What counts: Building a better world through the strengths of business

Kathleen McLaughlin

President, Walmart Foundation and

Senior Vice President, Sustainability

@WalmartGiving

#CECPSummit @CECPTweets

Business serves society: a company’s societal impact begins with its core mission

Successful companies should go beyond their core mission to strengthen society through initiatives that meet five tests

Societal impact

1. Prioritize issues that are relevant to

customer and mission

2. Aspire to reshape the system for societal and

business impact

3. Embed commitments into the business

4. Draw on distinctive business and philanthropic capabilities

5. Engage leaders of the system as partners in

transforming the system

Business impact

1. Prioritize issues that are relevant for customer and mission – Walmart example

Sustainability

Operations Food Chain Other ProductChains

12.5

Lead in energy - Energy efficiency - Renewables - Fleet

Accelerate waste reduction

Scope new arenas- Refrigerants - Water

Increase resilience of food supply- Agriculture- Beef- Seafood- Farmer training and welfare

Make healthy easy- Private label- Consumer info- Lower price of fresh food

Provide access to food- Food deserts- Food banks- Meal programs

Increase manufacturingsustainability - Energy efficiency- Factory safety

Increase materials sustainability- Recycled content - Chemicals

Optimize packaging- Recycling - Reduction

Advance Women’s Economic Empowerment- Sourcing- Training

Accelerate workforce development - Veterans- Low-income women- People of color- Small business owners

Lead U.S. Manufacturing Innovation Fund

Engage associates in philanthropy- Volunteerism- Matching

Support communities- State giving- Facility giving- Associate assistance

Enhance disaster preparedness and relief

Engagement: customers, partners and associates

Opportunity Community

Note: Initiatives include corporate and Walmart Foundation efforts

2. Aspire to reshape the system for societal as well as business impact –food system example

Source sustainably

Ensure sufficient, sustainable supply

to feed growing population

Reduce Waste

Reduce food waste, and divert

underutilized fresh food into

charitable system

Address Access

Lower price, eliminate food

deserts, strengthen food banks and meals

in schools

Make Healthy Easy

Increase access to healthy, affordable food; provide tools and education to choose and cook

healthy food

Create a Movement

Motivate customers,

partners to learn and take

meaningful action in creating a

sustainable food system

Many currently collaborating to lower GHG, preserve natural capital, promote equity for farm labor, provide food access, democratize healthy eating, address under- and over-nourishment• Private sector: retailers, food companies, farmers• Public sector: federal agencies, bi-lateral and multi-lateral agencies, state governments,

municipalities, school districts, ag extension workers• Social sector: food banks/pantries, policy makers, environmental NGOs, activists

3. Embed social and environmental commitments into the business

•CEO commitment •Bold, public aspirations•Public “Milestone” meetings•Joint commitments with suppliers and NGO partners

Leadership

•Dedicated line functions with clear roles •Communities of practice •Dedicated initiative teams to catalyze, manage results

Roles and structure

•Metrics in performance reviews•Capital planning and budget cycle •Disciplined execution•Rigorous project management and tracking

Processes andincentives

4. Draw on distinctive business and philanthropic capabilities to enhance impact

Sustainability Opportunity Community

• Energy efficiency• Waste reduction• Product chains

• Associate opportunity (hiring, advancement)

• Sourcing commitments (women-owned businesses, U.S. manufacturing)

• Hunger relief• Social impact

investments

• Retail sector workforce grants

• Training for women, minorities, veterans

• Wrap-around supports

Role/focus of the business

• Business and societal value through business initiatives

• Draws on company assets• Convenes and collaborates with suppliers • Able to support government and sector

initiatives

Role/focus of a business’ philanthropic arm

• Societal value through grants, impact investments

• Draws on company assets• Develops expertise• May depend on company for funds, but is

free from quarterly earnings pressure• Collaborates with and strengthens other

non-profits

• Local store presence and involvement

• Disaster relief

Example complementary focus in three arenas

4. Business capabilities can significantly enhance social and environmental initiatives, as illustrated in these examples

Societal initiative

•Hunger and nutrition

•Workforce development

•Disaster relief

Relevant company assets

•Food donations•Logistics know-how•Nutrition standards and

labeling

•Jobs• Insights into relevant credentials•Employees who can act as

mentors

•Trucks and equipment•Food and water•Emergency operations center

Multi-company, pre-competitive, public commitments• 8 food companies, 8M acres for sustainable ag• 10 companies, $100 Mn urban recycling fund

5. Companies are engaging in new forms of collaboration to accelerate and expand societal impact

Environmental “JBPs” with leading NGOs

Problem-solving consortia suchas the Sustainability Consortium

Innovation with NGO partners

Global Development Lab USAID

Incremental $20 billion from women-owned suppliers for the U.S. business by 2016

Incorporates five key success factors1. Societal and business impact2. Relevant to customer and business

mission3. Embedded in the business4. Draws on distinctive capabilities5. Partnering with leaders of the system

to rewire it for women

Putting it all together – example of women’s economic empowerment

Also doubling sourcing from women for international marketsand training 1 million in factories, farms, business by 2016

Parting thoughts

• Business exists to serve society

• Challenges of our time too great for governments and social sector to resolve alone; business has distinctive and complementary capabilities

• Businesses should pursue societal initiatives with the same vigor as business initiatives

– Relevant to customer and mission

– Bold aspirations to reshape the system

– Explicitly drawing on distinctive business capabilities

– Initiatives embedded into the business

– New forms of partnership across private, public and social sector required

• How are you engaged? What is one thing you could do differently tomorrow?