Walmart’s Sustainability Pitch to Wall Street
Walmart is making its case to Wall Street as a sustainability investment.
For one, the retailer has prioritized climate issues by setting “science-based targets” to reduce emissions and aims to hit “zero emissions” across its operations around the world by 2040, its chief sustainability officer Kathleen McLaughlin said Tuesday at Cowen’s Annual Consumer Platforms for the Next Generation virtual summit.
The other area the retailer has prioritized is its employees, McLaughlin said, pointing to recent initiatives to increase wages for some categories of workers and to create paths for career advancement, she said. During the ongoing COVID-19 pandemic, some Walmart employees and worker advocates have highlighted retail store and warehouse employees’ relatively low wages especially in light of heightened workplace safety risks, and questioned Walmart’s choice to pay out special bonuses rather than consistent hazard pay during the ongoing COVID-19 pandemic.
Nevertheless, McLaughlin said that the retailer has been orienting itself around a model of serving stakeholders beyond customers and shareholders, and prioritizing employees’ “economic opportunity,” and creating sustainable retail supply chains.
“What we try to do is articulate for investors, for others, what’s the ESG investment thesis in a company like Walmart?” she said, referring to “Environmental, Social and Governance,” the unofficial corporate responsibility framework that companies are increasingly using to quantify and present their sustainability efforts.
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“We think investors in general should take that approach, companies should consider things that way: What’s the reason you’d invest in Walmart, if you care about climate change, if you care about racial equity, if you care about COVID-19 response, if you care about equitable access to food?” she said.
“Whatever the issues are that are relevant for our business, what’s our ESG investment thesis: meaning, why is that issue relevant for business and society,” she said. “What’s the approach that we try to take at Walmart to address that issue?”
At the Q&A-style discussion, McLaughlin also defended the company’s pay structure against what she characterized as a “misconception” that it pays minimum wage. Walmart’s lowest wage is still $11 an hour, but many of its employees in different roles and locations are paid a higher rate, she said. At its Sam’s Club stores for instance, the wages are “north of $15 [an hour] for the vast majority of our people,” she said. Its e-commerce warehouse workers also make starting wages above $15 an hour. At its stores, employees in certain roles including in stocking and grocery pick-up can make starting wages between $13 and $19 an hour, she said.
”Our starting wages and our average wages simply reflect what is the local market average for that type of job, in that format, in that market,” she said.
“Walmart is an omnichannel company. In the U.S., it’s really a company with multiple formats embedded in it,” she said. “So we have our Supercenter and our grocery formats, we also have a club format, which is our Sam’s Club.”
“We also have an e-commerce warehouse company, if you want to think of it that way, in terms of our fulfillment centers…and so on,” she added. “And the wages that we pay in terms of our starting point, and on average, are reflective of the dynamics in those formats.”
Meanwhile, Walmart employees who have sought to take collective action with the support for the worker advocacy group United For Respect have continued to push for improved protections during the pandemic, including a $5-an-hour additional hazard pay, describing the hazards they still face on the job, including unmasked customers and store crowds despite the stores’ official masking and social distancing policies. Workers making under $15 an hour have also described the difficulties of affording basic needs on that pay, and how their dependence on those paychecks effectively limits how much time off they can take even if they do fall ill.
Walmart has also touted its “community resilience” efforts, including some $975 million of food donations last year. In November, a report by the government accountability office found that in several states, workers at Walmart and other large retail and fast-food chains had sought Medicaid and food assistance.
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