Excellent insight on Walmart’s sustainability impact in China

This article is from nearly a year ago, but I doubt it’s been bettered since.

Titled: “How Walmart Is Changing China” it’s essential reading.

It’s from the Atlantic, one of the few magazines left that do thoughtful, balanced, long form reporting and analysis.

It’s a long piece, but nothing good is easy.

If you are really are so busy that you just can’t make time to read it here’s a few excerpts that might change your mind:

“Its 9,700 stores in 28 countries, supplied by a network of more than 100,000 sources in 60 countries, are staffed by some 2.1 million employees serving 200 million customers a week. Compare Walmart’s annual revenue with the GDP of sovereign nations, and it ranks in the top quartile. In many ways, the company is like a country. Its CEO, when abroad, is treated almost like a visiting head of state.”

“Although Walmart’s $7.5 billion in Chinese sales receipts account for only 2 percent of the company’s annual revenues, its sales in China have risen substantially over the past decade. Sales in the United States, by contrast, have been shrinking. And as China’s retail market—the world’s fastest-growing—expands by 18 percent a year…”

“20,000 Chinese suppliers, or “partners,” reportedly provide Walmart with about 70 percent of the nearly $420 billion worth of goods that it sells globally each year. (Because of the complexity of the global supply chain, the percentage from China is hard to calculate.)”

“Walmart is helping the Chinese state not just to satisfy the escalating demands of its consumers but to extend Beijing’s regulatory writ. Together, they are engaging in a bold experiment in consumer behavior modification, market economics, and environmental stewardship”

 “Over the last couple of years, the problem of food safety has made people think hard about the origins of what they eat,” Liu earnestly tells me. “There are companies that put profit ahead of quality, so many consumers are coming to trust big names like Walmart, which has been a leader in organic food here and does pay real attention to inspections and standards.” She pauses before adding, “We have learned from Walmart how to become a company with a social conscience.”

“…we also didn’t realize that Walmart would have so many programs to help advise us on how to reduce energy and water use and reduce emissions.” Since then, Loftex has invested more than 4 million RMB (about $650,000) and cut electricity use by 25 percent and water use by 35 percent, achieving its 2012 energy-reduction goals a year ahead of schedule.”

“While researching this piece, I repeatedly asked Walmart executives how many Chinese factories had actually been given “red” status and been “disapproved” as ongoing suppliers by Walmart’s Global Audit system, as Lee Scott had threatened back in Beijing. A clear answer was hard to come by. When I checked the company’s “2011 Global Responsibility Report,” I found China grouped with Japan and South Korea simply as the “Far East,” a region that was itself strangely incomplete, making one wonder if Scott’s threat was more bark than bite. When the company’s Ethical Standards team finally responded, it said that it does not “provide breakouts below the regional level.” The team did say, however, “The majority of the [failing] factories in that region are in China.”

Read the full story here. It’s worth it.

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