McLaughlin outlines Wal-Mart focus on business responsibility in society

Kathleen McLaughlin, president of the Walmart Foundation, told students at the University of Arkansas that the role of big business is to serve society by using its own strengths and working with other companies to improve the worldwide community.

She was the featured speaker Tuesday (March 3) at the Dale Bumpers College of Agricultural, Food and Life Sciences and the Honors Student Board in Hembree Auditorium at the University of Arkansas. 

McLaughlin was recruited by Wal-Mart in October 2013 from McKinsey & Company where she spent 20 years rising to senior partner working on sustainability and global social challenges. She joined the nation’s largest retailer after visiting Bentonville and meeting the company leadership, saying she was impressed that Wal-Mart was a “mission driven company.”

“You now see the leading companies go beyond to collaborate with others to replenish and sustain the different systems,” she said. “That’s the reason I joined Wal-Mart.”

In addition to role in the WalMart Foundation, McLaughlin is also senior vice president for Wal-Mart Global Sustainability.

Her nearly 75-minute talk to about 150 students and faculty focused on six key success factors for how a business can work toward strengthening the private sector:
• The program has to be relevant to the company’s business. 
• It has to draw on the particular elements of the company.
• The company must be innovative to drive a double bottom line. 
• It has to reshape the system for lasting improvement.
• Work with other companies to accelerate the transformation.
• Embed into the organization the double bottom line.

As she discussed the success factors, she pointed to strategies at Wal-Mart where the company is focusing its efforts to strengthen its responsibility to the world. McLaughlin noted Wal-Mart’s increasing employee wages and developing programs to encourage frontline employees to move up to the middle level. This investment will cost Wal-Mart about $1 billion this year and includes a plan to raise the hourly wage of all full-time employees to $10 an hour by February 2016. That said, the recent announcement resonated with analysts and retail trade groups. TJX Companies, the parent of T.J. Maxx, has followed suit announcing higher minimum wages on the heels of Wal-Mart’s move.

Wal-Mart critics say the wage plan falls short, and doesn’t do enough to provide workers more hours. Emily Wells, an organizational leader with OUR Walmart, says the group will still push for its $15 an hour goal.

“With $16 billion in profits and $150 billion in wealth for the owners, Walmart can afford to provide the good jobs that Americans need – and that means $15 an hour, full-time, consistent hours and respect for our hard work,” Wells said.

McLaughlin also cited promoting women entrepreneurship and revamping an internal workforce program to assist employees to move up the ladder of success as strategies underway at Wal-Mart.

The broad areas McLaughlin discussed are relevant to Wal-Mart where the retailer’s focused efforts of sustainability, opportunity and community, she said. In the sustainability arena, Wal-Mart is working toward improving the food chain to make food more affordable and healthy by monitoring ingredients, working toward the use of 100% renewable energy and eliminating the waste stream produced in its stores, she said.

The food chain is an example of the role a business like Wal-Mart can play in society with strategies to be sustainable, reduce waste, improve access, make healthy choices easy to achieve, she added.

McLaughlin said the goal is go beyond writing a check, such as the creation of a $40 million fund to provide nutrition education to help people learn to cook on a budget and with healthier foods. 

Another example is what she called the closed loop fund, developed after the chief executive officers from some the largest food producing companies in the country met in Bentonville. The group created a $100 million fund to promote recycling nationwide. Cities can borrow money from the fund to develop recycling facilities.

As with wages, Wal-Mart draws critics on the sustainability front.

“Wal-Mart has made remarkably little progress in moving to renewable energy, while other national retailers and many small businesses are now generating a sizable share of their power from clean sources,” said Stacy Mitchell, a senior researcher at the Institute for Local Self Reliance and co-author of a November 2014 report on energy and carbon pollution. “Despite making a public commitment to sustainability nine years ago, Wal-Mart still favors dirty coal-generated electricity over solar and wind, because the company insists on using the cheapest power it can find.”