From walking to talking: Walmart’s necessary next step on the path to sustainability leadership

December 7, 2012

We’ve been tracking Walmart’s sustainability I.Q. for the past two years in the Brandlogic Sustainability Leadership Report–the first study to compare real and perceived performance for 100 leading global brands. Walmart earned a spot in the Laggards quadrant again this year, meaning its real and perceived sustainability scores both rate below average when compared to the other 99 companies we tracked. However, Walmart has made significant gains on the real side in 2011 and is beginning to edge upward on the perceptual side as well.

In last year’s Sustainability Leadership Report, the retail giant had an abysmal rating on its actual environmental indicators (3.9 on 100 point scale). That performance was poor enough to pull its real overall ESG score, including above average ratings on social and governance sustainability dimensions, firmly below the study average (7.0 points below).

Since that initial scoring and with new President and CEO Michael T. Duke at the reins, Walmart has produced its first Global Responsibility Report, which includes more data and metrics to track and measure the company’s sustainability progress than ever before. This transparency likely helped Walmart achieve higher reality-side performance scores in our study this year with a dramatic 31.6-point gain on the environmental dimension alone.

Walmart’s real environmental score was still 10 points below average this year, but it’s real overall score is now lagging by less than 2 points, making a shift out of the Laggards quadrant a real possibility next year if the company continues to improve.

With real performance on the rise, the next challenge will be changing perceptions so that the company’s sustainability achievements are recognized by key stakeholders. Isolated progress was made among investment professionals this year, with a notable increase in the retailer’s perceived environmental performance among this “highly attentive” audience. In fact, changes in perceptions among the investment community sample tracked with Walmart’s evolving reality, pointing to the positive effects of increased transparency and sustainability reporting.

Walmart now needs to engage other stakeholders by incorporating its sustainability story into mainstream communications. The company’s gains this year were not consistently recognized by the purchasing professionals in our study, and did not penetrate at all the future talent market, so additional communications efforts are needed to move the needle with these other “highly attentive” stakeholder groups.

When it comes to sustainability, walking the walk is just half the battle toward achieving a leadership position. Companies also have to talk the talk, incorporating related themes into their broader communications to get the credit for their good works.

For more information download a free copy of the 2012 Brandlogic Sustainability Leadership Report at www.sustainabilityleadershipreport.com.

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