wal-Mart was considered to have poor stakeholder engagement overall.
Auditing and reporting (poor)
Wal-Mart’s 'Audit and Assessment Policy and Guidance' was downloaded, dated August 2019. The company took a risk-based approach to auditing based on the country in which a facility is located. Medium and high risk facilities were "required to complete an audit and follow-up audits as dictated by the supplier’s chosen third-party audit program." Facilities based in high-risk countries also required a 'prequalification audit'. Facilities chose audit an audit programme from a list of those approved by Walmart, and were expected to pay any necessary fees themselves. It appeared that not all suppliers were required to disclose all manufacturing facilities, therefore auditing did not appear to apply to the whole supply chain.
Wal-Mart also outlined its response to non-compliance: 'Three Strikes in a two year period will typically result in a suspension or termination of the supplier’s business relationship with Walmart.' Ethical Consumer expects companies to have a staged strategy for non-compliance that involves working with suppliers to improve conditions rather than simply terminating contracts.
Wal-Mart was considered to have a poor approach to auditing and reporting due to the fact that it did not commit to audit its whole supply chain, did not pay costs, and did not have an adequate strategy for non-compliance. It did not have a transparant schedule of audits, nor was there disclosure of audit results.
Difficult issues (rudimentary)
Asda provided a link to a Walmart webpage titled "Responsible Buying Practices" which stated that buying teams were provided with training as well as continuous engagement with the "Responsible Sourcing Business Enablement" team. Asda/Walmart did not appear to address any further difficult issues and was considered to have a rudimentary approach.
Given all of the above, Wal-Mart received Ethical Consumer's worst rating for Supply Chain Management.