Sustainability Suppliers In the supply chain management, the company requires a performance in line with its ethical principles

Transcription

1 Sustainability 2013 Year 2012 Report Walmart Management practices and engaged teams distinguish the company in the retail industry Suppliers In the supply chain management, the company requires a performance in line with its ethical principles Society Walmart is committed to Women empowerment and the value generation to customers and communities

2 Credits Coordination Walmart Brasil Corporate Affairs - External Communications Content Consultant and layout TheMediaGroup Translation Celtic Comunicações Photos Felipe Gombossy, Mari Vaccaro, Pulsar Image Bank and Walmart Image Bank PRINT Braspor Questions, comments and suggestions about the content of this publication should be sent to Walmart Brasil s Corporate Affairs/External Communication Department (Av. Tucunaré, 125 ZIP: Barueri SP or by to: sustentabilidade@wal-mart.com)

3 CONTENTS 08 walmart 04. MESSAGE FROM THE PRESIDENT 06. HOW WE CREATED THIS REPORT Walmart 09. PROFILE 12. HISTORY OF WALMART BRASIL 16. PEOPLE 22. SUSTAINABILITY MANAGEMENT 30 SUPPLIERS SUPPLIERS 32. MANAGING THE CHAIN 36. LOCAL SUPPLIERS SOCIETY This publication presents a series of special articles/reports 14. HEATED MARKET 21. CAN YOU PLAN YOUR CAREER? 28. IN THE HEARTS AND MINDS OF CUSTOMERS 34. DEVELOPMENT OF BUSINESS ETHICS 38. SMALL AND MID-SIZED FARMING IN BRAZIL 46. CUSTOMER OF THE 21ST CENTURY 50. SUSTAINABILITY, ECONOMIC EMPOWERMENT AND GENDER EQUALITY 54. The youth unemployment crisis 43. CUSTOMERS 48. SECTOR ENGAGEMENT 49. WOMEN S EMPOWERMENT 52. WALMART INSTITUTE 58. GRI LETTER 59. GRI INDEX SOCIETY 42

4 Governança Message from the President GRI Walmart Brasil is pledged to be a high performance company with well defined operating principles. These include having a leading position in social and environmental issues, focused on engagement with suppliers and consumers to foster more sustainable consumption habits. In this interview, Walmart Brasil president Marcos Samaha describes how the company has made investments and structured platforms to achieve the aims of its sustainability strategy. This has been incorporated into its global business management since 2005 when Walmart pledged to reduce waste from its operations, increase energy efficiency, reduce greenhouse gas (GHG) emissions and offer more sustainable products. 4

5 How do you assess the changes and transformations Walmart made in 2012? We opened new stores in 2012, expanded our competitive advantages and our customers increased their perception that we were offering quality products at low prices. Walmart is undergoing some transformation processes to make it even more of a high performance company. However, we have to make structural adjustments to do so and adopt the best business practices in terms of management, integrating systemic platforms, simplifying processes and giving priority to operating efficiency and focusing on activities directed at customers. These changes have been underway since the beginning of 2010 so I would describe 2012 as the third year of our transformations. I am very satisfied to see that we are advancing and the team has its feet on the ground. How does the Everyday Low Prices philosophy fit into this transformation situation? The introduction of the Everyday Low Prices concept was a significant change that was adopted in a consistent way and did not take place overnight. To do so, we carried out a plan over a period of 10 months that involved renegotiations with suppliers and changes in the way we carried out our business. The public was informed about the Everyday Low Prices concept in 2011 but we still face the challenge of publicizing our philosophy on a permanent, consistent basis to our costumers. The great transformation we are currently making is related to processes and systems and we have made another important step with pilot projects for the systemic conversion of our stores. To raise the company to a high performance operation involves changing the foundations and structures and preparing it for the future. It also requires courage and engagement to keep the team in harmony with the corrections on the way and the business targets. We could never aspire to be a high performance company without these changes. How does Walmart assess the customer s perception and satisfaction in relation to these changes? We hold weekly leadership meetings at which the agenda includes a brief introduction and the first topic is the Voz do Cliente (Customer s Voice) which presents our customer attendance and service satisfaction indicators. Our clients have increased their loyalty to our stores and brands. This shows customers understand that the changes we are making are in their interest as they improve the quality and help lower the price. Do the sustainability strategies and actions encourage consumers to change their behavior and raise their awareness? I have seen many comments by customers who are choosing to buy in Walmart stores because we have recycling stations. Our voluntary reception posts are available in many districts where there is no selective waste collection. Customers will do their shopping there because they can bring disposable packaging for recycling. The very growth in sales of products that are part of the program Sustentabilidade de Ponta a Ponta (End-to-End Sustainability), through which we encourage the industry to review some aspects of the product life cycle and make changes that add differences in terms of sustainability, is a clear sign that the customer sees and appreciates what we are doing as part of our principle of playing a leading role in social and environmental questions. And in relation to suppliers? The industrial sector has a much greater environmental impact than the retail industry in the productive chains so it is natural that the greatest innovation should occur in this link of the chain. In the retail sector we can be drivers, helping to raise awareness and creating an environment in which the discussion, search for improvement and identifying opportunities can occur. The End-to-End Sustainability program is an obvious example of this. We can also mention the various pacts we have established with a number of commercial partners. We should also not overlook the initiatives to appreciate the small and mid-sized local farmers who supply our stores with quality regional products and have access to the retail business without needing to go through intermediaries. What type of structure is needed for this strategy of managing sustainability successfully and in line with Walmart s global aims? This strategic focus on sustainability arose from a global strategy that was announced in 2005 and was adapted to the situation on the ground in the countries where the company is present. We adhered to this guidance quickly in Brazil and made innovations. I have worked for Walmart operations outside Brazil and one of the innovations we brought to these places was working with platforms in which there are sponsors, captains and various multidisciplinary areas. This shows that sustainability is not just the job of one particular sector but all of us. What are the future expectations and what initiatives will be taken to reduce Walmart s social and environmental impacts? There is absolutely no doubt that our practices are constantly improving and even being revised on some fronts to ensure we achieve the goals in the short, medium and long terms. This also includes all the initiatives related to social responsibility and private social investment which are having a strong impact on the communities where we are present. Sustainability Report

6 How we Created This Report GRI Walmart Brasil is publishing its Annual Sustainability Report on its economic, social and environmental performances from January 1 to December 31, 2012 in a new, lighter editorial form. The company is following the guidelines of version 3.0 of the Global Reporting Initiative (GRI) as it did with the previous annual report. GRI This report goes well beyond presenting information related to Walmart s store and office operation in Brazil. It aims to be a tool for handling and relating to customers, employees, suppliers and other stakeholders who are part of its value chain. To understand and improve the scope of the report, the company held a Stakeholders Panel in 2012 which included senior management, customers, suppliers, employees, non-governmental organizations, the media, academics and trade associations. GRI Important issues for this report were identified through an on-site meeting in São Paulo city and interviews with customers and employees in the store chain in other states through a materiality test and the company s strategic priority issues were debated. During these two periods, the stakeholders evaluated aspects in their economic, social and environmental context, working practices, human rights, and social and product responsibility. The themes arising from this materiality matrix, as with other issues regarded as important for Walmart Brasil, are considered in detail in this publication. MATERIALITY MATRIX Importance for the stakeholders Caption: Environmental issues Economic issues Social issues Importance for the organization 6

7 STRUCTURE OF THE REPORT The business strategies, the challenges to ensure that the products sold on the supermarket shelves achieve the most sustainable production possible and how the company contributes to the development of society are described in three large chapters of this report: Walmart, Suppliers and Society. Each chapter presents the most important themes indicated in the materiality matrix, the performance indicators and the company s policies and practices are covered in direct, simple language. A description is also given in the report on how Walmart relates ECONOMIC DIMENSION 1 Economic and financial performance 2 Local economic performance 3 Indirect environmental impact ENVIRONMENTAL DIMENSION 4 Use of materials and recycling 5 Energy consumption and generation for own use 6 Water consumption and reuse 7 Managing and impact on biodiversity 8 Control of emissions, effluents and waste 9 Environmental impact in the use of products * 10 Environmental investments and spending 11 Social and environmental management in the value chain * 12 Sustainable buildings 13 Impact of climate changes on the business LABOR PRACTICES AND DECENT WORKING CONDITIONS DIMENSION 14 Work and relations between employees and the company * 15 Health and safety at work 16 Training and development * 17 Diversity and equal opportunities * to and interacts with its strategic stakeholders customers, suppliers, governments, associations and voluntary organizations, academic institutions and institutional forums. GRI At the same time, a series of reports, articles and interviews are featured which highlight some of the inherent challenges of the sector and the macroeconomic outlook. The aim of this content is to give the reader a better understanding of how Walmart Brasil manages sustainability within its business strategy and how this has evolved over the years. HUMAN RIGHTS DIMENSION 18 Investment practices in business and human rights 19 Human rights aspects in the productive chain 20 Non-discrimination and eradication of slave labor * SOCIAL DIMENSION 21 Impact on communities * 22 Combating corruption * 23 Company s positioning in relation to public policies 24 Relationship with the competition PRODUCT RESPONSIBILITY DIMENSION 25 Health and safety of customers in using the products * 26 Customer relations and satisfaction 27 Information about the product (access and quality of information) 28 Communication and marketing 29 Conscientious consumption 30 Research & Development and innovation 31 Purchasing policies and practices 32 Product life cycles (ecodesign/recycling/return after use) GRI B Level of Application More information in the GR index Questions and Suggestions Department of Corporate Affairs Avenida Tucunaré, 125 Alphaville CEP: Barueri SP sustentabilidade@wal-mart.com Measurement and Calculation Techniques The methodologies and any alterations in the criteria used for obtaining the information/data are described in the report *Highly relevant themes. Sustainability Report

8 walmart GRI 2.8 Units in Brazil Revenues (R$ billion)

9 Walmart Solid expansion and benchmark practices in the sector make the difference in the company s operations PROFILE Walmart was founded in 1962 when Sam Walton opened the first Walmart discount store in Rogers, Arkansas (USA). Fifty years later, the chain consisted of more than 10,000 stores, with 69 brands in 27 countries. The company employs 2.2 million people who carry out its activities and serve their customers in a way that is inspired by the enthusiasm and entrepreneurial spirit of its founder. Walmart has been in Brazil since 1995 and is an unlisted company controlled by Wal-Mart Stores, Inc. It had 547 stores and warehouse membership clubs in 18 states, located in the Northeast, Center-South, Southeast and South regions at the end of The head office is located in the town of Barueri in the metropolitan region of São Paulo and it has regional offices in the cities of Porto Alegre (RS), Curitiba (PR), Salvador (BA) and Recife (PE). It also has 21 distribution centers in 9 states. GRI Canada Mexico El Salvador Guatemala Costa Rica Honduras Nicaragua Chile US Argentina Brazil UK Ghana Uganda Nigeria Namibia South Africa India Tanzania Botswana Zambia Malawi Mozambique Swaziland Lesotho China Japan Walmart worldwide Present in 27 countries 10,800 stores 2.2 million employees Global revenues in 2012: US$466.7 billion Sustainability Report

10 walmart GRI Hypermarket Supermarket 55 stores present in São Paulo, Minas Gerais, Rio de Janeiro, Espírito Santo, Paraná, Mato Grosso do Sul, Goiás States and the Federal District 42 stores located in Paraná, Santa Catarina and Rio Grande do Sul States 61 stores in the States of Sergipe, Bahia, Pernambuco, Maranhão, Paraíba, Alagoas, Piauí, Ceará and Rio Grande do Norte 21 units located in Paraná State 39 stores in the States of Bahia, Sergipe, Alagoas, Pernambuco, Paraíba, Ceará, Rio Grande do Norte, Piauí and Maranhão 68 supermarkets in Rio Grande do Sul and Santa Catarina States Wholesale 1 Warehouse Membership Club 2 59 units in the States of Paraná, Santa Catarina, Rio Grande do Sul, São Paulo, Minas Gerais, Mato Grosso do Sul, Goiás, Alagoas, Paraíba, Pernambuco, Bahia and Ceará Neighborhood Market 27 clubs of the chain in the States of São Paulo, Rio de Janeiro, Espírito Santo, Minas Gerais, Paraná, Rio Grande do Sul, Alagoas, Rio Grande do Norte, Ceará, Pernambuco, Goiás and the Federal District Special Division 175 units located in the States of Bahia, Pernambuco, Paraíba, Alagoas, Sergipe, São Paulo, Paraná and Rio Grande do Sul Virtual Store Drugstores Gas stations Photo centers Restaurants Cafeterias The virtual store was created in 2008 and attends consumers throughout Brazil. The leisure and travel service was launched in 2012 through which customers can buy air tickets, make reservations in hotels and restaurants and hire cars. 1. Operates according to the cash and carry concept, a self service model that is different from traditional retail as products are sold in large quantities or packaged with a number of Items for resale. 2. In this format, the customer (whether the end consumer or merchant) becomes a member of the club and pays an annual fee. It provides a mix of differentiated products, imports and with exclusive packaging. 10

11 BUSINESS CONCEPT The Everyday Low Prices (EDLP) concept was introduced to Brazil in 2011 and is Walmart s main differential in all the countries where it operates. The aim is to sell customers products at lower and more stable average prices than the competition. To uphold this strategy, the company also needs to work with an Every Day Low Cost approach and pursues better negotiating models with suppliers and greater efficiency in its processes to be able to offer the lowest prices and maintain commercial sustainability. A Walmart research team also carries out a weekly assessment of the prices of up to 7,000 items. This is one of the mechanisms that helps monitor and ensure that low prices are maintained and increase customer satisfaction (see more on page 44). The focus of the EDLP concept is to highlight the company s appreciation of the customer. It brings clients a series of advantages, such as the freedom to choose which day of the week to go shopping and the certainty of always finding fresh, top quality products and smaller lines at the checkout as they no longer need to go to the stores on specific promotion days. MANAGING RISKS The Corporate Risk Management area makes an annual corporate assessment of the risks to which the chain could be exposed. Four kinds of risks classified in the anti-corruption category were submitted to a vote by the company s senior management in On this particular occasion the participants received training to strengthen the culture of integrity, risks and internal control. The assessment resulted in the creation of a risk matrix with mitigation plans that made the anti-corruption risks visible and transparent, allowing the company to direct its efforts to offset them with the weight they deserve. GRI SO2 All employees are presented with the Walmart Statement of Ethics on joining the company and sign it. They also receive training in Walmart s Anti-Corruption Policy and related procedures. In 2012, 3,794 employees and 54 outsourced workers from service providers were trained in the anti-corruption policies and procedures, including the revisions of those policies which were made in GRI SO3 Walmart s operating strategy and governance in Brazil are supervised by the president and 11 vice-presidents, who have the freedom to adapt the company s global guidelines to the domestic situation. This includes decisions related to managing the business and sustainable and social responsibility actions. The senior management must show their commitment to Walmart s basic principles and the company s results, balancing professionalism with a humanitarian approach to business in such a way to ensure sustainable growth. GRI Mission Saving people money so they can live better. Vision To be the best retailer in Brazil in the hearts and minds of customers and employees. Principles Respect for the individual. Service to our customers. Striving for excellence. Acting with integrity. GRI 4.8 Sustainability Report

12 walmart HISTORY OF WALMART BRASIL 1995 Five stores opened in Greater São Paulo Chain stores open in upstate São Paulo. Expansion to other states, beginning with Paraná The chain stores start operating in Minas Gerais and Rio de Janeiro states The acquisition of the Sonae Group s retail operation incorporates another 140 units to the chain and the BIG, Mercadorama, Nacional and Maxxi Atacado brands. Stores are opened in the Federal District, Espírito Santo and Goiás States. The Walmart Institute is created in Brazil and Wal-Mart Stores, Inc announces global sustainability strategy The Escola Social do Varejo (Social School of Retail) is launched by the Walmart Institute and looks after more than 1,000 young people. The tracking program Qualidade Selecionada. Origem Garantida (Selected Quality. Guaranteed Origin) is created. Walmart proposes and signs the Responsible Fish Purchasing Commitment Policy, thereby publicly assuming responsibility with the Fishery and Agricultural Ministry. The first products within the End-to- End Sustainability program are launched Walmart Granja Viana in São Paulo serves as a pilot scheme for the creation of eco-efficient stores, incorporating 24 sustainability initiatives. Walmart signs a commitment to the Movimento Conexões Sustentáveis (Sustainable Connections Movement) and joins its Executive Committee. The company also joins the Grupo de Trabalho da Pecuária Sustentável (Sustainable Livestock Working Group) and the Fórum Amazônia Sustentável (Sustainable Amazon Forum) The Everyday Low Prices concept is introduced. Research institutes confirm the company s efficiency in providing customer access to lower prices. Walmart coordinates the creation of the Movimento Empresarial pelo Desenvolvimento Econômico da Mulher (Corporate Movement for the Economic Empowerment of Women) known as the Movimento Mulher 360 (Women 360 Movement), and concludes the second End-to- End Sustainability program, with the launch of another 13 products. The company is the world leader within the group with the creation of the Responsible Beef Sourcing Buying Policy.

13 2001 The first distribution center is opened in Greater São Paulo. The first TodoDia store opens in São Paulo city The chain s drugstores start selling 500 generic medicines at prices up to R$9.90. The virtual store is founded. The first eco-efficient store opens in Rio de Janeiro city and Community Stores are opened in Salvador (BA). The Cliente Consciente Merece Desconto (Responsible Customers Deserve Discounts) program is launched. The chain arrives in Mato Grosso do Sul State. The Programa de Apoio à Implementação da Floresta Nacional Flona (Program to Support the Implementation of the National Forest Flona) gets underway in Amapá State The Producers Club is founded, created by Sonae, a group Walmart subsequently acquires. The first year of the Movimento Mulher 360 is commemorated with all signatories to the initiative. The Escola Social do Varejo (Social School of Retail) starts sharing its methodology and technology internationally through a partnership between Walmart at global level and the Inter-American Development Bank (IDB). The focus is on providing training and giving job opportunities to young people in Latin America and the Caribbean. Walmart Brasil also receives the Prêmio Época Empresa Verde (Época Green Company Prize) from Editora Globo in the Services category and is highlighted for its Good Environmental Practices. GRI 2.10 The first drugstore within the chain opens The Pacto pela Sustentabilidade (Sustainability Pact) is signed by the company s main suppliers. Walmart is named Empresa Sustentável do Ano (Sustainable Company of the Year) in the Guia Exame de Sustentabilidade publication. The End-to-End Sustainability project gets underway with the participation of ten suppliers. The Sentir Bem (Feeling Good) private-label brand is launched. The eco-efficient distribution center in Betim (MG) and Community Store in Recife (PE) are launched The purchase of the Bompreço chain in the Northeast leads to the acquisition of 118 stores. Sustainability Report

14 REPORT RETAIL HEATED MARKET RETAIL SECTOR INNOVATES TO SATISFY THE C CLASS Juliana Rocha The expansion of the middle class and the higher purchasing power of this section of the population have boosted the level of consumption in Brazil since The retail trade has had to innovate in recent years to satisfy the desires of this new consumer. Nevertheless, many challenges remain, such as foreseeing the coming trends and kind of performance this group will demand. There are currently 104 million people within the middle class which is known as the C class in Brazil. This is equivalent to the population of Germany or four times that of Colombia. A combination of factors led to a large section of the Brazilian population rising to this class: a fall in unemployment, higher income and lower interest rates. The Instituto Data Popular defines the middle class as people earning between R$292 and R$1,019 a month or with household income of between R$1,100 and R$3,875. C class consumers had a combined income of R$665 billion in 2012, according to figures from Data Popular. This is much higher than the GDP of Switzerland, Chile or Norway. They consume R$1.03 trillion a year which also highlights the impact of credit on this market. Since the international crisis broke out in 2008 and worsened in 2011, economists have noted that the Brazilian economy has been buoyed up by domestic consumption. For example, while GDP grew by only 0.9% in 2012, retail sales expanded by 8.4%. The retail sector noticed that a large volume of consumers had emerged. These are people who do not want to be treated as an upwardly mobile class or want a product to be exclusive to them, says Nuno Fouto, director of research and studies of the Programa de Administração do Varejo Provar (Retail Program) at the Fundação Instituto de Administração (FIA) business school. The higher purchasing power of the C class boosted demand for electro-electronic products, travel and even new items for the table. Demand for electro-domestic white line products came to an estimated 4.9 million stoves, 4.6 million refrigerators and 4.3 million washing machines in Sales of televisions 14

15 amounted to 7.3 million and 4.8 million sofas were sold, according to the Instituto Data Popular. Demand for mobile phones was 15.8 million handsets while 11.3 million laptops and 6.8 million tablets were sold. The growing popularity of these appliances and internet access also boosted the potential for on-line retail sales, says Ricardo Pastore, coordinator of the Retail Studies Center of the Escola Superior de Propaganda e Marketing business school (ESPM). The challenge now will be to understand what middle class people want to buy on-line, he adds. The new middle class also has a new consumer profile marked by social mobility. Women are an important part of the new market as their income has risen by 60% more than men s over the last 10 years. The new C class profile also includes young people who make up 55% of this section of the population and black people who account for 75% of those who have passed into the middle class in the last decade. Fouto says retailers aim to meet the desires of the C class by innovating and offering products and brands that are positioned for the luxury market and higher class but with accessible prices for the average income group. Large department store chains, for example, are creating collections with upmarket designers. Furniture and design stores have also launched collections with more accessible prices and even luxury car manufacturers are making popular cars. Pastore of the ESPM perceives the demand from the middle class for products that are launched more directly at the higher classes. He points out that there are also popular signs that influence culture, style and consumption. Popular consumption ends up being adopted. The popular market is very strong in Brazil, Pastore says. Another trend which is strengthening among Brazil s middle class is to buy in the wholesaleretail market ( atacarejo ). These are chains that sell goods in large packaging at lower prices on the retail and wholesale side. The new consumer likes the feeling of being satiated. These stores used to exist only for the public that wanted to save money but they have now become more luxurious, he adds. The profile of the middle class consumer has also changed when it comes to the table. Fouto mentions yogurts, cookies and special fruit juices which have entered the list of products the C class buys in supermarkets. Meanwhile, consumption of health and beauty products, cosmetics, creams and diapers has risen. We are seeing a sophistication in consumption. Some products are rising much faster than the average in the growth of retail sales. Middle Class in Figures R$1.03 trillion is the consumption per year R$665 billion is the turnover R$1,100 to R$3,875 is the monthly income range of the C class 104 million Brazilians are in the middle class known as the C class Source: Instituto Data Popular Sustainability Report

16 walmart PEOPLE GRI 2.8 Walmart employs 82,383 people in Brazil and one of its principles is to promote the personal and professional development of its workforce. This way of operating and managing its professional staff is part of the corporate culture, which is based on the respect for the individual, serving customers and striving for excellence values practiced by its founder Sam Walton. TOTAL EMPLOYEES BY GENDER AND REGION GRI LA1 29,481 employees 35.8% of of the total Northeast 51.4% 48.6% 2,196 employees 2.7% of the total Midwest 44.6% 55.4% 19,070 employees 23.1% of the total Southeast 44.6% 55.4% 31,636 employees 38.4% of the total South 41.4% 58.6% TOTAL NUMBER OF EMPLOYEES 12/31/ For undetermined period or permanent 79,579 For determined period or temporary 1,637 Part-time 1,049 Interns 35 Trainees 83 Total 82, Walmart does not publish figures for outsourced and self-employed workers. 2. This number represents the entire workforce of Walmart Brasil, including interns and expatriates. 16

17 STRONG CORPORATE CULTURE ON DAILY BASIS All employees work based on respect for the individual, service to our customer and striving for excellence 1.6 million hours of training were held in 2012 DIVERSITY IN THE WORKPLACE IS ENCOURAGED ON A DAILY BASIS, HIGHLIGHTED BY GENDER EQUALITY TOTAL NUMBER OF EMPLOYEES BY GENDER 45.8% 54.2% Sustainability Report

18 walmart Training offered by Walmart to employees GRI LA Merchant s Academy A training program based on a similar one developed by Walmart in the United States which was adapted to the Brazilian team s needs. Two experimental compact training modules were held during the year. The course ranges from sale assistants to senior managers and aims to create sales staff with technical skills and behavior. The subjects covered were EDLP and Negotiating. A Logistics Academy is scheduled to be launched in Food Safety Training on the issue was reformulated to ensure it was assimilated by the participants, based on the model used by Walmart in the United States that was certified by an American university. The Brazilian version was used for 100% of the store leadership to simplify the actions in the chain s units. Warehouse Membership Club To maintain and expand the base of Sam s Club members, 100% of the attendance team was trained in modules aimed at ensuring the satisfaction of customers served by this format. District Schools This was carried out in 2012 with the aim of developing the leadership and bringing a greater impact on our operations through behavioral and technical themes. 100 Mulheres na Liderança (100 Women Leaders program) To strengthen the female presence at leadership level, Walmart invested in the development of 100 women to leadership positions, mainly in operations. The program lasts six months and includes practical and theoretical lessons, speeches, workshops and mentoring sessions with senior management. Escola de Líderes (Leaders School) Meeting of the company s senior leadership with directors and managers from the stores. In 2012, the Leaders School development workshops were held for the target public of the entire leadership of the stores, clubs and distribution centers. Training in Sustainability The concepts of sustainability and conscientious consumption were presented on video. Around 94% of employees were trained in 2012 (see more on page 22). 18

19 Employees throughout Brazil work according to the main operating principles established by the Walmart Way of Working concept. This means taking an ethical approach and acting with integrity, pursuing solutions to satisfy customers and helping them by offering products within the Everyday Low Prices concept. Walmart gives priority to hiring local people when opening new stores to bring it closer to the community and help develop the economy. GRI EC7 To achieve its business objectives, the company has invested in training and improving the skills of its employees. Staff received 1.6 million hours of training in 2012, equivalent to 20 hours each. Walmart also revised its portfolio of courses and programs on offer in the year, increasing the focus on the impact which each training event brings to the business. As a result, the number of training events offered was reduced and investments were made in improving the quality of the content (learn more in the table on page 18). GRI LA10 All staff undergo an annual performance evaluation which considers the skills the company regards as essential for business. The process is reviewed on a half-yearly basis and carried out through a meeting with the leaders and results in the creation of the Individual Development Plans. GRI LA12 100% OF EMPLOYEES UNDERGO AN ANNUAL PERFORMANCE EVALUATION Sustainability Report

20 walmart GRI LA3 MAIN BENEFITS Meals Life insurance Medical and dental assistance Maternity leave extent Payroll loans Drugstore discounts Christmas Kits Emergency loans World Conference on Women in partnership with the Working Mother Media which focused on developing women. The company ended 2012 with 44,639 women employees, equivalent to 54.2% of the headcount. More women than men were hired last year and represented 54.9% of total hires. Women distributed in leadership positions managers, directors, coordinators and supervisors in stores, corporate offices and distribution centers amounted to 1,072, or 32.9%* of the total. DIVERSITY, REMUNERATION AND BENEFITS Fostering diversity and inclusion in the workplace is one of Walmart s goals. The company focuses on including people with deficiencies and combats any form of discrimination based on race, sexual orientation, religion and gender. One of the highlights of 2012 was the action taken to achieve gender equality and appreciate women s role. One example was the adhesion of the directors to the Conselho de Mulheres do Walmart Brasil (Walmart Brasil s Women s Council). The Council has 17 members, 11 women and 6 men, who work in different areas of the company. Since its creation, the group has held discussions on development and careers which led to initiatives such as Mentoramento para Mulheres and 100 Mulheres na Liderança (Mentoring Programs for Women and 100 Women Leaders program) (further information on page 49). At the same time Walmart, in partnership with the International Women s Forum (IWF), organized the Investing in Women Leaders: a Positive Change conference which was attended by 40 of the company s executives in Brazil. Another event promoted during the year was the participation by Walmart representatives in the In terms of people of different racial backgrounds, the number of black people and those who regard themselves as being of mixed race came to 31,829, which correspond to 38.7% of the workforce. This group accounted for 18.8% of leadership positions. GRI LA13 Walmart also makes no wage differentiation by gender and does not undercut the legal minimum wage. A minimum and maximum level is established for each function and there may be some differences due to regional factors, weekly workload, time with the company, professional experience and performance. The company also has the Programa de Participação nos Resultados PPR (Profit-Sharing Plan) which encourages workers to exceed set targets and results and make additional gains. GRI LA14 Walmart has relations with over 100 labor unions in Brazil. It imposes no restrictions on employees joining unions. All workers are covered by collective bargaining agreements and other policies related to health and safety, including those dealing with practices recommended by trade associations. There are variations in the issues covered by the Collective Working Agreements for each region of the Country. GRI LA4 20 * Women make up 19.6%.of the company s senior management (president, vice-presidents and directors).

21 ARTICLE TALENTS CAN YOU PLAN YOUR CAREER? Alexandre Santille* New technologies and accelerated business growth have reduced professionals ability to foresee the job market, forcing them to constantly reevaluate their careers. The front runners in this state of change are those who plan ahead and train themselves by combining the current needs of the market with their own aspirations, values and skills. Taking care of your career requires strategy, time, dedication and discipline. However, before thinking of these aspects it is worth knowing that most people make mistakes not because of any lack of information about the market but about themselves. As a result, the better understanding an individual has of his or her attributes skills, values, interests and personality the more precise will be his or her choices and subsequent satisfaction. The ideal position is to have a better idea of one s own motivating forces and a clearer view of the possibilities of working while still keeping an eye open for new opportunities that arise. Nowadays, there are a number of options to choose from. While some professionals look for promotion by rising through the organization hierarchy, others try to develop themselves horizontally, through opportunities in other functions or areas, expanding their knowledge and undergoing different challenges. Some professionals tend to specialize, becoming experts in certain subjects, while others prefer a more systemic view of the business. The ideal in this situation is not to think about a dream job but how to develop skills. The lack of information on how the future will turn out makes this process difficult and that is why it is important to identify the skills that will remain essential as time goes by. Many people who have been working for years sometimes resolve to make a complete career change. This occurs when people notice in mid stream that they are not where they wanted to be and decide to reinvent their professional lives. In this case, a lot of courage is needed to perform a new role and all its different activities. To avoid this kind of disappointment people are recommended to assess their own employability at least once a year and reflect on where they want to go and what path to choose. Reviewing objectives and projects on a regular basis helps to position the career in the right direction without failing to take advantage of the opportunities that the market offers. It is no easy task to carry out all this analysis alone and it is worth obtaining help from experienced people. The choice of a mentor may be made by the professional or the company. In this case, the mentor should not only have the ideal behavioral techniques but also technical knowledge and help in developing the work within the organization. Therefore, one of the biggest challenges in managing one s career is to take the initiative and look for the common denominator between your values, skills and what the market needs. This thought should be borne in mind in all professional phases as each period will bring new challenges. * Graduate in Business Administration from the FGV, with a master s degree from PUC SP and doctorate in Experimental Psychology from USP. He is currently CEO of LAB SSJ, learning solutions consultancy. Sustainability Report

22 walmart SUSTAINABILITY MAnagement GRI Walmart Brasil works in alignment with the concept of sustainable development, which means that today s resources should be preserved and used correctly so they will not be scarce for future generations. To do so, it encourages changes in the standards of production, consumption and use of natural resources. The company has three strategic pillars which uphold its sustainability management: Climate and Energy, More Sustainable Products and Waste. The initiatives that deal with Climate and Energy and Waste are carried out in the Walmart stores and other operating areas and also affect customers and society. The initiatives related to the More Sustainable Products pillar is developed with Walmart suppliers (learn more about this on page 31). These three themes are put into practice through eight platforms structured on working groups with defined goals and objectives. The eight platforms are: Supply Chain, Construction, Logistics Chain, Zero Impact (waste management), Raw Material, Climate and Energy, Conscientious Customers and Conscientious Employees. RAISING AWARENESS Raising the employee s awareness is a strategic focus of this approach. Initiatives such as Mobiliza Geral (General Mobilization), the sixth version of which was held in 2012, and the My Sustainability Plan (MSP) show how concepts THEMES FOR THE MY SUSTAINABILITY PLAN My Life My Planet My Health Responsible purchasing Less impact from consumption habits, such as not acquiring pirate products and giving preference to items from companies that are recognized as operating correctly. Water Encouraging the reduction of wasting and reusing water. Exercises Practicing sports, walking etc. Community Encouraging citizenship behavior, such as voluntary work, conscientious voting, not parking in places reserved for people with deficiencies and the elderly, not throwing litter on the street etc. Energy Encouraging the reduction of waste of electrical energy and oil by-products, such as fuel, helping to combat global warming. Food Guidance on the consumption of healthier products and/or in the right quantity. Family Encouraging employees to spend more time with their families. Waste Making efforts to reduce waste and, in turn, the consumption of natural resources by adopting selective collection, for example. Smoking Supporting anti-smoking measures and also encouraging those you know to give up smoking. 22

23 related to conscientious consumption and social and environmental responsibility can be adopted on a daily basis. The General Mobilization is a training program to publicize the company s practices and initiatives that may be incorporated into work or personal activities, as well as actions by the employees themselves which serve as an example and are shared. Last year, the training video covered the concept of sustainability and conscientious consumption focusing on waste. Since it began in 2007, General Mobilization has been developed in partnership with the Instituto Akatu pelo Consumo Consciente, a respected voluntary organization. The MSP encourages the employee to adopt sustainable practices in three categories of action My Life, My Planet and My Health. Each one of these has sub-themes setting personal goals which employees can choose. The result of the conscientious raising actions can also be seen in initiatives such as the Clube da Solidariedade para Emergências (Solidarity Club for Emergency) run by the Walmart Institute. Workers have made donations totaling R$780,750 that have helped around 400 employees since the initiative s launch 3 years ago. More than R$305,000 was raised In 2012 alone and 79 needy employees benefited from the support of the fund, maintained with voluntary and monthly contributions of R$1, R$5 or R$10. The company contributed the same amount as the employees. Of the current workforce throughout Brazil, 13% make contributions. GRI EC8 ENVIRONMENTAL IMPACTS Walmart assesses the impact of its operations on the environment in order to find ways of making its processes more efficient and use natural resources in a more rational way. In 2012, the company became involved in the Parceria Empresarial Pelos Serviços Ecossistêmicos PESE (Business Partnership for Ecosystem Services) that brought together eight companies. GRI 4.13 PESE s aims are: helping to understand and manage the impacts and dependencies on biodiversity and ecosystem services, developing business strategies that promote a balanced ecosystem and show the business value of this practice, exchanging experiences and publicizing success cases and the constant development for the corporate management of ecosystem services. The methodology used in the partnership studies is the Ecosystem Services Review (ESR). This is a pioneering method to guide corporate managers in developing strategies which respond effectively to risks and opportunities from the impact and dependency of their companies in the ecosystems. Walmart is using this methodology in the beef area, particularly from the Amazon region in order to understand the impacts and dependencies related to biodiversity and the ecosystem services of that region. The experience will be part of the learning curve for the future replication of the methodology in other products and regions. PESE is also coordinated by the Centro de Estudos em Sustentabilidade da Escola de Administração de Empresas de São Paulo FGVCes (Study Center on Sustainability of the São Paulo Business Schools Administration Center), the Conselho Empresarial Brasileiro para o Desenvolvimento Sustentável CEBDS (Brazilian Business Council for Sustainable Development) and the World Resources Institute (WRI). Its main financing comes from the United States Agency for International Development (USAID). GRI 4.11 Sustainability Report

24 Environment ENERGY GRI en3 EN4 The Climate and Energy pillar of Walmart s sustainability management reflects the company s target of having 100% of its energy supplied from renewable sources. In 2012, Walmart Brasil officially began migrating its stores to the free energy market where 100% of the supply will come from renewable energy sources from small hydroelectric and biomass plants. Forty-nine units migrated in 2012 and the aim is to expand the program to another 90 by the end of These units will correspond to around 40% of total energy consumed. This change will also eliminate the need to use diesel generators at peak periods, thereby reducing greenhouse gas emissions and pollutants. As the diesel generators are disconnected, there will be an additional benefit in the reduction of fuel transported to the stores and the emissions generated by this transport. Direct energy consumption in 2012 came to 3,808,255.7 GJ and indirect energy consumption to 901,695.8 MWh (3,247, GJ), 13.1% higher than 2011, due to the opening of new stores. One of Walmart Brasil s goals is to have its new stores 25% more efficient in energy consumption. The new units that come into operation were designed to be more efficient and the results will be seen during In 2012, Walmart replaced refrigeration equipment in more than 200 existing stores. The new equipment uses less energy and has lower greenhouse gas emission indices. There will be also other efforts to increase energy efficiency in the company s buildings during the year. CONSUMPTION OF DIRECT ENERGY (GJ) Another commitment for 2013 is to introduce a best practices program to reduce consumption in the stores which will include employee training. The company will also begin an Energetic Efficiency Project. This will involve investments on replacing existing equipment with others that are more efficient and a pilot program for self-generation in energy from renewable sources. EMISSIONS 74,419.5 gas 3,246,104.9 energy 487,731.3 diesel The Climate and Energy pillar of Walmart s sustainability management aims to reduce greenhouse gas emissions (GHG) by 20% in the stores by 2012 and by 30% in the new stores. This goal has been achieved globally. The biggest GHG generation in Brazil comes from the refrigeration system. The process of replacing the old refrigeration equipment releases the gases contained in the system and this increased the emissions in 2012 in Brazil. This prevented the target being met but also created the conditions needed to bring about a significant fall in emissions from The new equipment requires less maintenance and has lower GHG emissions. The impact of the logistics on the emissions has also been considered. Transporting goods creates pollutants and greenhouse gases. To reduce them, the company is working to integrate the logistics management more with other areas to promote an alignment to the business needs through more sustainable practices. Walmart is developing initiatives to increase vehicle efficiency in partnership with suppliers. These include the use of deflectors and reducing trips with empty trucks. It has also been increasing the use of vehicles in its fleet with the Euro 5 engine technology which reduces pollutant gas emissions into the atmosphere. Furthermore, the company is renewing its fleet of private cars used by senior management with flex motor vehicles to maintain a more sustainable logistics system. Another initiative in the logistics area that will have long-term results is the Walmart Brasil Transport Sustainability Forum, which was held for fifth time in The event is a platform for engagement with suppliers from the transport market, industry, academic institutions and the public sector. 24

25 ECO-EFFICIENT STORES Walmart s eco-efficient stores are the result of the company s strategic sustainability vision which brings together the Climate and Energy, Waste and More Sustainable Products pillars. Since 2009, all the new hypermarket stores have adopted the guidelines in the Sustainability Initiatives Menu which includes solutions to be used at the beginning of the works and in their daily operations. Among the outstanding eco-efficient improvements developed in 2012 were: the improvement in the Energy Management System (EMS), the use of LED lighting in a number of areas such as parking lots, sales floor, stockrooms, preparation and cold rooms and the reduction in energy consumption in the refrigerator and frozen storage areas, whether by placing doors on the display units or by replacing them with walking cooler/freezer equipment. Walmart will increase its investments in initiatives in the coming years which will bring a faster return in the areas of energy, water and refrigeration in alignment with the company s best international practices. THERE ARE AROUND 60 POSSIBLE INITIATIVES BEING ADOPTED IN BUILDING AND REFORMING STORES. GET TO KNOW SOME OF THEM: Skylights in the roof allow natural lighting to be taken advantage of, thereby reducing energy consumption. Reducing the height of the roof leads to a less air conditioning equipment, thereby reducing energy consumption. Water-based paints have fewer pollutants. Restrooms with automatic taps and double action flushing systems help reduce water consumption. Store signs and communication material can be made from recyclable material and be recycled at the end of its working life. Installing concrete blocks with grass in parking lots in a way that helps absorb rainwater. LED type fluorescent lamps inside the stores consume less energy. Replacing gases that damage the atmosphere with fluids based on water in the store refrigeration system. Sustainability Report

26 walmart WASTE Managing waste is one of Walmart s sustainability strategy pillars and the company s global aim is to stop sending solid waste from its operations to landfills by The Zero Impact program was introduced to Brazil in 2008 and is one of the main means of doing so. It establishes 5 complementary and consecutive steps which should be adopted in all the units, including stores, offices and distribution centers (see table with the percentages of materials destined for landfills, recycling, turning into compost and animal feed on page 27). Walmart generated waste of 92,947 tons in 2012, of which 40% was not sent to landfills. The year 2012 was marked by a process in which the procedures for the approval of services providers were reformulated. This was reflected in the improved performance of the stages of the Zero Impact program for 2013, in accordance with the company s Ethics & Compliance Policy. The waste management strategy goals also led to a reduction of 5% in the use of packaging throughout the supply chain by 2013, as well as a reduction of 50% in consumption of plastic bags. This last goal was achieved by the end of The company has reduced the number of plastic bags distributed in the stores by 1.4 million units or 5.1 tons of plastic. This result was achieved through the Cliente Consciente Merece Desconto program (Responsible Customers Deserve Discounts) which offers a R$0.03 discount for every 5 products the customer buys that do not use plastic bags. The total amount of the discount granted by the program came to R$1.06 million in the year, equivalent to 30 million bags. Part of the company s commitment in this area also involves consumer participation. Customers have 250 recycling stations available to collect glass, paper and cardboard, plastic and metal. This initiative also contributes to job and income generation for street collectors who form cooperatives that operate in partnership with the company. The collection points, which will be expanded to the stores that are still not part of the program, are an initiative aligned to Brazil s National Solid Waste Policy which aims to establish a national reverse logistics process to receive products and packaging after consumption. Further to the collection of batteries and mobile phones that began in 2011, another initiative was put into practice last year which focused on the reverse logistics of drugs. Collecting boxes were placed in Walmart s drugstores in the States of São Paulo, Rio Grande do Sul and Pernambuco for customers to dispose of drugs when the validity period has expired. The waste collected that poses a risk to human and animal health is separated and transported by accredited companies which carry out this kind of work. DIRECT MATERIALS IN 2012 GRI en1 (TONS) ,113 6,880 A4 paper polystyrene Bandejas poliestireno trays stretch film non-renewable food film plastic bag total 142 total weight of recyclable input 2% percentage of recyclable input 26

27 MATERIAL CONSUMPTION GRI en22 Material Destination Weight In tons 2012 Paper and cardboard Recycling 26,578.9 Plastic Recycling 2,850.7 Metals Recycling Wood Recycling 1,036.5 Glass Recycling 72.6 Fluorescent lamps Recycling 15.2 Oil Recycling 3.8 Organic Compost and animal feed 5,169.1 Electronic Recycling 4.4 Vegetable oil Recycling 98.0 Bottles and cans Recycling 39.4 Tires (unit) Recycling - Batteries Recycling 27.3 Others Total waste Waste sent to landfills Organic products sent for compost or animal feed Total recycled or reprocessed waste Total waste diverted from landfills Percentage diverted from landfill , , , , , Sustainability Report

28 ARTICLE SOLID WASTE POLICY IN THE Minds AND HEARTS OF CONSUMERS André Vilhena* 28

29 There are 7 billion people on the planet and if everything works out, the population will continue to grow as will consumption. Although billions of people still live in poverty, there has been a notable reduction in misery in a number of parts of the world. The demarcation of this poverty line is controversial and has raised heated debates. Many people say they are pleased with little while others are unhappy even with a lot. The pursuit of practical solutions is an inevitable aspect of consumption. We are increasingly unwilling to waste time cooking (unless it is a hobby), cleaning, washing and repairing things. We prefer to spend our time on leisure, improving professional skills, getting to know people and expanding our social connections. Industry and commerce make great efforts to meet this demand on a daily basis. Conquering the hearts and minds of consumers is an intense battle fought in the background by highly qualified professionals from different business areas. However, these minds are also constantly changing which increases the speed of the transformations and puts even greater pressure on the business sector. Tomorrow s consumers will be different from today s. They will certainly be looking for even more diversified attributes in their consumption choices. Every human and business activity creates some environmental impact. If we could learn how to control its collateral effects, we would achieve sustainable development. Can we do this? It would be frightening if we reached the conclusion that it would be an impossible task. Waste Policy (local acronym PNRS) in This new law is innovative in many aspects and is helping the country mobilize in pursuit of solutions. The retail sector has its part to play as no other sector of the economy communicates more with the consumer. The retailer has great power to influence people and change habits. The PNRS created a modern concept of shared responsibility for dealing with items after consumption. It lays down individual and associated actions involving consumers, industry, retail, street collectors, recyclers and public authorities. The law is regulated through sector agreements in which the roles of each player are defined. Without the combination of efforts and efficient governance, we will be unable to make the jump in the quality in solid waste management in Brazil that we have been dreaming about. Walmart Brasil is among the most proactive of the retailers. The analysis of its initiatives helped in the creation of specific topics for the new Brazilian law. Its projects should inspire the entire sector while obviously respecting the differences in the size of each business. However, the essence does not change. Store space cannot be turned into a recycling shed but complementary actions that encourage changes in consumer behavior are important and welcome in the pursuit of the goals established for the first phase of the National Solid Waste Policy. The change in consumption standards has brought a huge problem to urban centers. As we pursue practical solutions and the quality of the products is maintained, we are creating more dry waste in increasingly more populous urban areas. There are many reasons for this concentrated population in large urban centers. How do we face up to this challenge? Where will we put the waste? Are today s consumers bothered about this issue? The answer is yes and there is this concern in Brazil. Thanks to the commitment of a number of sectors of our society, Brazil finally approved its National Solid * Executive director of Compromisso Empresarial pela Reciclagem Cempre (Business Commitment for Recycling), member of the Conselho Superior de Meio Ambiente da Fiesp Cosema (Superior Council for the Environment) and executive director of the Global Alliance for Recycling and Sustainable Development. Sustainability Report

30 Suppliers COMMITMENTS ASSUMED BY WALMART BRASIL GRI 4.12 The Sustainability Pact was signed with Walmart Brasil s main commercial suppliers in 2009 and led to a series of commitments that guide the sustainability management in the supply chain and cover questions of social and environmental responsibility in the Brazilian Amazon region. 30 Livestock Pact Walmart Brasil has committed itself not to take part in the financing, use, distribution, sale and consumption of livestock products that involve any illegal activity in the value chain, particularly deforestation and slave-like labor. Timber Pact This agreement promotes the financing, production, use, sale and consumption of timber and forestry products with sustainable origin certification. Soybean Pact This agreement establishes restrictions on the financing, production, use, distribution and consumption of soybean grains (fresh or processed) that originate from areas where there has been illegal deforestation in the Amazon biome. Pact for the Eradication of Slave Labor This contract establishes commercial restrictions on companies and/or bodies identified as using slave-like labor practices in their productive chain.

31 Suppliers GRI Encouraging small producers and extending responsible activities are some of the practices to ensure healthy safe food Walmart has a network of suppliers that covers more than 7,000 companies of different sizes and productive segments. The company is committed to building ethical, transparent relationships that promote sustainable development and the strengthening of regional companies. As a result, it can offer increasingly more products with sustainability differentials, one of the pillars on which its business is founded (read more on the strategic pillars on page 22). The company handles this area by working to strengthen communication channels, tools and projects which ensure that the products sold in the stores are aligned to the Everyday Low Prices philosophy. The products should also originate from the rational use of natural resources and encourage the social and economic growth of local communities. The success of this strategy stems from the engagement of its value chain, with the commercial partners playing a highly important role. This is because only 8% of the environmental impact of the Walmart value chain is directly caused by the company s activities, according to a survey carried out in 2005 by the American consultancy Blue Sky. To manage its various sustainability initiatives with the suppliers chain, the company monitors and analyses social and environmental aspects with the same discipline as its commercial and financial management. This is done through a sustainability plan that is discussed and established with the supplier (Joint Sustainability Plan). Forming solid partnerships with suppliers is a job that needs to be continuously improved. Dialogue with partners, researchers, NGOs and government sectors provide support for a number of commitments directed at a more sustainable future. Walmart takes part in several such initiatives, such as the discussions of the Grupo de Trabalho da Pecuária Sustentável (Workgroup for Sustainable Cattle Raising), Movimento Conexões Sustentáveis (Sustainable Connections Movement) which is a signatory to the Pactos da Madeira, da Soja e da Pecuária (Timber, Soybean and Livestock Pacts) and the Movimento Empresarial pela Biodiversidade (Corporate Movement for Biodiversity), Fórum Clima Ação Empresarial sobre Mudanças Climáticas, Fórum Amazônia Sustentável (Sustainable Amazon Forum), Compromisso Empresarial pela Reciclagem Cempre (Business Commitment for Recycling), Conselho Empresarial Brasileiro para o Desenvolvimento Sustentável CEBDS (Brazilian Business Council for Sustainable Development) and the Green Building Council Brasil (GBC). Walmart is also a partner of the Instituto Ethos. Wide-ranging and challenging initiatives, such as the End-to-End Sustainability program encourage suppliers to develop solutions that reduce the impacts throughout the value chain, right from the extraction of the natural resources to the post-consumption stage. In the second edition of the program, for example, 13 companies agreed to take on the challenge of creating a product with lower environmental impact and succeeded (see the results highlighted on page 32). A total of 23 companies have taken part in the program since the first edition was held in Walmart s private-label brand products are an important source of promoting changes in the value chain concept as they allow innovation in the productive processes and undertaking of good social practices and environmental care commitments. There are more than 1,700 products in different categories. Walmart reduced the packaging material of many of its products in 2012, such as the soap Sabonete Antibacteriano Equate (by 35%) and the Absorvente Equate absorbent (by 19%). It also launched a Refil de Sabonete Antibacteriano refill with 85% less packaging than a conventional flask in this category. Other good examples of more sustainable packaging are the Ovo de Páscoa Sentir Bem Easter egg with reusable packaging and the Sacos para Lixo Bom Preço litter Sustainability Report

32 Suppliers bags, with 51% green polyethylene (originating from sugar cane, a renewable source) and 49% recycled polyethylene. All the private-label brands cardboard packaging is certified by the Forest Stewardship Council (FSC). This certification guarantees the origin of the wood and all the process stages and guides consumers on choosing products that do not harm the environment. This also helps the social and economic development of the forestry communities. At the same time, the packaging is used to publicize information on sustainability and recycling. The message also appears in braille to show respect for blind consumers and help them choose and be independent in their daily lives. MANAGING THE CHAIN The value chain involves various stages of the productive process. It ranges from the extraction of natural resources needed for production and the final consumer attendance, including the proper disposal of packaging and the waste generated. To achieve a more sustainable consumption level, all the links in the chain must be connected and care taken to improve their activities. The retail sector, particularly supermarkets, can carry out an important role in the pursuit of sustainable practices by modifying their processes as well as positively influencing suppliers and consumers. With this in mind, Walmart s private-label brand joined the End-to-End Sustainability program, a company initiative to encourage industry to develop more sustainable products. Improvements were developed in the second edition through the Sentir Bem brand from the planting of oatmeal grain to the disposal of the packaging. There was a reduction of 208 tons of waste generated in the production and savings of 1,640 kilos of packaging material over a year. GRI EN27 For this reason, the Walmart global Sustainable Agriculture platform that presents targets on three pillars support for small and mediumsized producers and their communities, efficiency in production and reducing waste and increasing quality control, and the origin of products performs a fundamental role. To control the more sustainable origin of the agricultural products, Walmart established global targets for two greatly consumed products that have contributed to the deforestation of the planet: palm oil and beef production. Results from the End-to-End Sustainability program GRI EN equivalent tons of CO 2 issued tons of waste created - 2 million liters of water 19 million kwh energy consumed The reduction in the impacts achieved by the 13 products created in the second edition of the End-to-End Sustainability program was calculated by the Centro de Tecnologia de Embalagens CETEA (Center for Packaging Technology) which estimated the sale of products in the Walmart chain over a period of 12 months. The CETEA is associated with the Instituto de Tecnologia de Alimentos (Institute of Food Technology) and has evaluated and accompanied the opportunities for change with each supplier from the start to the end of the productive chain since the program began. 32

33 Walmart Brasil assumed the leadership of this commitment in the beef chain to ensure that by 2015 the company at global level would not acquire products originating from deforested areas in the Amazon region. This will be confirmed by an independent audit plan. To meet these obligations, a beef monitoring platform was developed that accompanies the information provided by the supplier on the origin of the beef. It will be implemented in 2013 when all the suppliers join the monitoring system and include their data (see the following box). Walmart Brasil also drew up a policy for the responsible purchase of beef. GRI HR6 HR7 The supplier management process includes an annual prize for outstanding providers of products and services. Fifteen suppliers received awards for presenting differentiated performance in areas such as attendance, partnership, innovative solutions and social and environmental responsibility during The awards were presented at an event held in the Transamérica Expo Center in São Paulo at the beginning of The prizes for the year went to: Accenture do Brasil, Aidar SBZ Advogados, Ambev, Colgate, Diageo, Grupo Eletrofrio, Higident, Instituto Akatu, Instituto Aliança, Nestlé DPA, Sanofi, SC Johnson, Seara, Sony and Unilever. As part of the process of continuously improving relations with suppliers, Walmart also launched a new Suppliers Portal which pro- vides information for suppliers on payments and prepayments for operations carried out by its commercial partners in all regions where the company operates. The new portal gives partners access to information in a single electronic space with no need to consult different platforms. MONITORING THE ORIGIN OF BEEF Walmart s beef monitoring and management system results from a project that took one year and a half to establish. It gives consumers greater confidence on the origin of the beef and helps livestock breeders in the Amazon region have a more sustainable production. The tool allows the cross sharing of information such as mapping deforested areas, indigenous lands and conservation units with other public lists showing restricted areas and slave labor. The system can automatically block the purchasing order and notify the supplier should any risk be identified. The tool allows Walmart s meatpacking partners to register geographical information on the farms from which they buy beef. One of the goals is to expand the monitoring capacity from the Amazon region to other biomes. Another complementary action by Walmart in the beef chain is its encouragement to livestock breeders in the Amazon region to develop more sustainable production with lower impacts. This initiative will be fostered via technical support to the farmer, in partnership with The Nature Conservancy NGO through a pilot scheme in the municipalities of São Félix do Xingu and Tucumã in the southeast of Pará State, one of the fastest growing livestock frontiers in Brazil. Sustainability Report

34 REPORT TRACKING DEVELOPING BUSINESS ETHICS Adalberto Marcondes The economy is one of the most dynamic areas of human activity and its historical development is part of the civilization process itself. Means that were accepted as normal in a particular period may be regarded as criminal in other times. This has occurred in relation to work and products. Slave labor was legal in Brazil until just over 100 years ago yet today, a century after abolition, slave-like labor still exists in cases where people are forced to work under degrading conditions. More than 2,000 people were rescued from this situation in Most were held captive in the Amazon region, particularly in Pará State, with cattle ranches responsible for most of this grim ranking. Brazil began a strong expansion at the beginning of 1970 towards the West and North, territories with abundant nature and an immense source of natural resources. Livestock farming was one of the main features of this occupation, with the Brazilian herd expanding from 92.5 million head in 1974 to 213 million in 2013, according to the official statistics agency, the IBGE. The government encouraged colonization of the territories and deforestation for livestock and agricultural production from the beginning of this occupation. This liberalization created a culture of disorderly occupation and gaps in the official land registration processes and use of the law. This uncontrolled situation had a direct effect on the quality of business in the region, particularly the globalized value chains, such as agriculture and livestock. The way of occupying the Amazon territory has changed in this new century. Ethical demands from the markets are redirecting efforts to production models which have a lower environmental impact, less deforestation, more social benefits and greater use of technology. Farms on the Labor Ministry s slave labor black list or with problems related to encroaching on indigenous areas or reserves of any kind, along with those which have deforested areas 34

35 ONE OF THE MOST TRANSFORMING FACTORS IN THE DEVELOPMENT OF HUMANITY AT THE TURN OF THIS CENTURY IS BUSINESS ETHICS. MUCH OF WHAT WAS CONSIDERED NORMAL IN THE PAST IS NOW REGARDED AS CRIMINAL illegally, are being pushed outside the market. The use of technologies and modern livestock management processes can free a lot of land currently used for cattle raising for new activities. The government estimates that the territory currently used for cattle production of around 190,000 hectares could shrink to around 133,000 hectares, with the herd increasing to almost 230 million head in This would release a lot of land that could be used for agriculture or the recovery of the forests. Part of this move towards more technology and productivity comes from the pressure of the Brazilian and international markets for meat that does not cause social and environmental problems. This century began with a strong demand for the modernization of the management processes linked to nature to be modernized. Combating deforestation in the Amazon region is one of the most high profile battles. Governments, voluntary organizations and companies have come together to create mechanisms to control and manage livestock production and make it more productive while using less land. This led to the creation of organizations defending sustainable livestock breeding and restrictive laws on the indiscriminate use of the land, such as the Rural Environmental Register, a structural mechanism for the sustainable management of the land and farms. The most recent step in the direction towards a more ethical relationship between the players in the beef chain is the introduction of processes that can track beef from its origin on the farm through the meatpacking plant to the supermarket shelf. This method give customers guarantees on the quality of the food that arrives on their table and ensures that the meat sold was produced in registered legal farms where no illegal deforestation occurred and where workers were treated in a dignified way. A production model needs to be built that can be reconciled with the conservation of the Amazon Ian Thompson (THE NATURE CONSERVANCY) A partnership is fundamental in encouraging producers to adopt sustainable practices on their land James Cruden (Marfrig Beef) We believe in agreed solutions to promote the best livestock productive practices for Brazilian beef Maria Cecília Wey de Brito (WWF Brasil) It is important to accompany the productive chain from the birth of the animals to the delivery of the product to the consumer Mauricio Voivodic (Imaflora) Sustainability Report

36 SUPPLIERS DISTRIBUTION BY PRODUCT 47% Horticulture 19% Delicatessen 15% Grocery 8% Bakery 7% Butcher LOCAL SUPPLIERS GRI EC6 Engaging with and supporting small and medium-sized rural producers is also one of the pillars of the global Sustainable Agriculture platform, and has helped to develop communities in which Walmart is present. By doing so, the company meets the demand of its customers by providing products with features from different regions of Brazil while maintaining the standards of quality and low prices associated with the brand. The Producers Club, which marked 10 years of existence in 2012, is an example of how this strategy is carried out and expands access to small and medium-sized suppliers in the retail segment. The initiative is also part of Walmart s efforts to contribute to the federal government s program Brasil sem Miséria (Brazil without Misery) created to raise income and improve popular welfare, particularly of extremely poor families outside the various government programs.in 2012, products such as manioc flour, honey and nuts from the Producers Club were added to the mix of products in the stores. The Producers Club is a commercial channel through which the farmers sell their products directly to Walmart. It is a partnership that adds high quality items produced in line with the social and environmental legislation and without the need for middlemen. The arrangement is not exclusive but gives Walmart preference in acquiring the amounts available, provided they meet the established technical standards and can be sold at comparable market prices with equivalent products. On the other hand, the club members have the advantage of differentiated payment periods and the possibility of prepaid credit. The Producers Club was present in 12 Brazilian states in 2012 and benefitted around 10,500 family farmers. More than 1,000 items in Walmart stores are marked individually or receive special identification on the shelves, proving the origin and respect for the standards, technical recommendations and the applicable laws. The Producers Club will receive investments in 2013 for training for a period of two years to promote the inclusion of the small producers in Brazil. 36 4% Fishmonger NUMBER OF FAMILiES 10, ,

37 STATES WHERE THE PRODUCERS CLUB IS ACTIVE THE CLUB SEAL GAVE ME SALES VOLUME, STABILITY AND ACCESS TO THE SUPERMARKET SHELVES. WE GREW BY 33% IN LESS THAN A YEAR. Fernando Yoshiro Neguishi, producer of the Aica mushroom brand (Mogi das Cruzes SP) WE JOINED THE CLUB AND HAVE NOT STOPPED GROWING. WE NOW EMPLOY ALMOST 30 PEOPLE. Evandro Andreazza of the Forno Velho sweets and jam company (Caxias do Sul RS) I USED TO SPEND MORE TIME ON THE ROAD THAN IN THE FIELD. NOW WE LOAD THE TRUCK, DELIVER AND GET STRAIGHT BACK TO PRODUCE MORE. Adriane Barbosa de Campos, horticulture producer (Guaíba RS) WE WENT FROM SLAUGHTERING 600 TO 700 CHICKENS A DAY TO 2,500 TO 3,000. Messias Luiz Batista, producer of naked neck hillbilly chicken (Ivaiporã PR) THIS WAS THE CHANCE TO CUT OUT MIDDLEMEN AND PROFESSIONALIZE THE WORKFORCE AND THE FINISHING OF THE PRODUCTS. Tereza D Ávila, consultant at the Cooperativa Agroindustrial do Caju Central Copacaju (Caju Agroindustrial Cooperative) (Tururu, Fortim, Ocará, Aracati, Chorozinho, Granja, Aquiraz, Barreira and Icapuí CE) Sustainability Report

38 REPORT MICROPRODUCERS FAMILY FARMING IN BRAZIL INEQUALITY IS STILL A CHALLENGE FOR SMALL PRODUCERS IN BRAZIL Juliana Rocha Family farming plays a significant role in Brazil s agricultural production but small producers are in an unequal position when it comes to growing and selling their products, depending on their region. Farmers in the South, Southeast and Midwest are more capitalized and have access to modern techniques and equipment and find it easier to sell to the retail trade. Farmers in the Northeast, particularly the semi-arid zone, face poverty and live with the difficulties of drought. We had a good crop [2012/2013] and family farming income rose but we have a diverse situation. The Northeast has the greatest concentration of rural poverty in the country and faces large problems, said Valter Bianchinhe, Family Agriculture secretary of the Agrarian Development Ministry (MDA). Francisco Graziano was one of the creators of the Programa Nacional de Fortalecimento da Agricultura Familiar Pronaf (National Program to Strengthen Family Farming) in He also highlights the period of prosperity which some of these farmers are enjoying, thanks to the arrival of technology and sustainability techniques. Small farm- 38 Family Farming in Figures 4,3 million family farmers 1 16% 84% of farms are run by families is non-family farming 10% of GDP comes from family farming Sources: 1. IBGE Agricultural and Livestock census; 2. Ministry of Agrarian Development; 3. Banco do Brasil 38% of the gross agricultural and livestock production comes from family farming 160 million reais is the upper limit of annual gross income to be classed as family farming by the government 2

39 ers in Santa Catarina, Paraná, São Paulo and Espírito Santo are now capitalized. They do not compete with agribusiness but are part of it except for those in the semi-arid region in the Northeast. According to the MDA, the latest figures available from the agriculture and livestock census of 2006, announced in 2009, show that there were 4.3 million family farmers in Brazil, equivalent to 84% of all agricultural producers in the country. Non-family farmers account for only 16%. Bahia State has the largest number of family farms, with 15%, followed by Minas Gerais, with 10%. Rio Grande do Sul is in third place with 8%, followed by Ceará with 7.8%. Four criteria define family farmers: the first is to have a gross income of up to R$160,000 a year per family, the limit that grants access to the Pronaf, credit lines and technical and social assistance programs, such as the Programa de Aquisição de Alimentos PAA (Food Acquisition Program). The other three are to employ only family members have a small production with no hired labor to live near or on the farm and to have an average area of 50 hectares. Some crops are typical of family agriculture in Brazil, such as the production of horticulture and fruits and even fish. This is because they are easier to handle in small properties and the quality is linked to the care the producer takes on a daily basis. These farmers produce 87% of the manioc planted in Brazil, 70% of beans, 46% of corn, 34% of rice and 21% of the wheat. They are responsible for 59% of hog farming, 50% of poultry and 30% of beef cattle. They also play an important role in milk production and account for 58% of all milk produced. Although they represent 85% of the farms in the Country, the smallholders have a much lower share when the criterion is income created from production. The MDA says 38% of the gross value of the agricultural and livestock production comes from family farming, equivalent to 10% of Brazil s GDP. CHALLENGES Despite the advances made in income and the conditions of farming families, Bianchini admits that there is still a long way to go before rural poverty can be ended. He estimates that one third of the small producers are strongly integrated to the market, with access to credit and technical help, and another third are in the transition period, with access to the assistance programs. The remaining farmers over one million families still live in poverty and need to be brought into the agribusiness market. He mentions the government assistance programs to help these farmers, such as the 2012/2013 Family Farming Plan which released R$22.3 billion in resources, including credit lines from the Pronaf and the PAA. Through the Pronaf, Banco do Brasil granted R$24.2 billion in credit to small farmers in 2012, an increase of 20.7% over At the same time, the participation of private sector consumers in facing up to the challenges of rural poverty is fundamental, says Bianchini. The retail demand for family farm products helps insert them into the market and consumers can play their part by demanding products with seals and certificates showing the production originated from family farming. Graziano also raises the role of cooperatives in inserting the small producers into agribusiness, particularly to find ways of selling their production and granting credit to workers. This is what Cooxupé, a cooperative that represents 11,500 coffee producers in the South of Minas Gerais, the Cerrado Mineiro area and part of São Paulo state, does for its members, 80% of whom are small farmers. It works well for the small producer because the combined production results in a large volume to be sold, says the Cooxupé marketing director, Jorge Ribeiro Neto. The cooperative transfers credit from the financial system to its members and uses swaps as a form of credit, with the producer buying input and paying with the post-harvest production. It also offers technical assistance and raises funds so that small farmers can have more sustainable production. The government is also preparing two programs to expand technical assistance to producers and raise environmental awareness. These are due to be launched with the next Harvest Plan. 50 hectares is the average size of a family farm 2 24,2 billion reais was granted by Banco do Brasil in 2012 in credit through the Pronaf plan 3 20,7% was the expansion in the volume of loans granted by Banco do Brasil through the Pronaf 3 Of all the Family Farmers in Brazil 15% 10% 8% are in Bahia are in Minas Gerais are in Rio Grande do Sul Sustainability Report

40 Suppliers PROMOTING DIGNIFIED WORKING CONDITIONS The contracts signed by Walmart s commercial partners include clauses on: Working conditions (observing labor law, social security law, among others; and banning the use of forced, slave-like or child labor) Safe working conditions Respect for the environmental laws Respect for business sustainability agreements Operating within the legal, ethical and moral limits and terms of the Walmart Statement of Ethics Suppliers subject to inspections and audits CONTRACTS AND AUDITS GRI SO4 Another way of promoting governance is through contracts in which Walmart establishes that the labor and environmental laws will be complied with and technical visits carried out to make inspections and audits. The company also maintains its Ethical Sourcing Program which is applied on a global scale. It refers particularly to contracts covering direct imports which do not go through the Global Merchandise Centers (GMC) or Direct Sourcing Group (DSG) parts of the company s global infrastructure. The measure involves around 500 plants in Brazil and includes, in addition to the direct imports, private-label and exclusive brands as well as non-brands that undergo human rights audits. The company has also signed up to the Programa de Qualificação de Fornecedores (Retail Supplier Qualification Program) of the Associação Brasileira do Varejo Têxtil (ABV- TEX). In 2012, it began the Supply Chain Capacity Building training program for suppliers to enhance their ethical standards. Walmart did not identify any significant risk of child, forced or slave-like labor practices in its operations or those of its suppliers in This conclusion was reached based on its control strategies and the guidelines of the International Labor Organization (ILO) and Universal Declaration of Human Rights. GRI HR2 HR6 HR7 Suppliers must also conduct their businesses ethically and always abide by Walmart s Statement of Ethics. This includes observing, amongst others factors, Walmart s rules governing gifts and gratuities and conflicts of interest. The Ethics and Compliance Department receives complaints from employees, service providers and suppliers and ensures their anonymity. The cases reported are analyzed and have a predetermined deadline for their resolution. The Open Doors Policy within the company encourages communication between the teams and their leaders and the communication of violations. The ethics channels include the telephone number , etica@wal-mart.com address and corporate site ( GRI 4.6 SO2 SO4 40

41 PROVIDING FOOD THAT IS HEALTHY AND SAFE GRI PR1 Another important instrument in measuring the value chain and identifying points for improvement is the analysis of the life cycle of products. Walmart carries out assessments to investigate possible impacts on the health and safety of customers from perishable foods and merchandise. STAGES IN WHICH THE HEALTH AND SAFETY IN THE USE OF PRODUCTS IS EVALUATED Research and development Fabrication and production Marketing and promotion Storage, distribution and supply Use and service Disposal, reuse or recycling This includes observing aspects such as maintaining the right temperature in the production, cooking and cooling processes, controlling cross contamination, employees hygiene and health, cleaning the workplace and ensuring correct labeling. The stores have Expiry Brigades made up of employees from different areas who are responsible for inspecting and disposing of products about to pass their expiry date or which have been damaged. Those responsible are told to check the date before putting the products on display and remove those which are about to expire or damaged. The stores undergo an external monthly audit of all critical points and corrective measures are taken if any deviations are found in standards or conduct. In relation to its private-label brands, Walmart began an intermediary stage of an audit based on the Global Food Safety Initiative (GFSI). This includes Hazard Analysis and Critical Control Points (HACCP), an additional food safety measure. All products were audited and 70% were approved at a higher level than in A total of 99 cases of non-conformity with the regulations and standards were registered among private-label brand and other suppliers during the year. Of these, 26 resulted in a penalty or fine. There were no cases of nonconformity with voluntary codes. GRI PR2 Sustainability Report

42 CUSTOMER ATTENDANCE CHANNELS Telephone Site 42

43 Society GRI 4.16 Walmart aims to ensure its customers satisfaction, promote women s empowerment and help the communities where it is present to grow Engagement with customers, communities and society as a whole is the final link in the value chain of which Walmart forms a part. This strategy comes into practice, for example, with the incentive to promote conscientious consumption and the proper disposal of waste and packaging (see more on page 26). It also occurs through the offer of products developed from best practices to ensure safety and low prices for consumers. Walmart operates on this front as a provider of information and publicizes concepts to alter the habits of customers and employees. The Sustentabilidade Aplicada aos Negócios: Orientações para o gestor (Sustainability Applied to Business: Manager s Guidelines), created in partnership with the Fundação Getulio Vargas business school, is an example of how this strategy can be consolidated. The course lasts 10 hours and is available free of charge on an on-line platform. It aims to give company managers a better understanding of the challenges and business opportunities sustainability can bring, presenting changes in the strategy and operations that make a competitive difference. The course was launched in October Over 11,000 managers have already completed it and become multiplying agents of good practices and sustainable habits. They have joined 160,000 other people who completed the two previous versions of the course, with differentiated focuses. CUSTOMERS The Everyday Low Prices business philosophy completed a year in Brazil in January 2012 with impressive results. The level of services and structure of the logistics chain grew. The quality of perishable goods also improved, as did lines at the checkout which declined. These benefits won Walmart the Prêmio Consumidor Moderno (Modern Customer Prize) as the company that most respects the customer in the Hypermarkets category. Contributory factors to this were the Baixou (Price Cut) initiative in which prices of products in all categories were reduced for at least 60 days and Imperdível (Essential) leaflets showing prices that were even cheaper for the week. This latter offer was unusual as it offered a discount on perishable and commodity items over a week and not just on specific days. Sustainability Report

44 Society Strengthening this philosophy is also carried out through independent surveys carried out in different Brazilian states. The latest survey by the Instituto Datafolha, held between February 28 and March 3 in 37 stores in 12 state capitals, showed that Walmart had the lowest price in 94% of the outlets checked. Another outstanding initiative in 2012, that reinforces the company s commitment to the customer, was the De Olho na Validade, (An Eye on the Expiry Date) campaign partly launched in It was carried out in partnership with the Brazilian consumer defense agencies (Procons) and the state prosecution services and encouraged consumers to check the expiry date of products and improve the supermarket monitoring and control processes. The campaign covered the States of São Paulo, Minas Gerais, Rio de Janeiro, Espírito Santo, Goiás, Rio Grande do Sul, Santa Catarina, Sergipe, Rio Grande do Norte, Pernambuco and Paraíba. GRI SO5 A survey is held every two years on customer service at special periods for the retail sector, such as Christmas, Easter, Mother s Day and Children s Day. The aim is to raise critical issues and prepare solutions to ensure the same quality of attendance the whole year round and directing the marketing plan and selling activities. At the same time, Walmart s senior management took part in ethnographic surveys which gave them a real immersion into the customer s home, life and routine. ATTENDANCE CHANNELS GRI PR5 Consumers are the final link in the value chain of any product and service. For this reason, one of Walmart s priorities is to serve them in a cordial manner and assess their satisfaction with the items they bought and services provided. Among the communication channels available to customers are , the company s website, phone attendance and through social networks. The contacts are concentrated in the Customer Relationship Center (CRC), which was accessed by 760,000 customers in The information obtained helps improve the company s work. The CRC is dealt with specifically through the Customer s Voice program at strategic weekly leadership meetings when the main points related to satisfaction and opportunities for improvement are raised. In 2012, 83% of the calls were attended within 20 seconds and 95% of the requests were attended within 5 days. Over 10,000 customers are consulted in the stores every month by a specialist company on key aspects such as a friendly and efficient attendance, clean restrooms, availability of products they want to find, and checkout speed, amongst others. Walmart improved the internal information report from these surveys in Walmart also strengthened its special attendance operations center to handle and accompany consumer complaints in the consumer defense agencies known as Procons. This initiative included holding technical visits for consumer defense bodies to show how the company tries to find an immediate solution to complaints in the stores and also highlights Walmart s concern to enhance its processes so that the customer has a good purchasing experience. KEY INDICATORS OF THE CUSTOMER ATTENDANCE CENTER CONTACTS RECEIVED 760, , PERSONAL ATTENDANCE 365, , TELEPHONE (0800) 330, , , , SOCIAL NETWORKS 3, , OTHERS 9, , URA (ELECTRONIC ATTENDANCE) 394, ,

45 In 2012, Walmart achieved a reduction of 25% over 2011 in the total number of customer complaints at the Procons and increased its solution ratio by 10% in the preliminary notifications. The team that is dedicated to attend the Procons also works with demands from the National Consumer Defense System. Customer Service Program! The Atendimento UAU! (Customer Service Program!) promotes better conduct by employees and leadership in the stores to foster a good relationship with the customer in a relaxed, differentiated way. The training uses leadership modules to promote assertive and attentive communication using good customer attendance. The employee module aims to increase the pride and sense of belonging to the organization, the pleasure of serving and doing so well and aligning the behavior of the employees to the Walmart culture. As a result, the program reduced complaints related to employee attitudes by 16%. There was also a reduction of 20% in the number of overall complaints. MÊS DA TERRA (EARTH MONTH) One of the Walmart s initiatives to publicize more sustainable products on the shelves and conscientious consumption among consumers is the Earth Month event which occurred in June During this annual campaign, a group of items have their differentiated features highlighted in the stores and their prices reduced. Products can be organic, concentrated, presented in smaller packaging, containing more sustainable raw materials made without phosphate, bring savings in water and energy efficiency, emit fewer greenhouse gases and/or create less waste in its productive process. This initiative is reinforced by products that are part of the End-to-End Sustainability program (see more on this initiative in page 31). RECOGNITION GRI 2.10 Prêmio Exame Atendimento ao Cliente 25 BEST Prêmio da Consumidor Moderno EXCELLENCY IN SERVICE TO OUR CUSTOMER SUPER-HIPER Prêmio da Consumidor Moderno BEST EXPERIENCE IN SOCIAL NETWORKS Prêmio Reclame Aqui SUPERMARKET Prêmio Reclame Aqui WAREHOUSE MEMBERSHIP CLUB Sustainability Report

46 INTERVIEW CONSCIENTIOUS CONSUMPTION 21 ST CENTURY CUSTOMER CONSCIENTIOUS CONSUMPTION IS AN ESSENTIAL WAY OF ENSURING SOCIAL AND ENVIRONMENTAL SUSTAINABILITY By 2020, four planets will be needed to supply the consumer needs at the rate in which the population is using up natural resources within the current production and consumption models. This claim comes from Helio Mattar the president of the Instituto Akatu, a non-governmental organization that aims to organize the way the society consumes. WHAT IS CONSCIENTIOUS CONSUMPTION AND HOW DID THIS CONCEPT COME ABOUT? Helio Mattar It is when the consumer tries to reduce the negative impacts and increase the positive effects of consumption on society or the environment. It assumes the consumer has the information to make the choices and knows about the impacts of consumption habits. Buying a product that lasts longer instead of one that is thrown away after use is a choice that will have less impact on the environment. WHAT OTHER ATTITUDES DOES THE CONSCIENTIOUS CONSUMERS HAVE? The conscientious consumer aims to buy something that he or she really needs. Nobody else can decide on his or her behalf. The second rule is to reduce waste. You can reuse, repair, upgrade as with a computer and mend items that can have their life extended such as clothes. Recycling products and their materials should be the last stage when there is no other way. These are the main rules. ARE THERE OTHERS? Choosing something that is made locally is better because it requires less transport and fuel. Also, things that can be shared and do not need to belong to one person or be for individual use. HOW CAN YOU EDUCATE THE POPULATION TO BE MORE CONSCIENTIOUS AND FOLLOW SUSTAINABILITY PRINCIPLES? There are three factors: understanding, motivation and choice. The first step is for consumers to understand there is a problem and help resolve it. The second is to motivate consumers to behave when they know their action can make a real contribution to resolving the problem. The third is making a choice. For example, people who have lived abroad may consider installing a communal laundry in the building as an immediate solution but people who live in Brazil and are unfamiliar with this habit do not often think of this as a solution. Therefore, these people need to have a broader view and think about the impact. IS ONE OF THE ADVANTAGES OF CONSCIENTIOUS CONSUMPTION THAT IT WILL MAKE SAVINGS IN FAMILY BUDGETS? Thirty percent of perishable products bought are thrown away on average in the Brazilian home. Akatu carried out a test which showed that if a Brazilian family with a monthly income of R$2,000 wastes 10% of what it buys instead of 30% it could put the 20% in a savings account. Over a period of 70 years, this family would have accumulated R$820,000 just by reducing waste. 46

47 Companies that do not produce for the conscientious customer will not survive Helio Mattar WHAT ARE THE POSITIVE IMPACTS OF CONSCIENTIOUS CONSUMPTION ON THE ENVIRONMENT AND SOCIETY? The environmental impact is the easiest to be seen. All products are made from natural resources, from the processing and transport of the parts until it becomes a product. There are impacts on nature in each phase of the production cycle which are generally negative. However, they can be reduced depending on the care taken. One of the most important social impacts is job creation. The question is: what kind of job is created? Does it involve child and/or slave labor? Are workers being treated within their rights? The customer should know the company to ensure that there these items have no negative social impacts. COULD CONSCIENTIOUS CONSUMPTION MAKE COMPANIES MORE SUSTAINABLE? There are a number of ways in which conscientious consumption makes businesses more sustainable. Currently, sixteen percent of the world population, around 1.1 billion people, is responsible for 78% of total consumption. Even with this concentration, we are still consuming 50% more renewable sources than the earth can regenerate. In 20 years, we will have 3 billion more people on the mass consumer market. This will almost quadruple the current number of consumers. How do you avoid environmental chaos? The alternative includes conscientious consumption, technological changes that are under way and public policies that will level the playing field. This is the only way we will succeed in surviving on a single planet that has to serve the population that will live in it. WHAT HAPPENS TO COMPANIES THAT DO NOT TAKE NOTICE OF THIS NEW SITUATION? Companies that are not producing for the conscientious consumer will not survive. People think that this will only happen in 20 years time, but it is not true. We are currently unsure about the supply of water for 2 billion people. A plain in China that supplies 400 million Chinese with grains is expected to have run out of water by So where will the grains for 400 million people come from? This will increase the price sharply. There will be no solution if sustainable business is not combined with conscientious consumption. DOES CONSCIENTIOUS CONSUMPTION NOT ONLY INVOLVE THE QUANTITY OF THE PRODUCTS BUT ALSO THE WASTE GENERATED. HOW CAN YOU BE CONSCIENTIOUS ABOUT WASTE? The recycling and collection of recyclable products is improving. Brazil s solid waste law states that no waste that can be recycled will go to landfills by the second half of Fifty-eight percent of Brazil s waste is organic and can be recycled to create energy and fertilizers. Therefore, companies will have to emerge to make compost or create electrical energy, as well cooperatives and governments that carry out the collection of the other recyclable materials. Sustainability Report

48 SOCIETY SECTOR ENGAMENT GRI 4.13 Walmart Brasil participates in trade bodies and associations to strengthen the sector and exchange good practices. By involving itself in forums, commissions, committees and meetings, the company promotes the sharing of knowledge and discusses scenarios and challenges throughout the chain. Walmart is currently a member of the following associations and is represented at national and regional level. As a result, it is making an active contribution to policies in various areas and meeting local demands while encouraging Brazil s growth. BODIES OF WHICH WALMART BRASIL IS A MEMBER Associação Baiana de Supermercados (Abase) Associação Brasileira de Atacadistas e Distribuidores (Abad) Associação Brasileira de Embalagens (Abre) Associação Brasileira de Relações Empresa Cliente (Abrarec) Associação Brasileira de Redes de Farmácias e Drogarias (Abrafarma) Associação Brasileira de Supermercados (Abras) Associação Brasileira do Varejo Têxtil (ABVTEX) Associação Capixaba de Supermercados (Acaps) Associação Catarinense de Supermercados (Acats) Associação Cearense de Supermercados (Acesu) Associação Comercial da Bahia (ACB) Associação Comercial de Pernambuco (ACP) Associação Brasileira de Comunicação Empresarial (Aberje) Associação de Supermercados da Paraíba (AS-PB) Associação de Supermercados de Alagoas (Asa) Associação de Supermercados de Brasília (Asbra) Associação de Supermercados do Rio Grande do Norte (Assurn) Associação dos Supermercados do Rio de Janeiro (Asserj) Associação Gaúcha de Supermercados (Agas) Associação Goiana de Supermercados (Agos) Associação Maranhense de Supermercados (Amasp) Associação Mineira de Supermercados (Amis) Associação Paranaense de Supermercados (Apras) Associação Paulista de Supermercados (Apas) Associação Pernambucana de Supermercados (Apes) Associação Sergipana de Supermercados (Ases) Associação Sul Matogrossense de Supermercados (Amas) Câmara Americana de Comércio (AMCHAM) Câmara Brasileira do Comércio Eletrônico (Câmara-E.net) Federação das Associações Comerciais e de Serviços do Rio Grande do Sul (Federasul) Instituto Desenvolvimento do Varejo (IDV) 48

49 WOMEN s EMPOWERment Valuing the women is a primary aspect hiring women construction workers for new of the company s global strategy. Studies stores since 2011 and giving them better show that companies with a large number of women in leading positions (gender were hired for the construction of Sam s working opportunities. Over 100 women equality) have better financial results. At the Club in São Bernardo do Campo (SP), Big in same time, most of the company s customers are women, as 80% of the buying deci- and Walmart in Volta Redonda (RJ). Bagé (RS), Maxxi in Presidente Prudente (SP) sions are in their hands. However, when it comes to working, a large part of the female public is still not part of the formal job sue is the Corporate Movement for the Eco- Another operating front to tackle this is- market. As Walmart believes that successful companies in the future will be those the Women 360 Movement that has around nomic Development of Women known as that attract and retain this female labor, it 40 signatory companies. The initiative was announced in 2011 its Global Women s Economic Empowerment Initiative. the Secretariat of Women s Policies of the created by Walmart and has the support of Presidency of the Republic. It involves companies which are highly influential in their The initiative establishes clear goals on different work fronts, such as empowering operating sectors and has the support of women in the field and plants and increasing gender diversity among its main supplier. stitutions. The movement is structured on voluntary organizations and academic in- four operating bases (see the following table) Each country sets its own programs and and is aligned to the Women s Empowerment Principles of the UN Women body. The actions to meet the initiative s targets and commitments. In Brazil, Walmart has been program completed its first year in 2012 and the anniversary was commemorated in December with an event highlighting its achievements. Initiatives promoted during the year were presented at the event represented and can be found on the following site The movement was also recognized in the Women s Empowerment Corporate Leadership Awards presented by the British magazine The New Economy, along with other Walmart initiatives related to the economic development of women. GRI 2.10 Walmart is also a member of the Network of Leading Brazilian Women for Sustainability launched in 2011 by the Ministry of the Environment. This network brings together the leaders of public and private companies, government and non-government organizations and multilateral bodies to discuss and propose actions related to the incorporation of sustainability in business, encouraging green entrepreneurship and changes in standards of consumption and production. PILLARS OF THE WOMEN 360 MOVEMENT DEVELOPMENT OF WOMEN WITHIN COMPANIES DEVELOPMENT OF WOMEN WITHIN THE VALUE CHAIN SOCIAL INCLUSION OF WOMEN VALUING THE IMAGE OF THE WOMEN IN SOCIETY Sustainability Report

50 ARTICLE WOMEN SUSTAINABILITY, ECONOMIC EMPOWERMENT AND GENDER EQUALITY Rebecca Reichmann Tavares* Sustainable development is nothing more than fighting poverty, reducing inequality and pledging that countries should grow in an inclusive and sustainable way in terms of their production and the consumption of their citizens. This is an enormous collective task that is the responsibility of governments, international institutions, voluntary organizations, the media, business groups, women, men, young people and adults. Women continue to be discriminated against and suffer violence throughout the world. They are marginalized in decision making and their participation in the public, political, social and cultural life of their countries is very low. If we look at the Latin American region alone, including Brazil, we see that great progresses have been made in terms of gender equality in recent years, but there are still gaps in two fundamental areas: the political participation of women and their economic empowerment. 50

51 Empowering women and promoting gender equality in all social and economic activities strengthens economies, boosts business, improves the quality of life of women, men and children and also benefits sustainable development. However, there are many obstacles in the way to equality. Brazil is still marked by a big wage difference, with men gaining an average of 25% more than women, according to figures from the IBGE issued in May Women are now a majority of the Brazilian population and provide the highest number of university students. They are also the majority of those who complete the courses. Despite this, the 2012 World Bank Gender Equality and Development report shows that women and men continue to choose very different areas of study in technical and higher education. The split is similar in rich and poor countries. This inequality is seen on an even greater scale in the private sector. For example, women represent only 3% of the CEOs of the world s largest companies, according to Fortune magazine. Inequality in Latin America and Brazil is based on territorial, racial and ethnic factors. Indigenous women, those of African descent and those who work in rural areas are particularly disadvantaged by the lack of social protection, the unstable infrastructure and the degradation of the environment. All this indicates that, despite the big increase in women at university, on the job market and in senior positions in companies, many barriers still need to be dismantled in the market, institutions and home to change this situation. The UN Women and the Global Pact created the Women Empowerment Principles (WEPs) in recognition of the role companies play in expanding economies and human development. The Principles are a combination of policy recommendations for the business community to incorporate values and practices that promote gender equality and women s empowerment. Fifty-five companies in Brazil have become signatories to the Principles, a number that has more than doubled from the end of 2011 to date. The seven Women s Empowerment Principles deal with promoting gender equality through initiatives that help the private sector to concentrate on key elements which are essential for advancing equality in the work place, the market and community. We would like to invite companies that are still not signatories to learn about the WEPs and join us in the future. The full participation of women in economic life makes economies stronger and creates fairer and more stable societies. Hundreds of companies have incorporated the gender dimension into their organizational policies as one of the pillars of their social responsibility and commitment to the economic development of their countries. As a result, they are starting to take advantage of the diversity of talents. This will make a positive difference in relations at work, productivity and business expansion, develop new and better products to meet the needs of customers and create more varied strategies for new markets. The UN Women initiative is working for gender equality and the empowerment of women in all areas to achieve economic growth, a fairer society and a sustainable planet. Women represent virtually half of the world s population. They run the households, raise children and work. Their full participation and respect for their rights and the integration in the lives of their countries and communities could give sustainable development a new boost. Economic independency for women and their empowerment will inevitably lead to a sustainable future and growth. Studies show that closing the gap between the male and female employment rates would increase GDP by 9% in the United States, 13% in the Euro Zone and 16% in Japan. * Representative of UN Women. She has dedicated more than 20 years to issues of social justice, racial equality and the defense of human rights for women. Sustainability Report

52 society WALMART INSTITUTE GRI EC8 EC9 SO1 The Walmart Institute has been operating for seven years and is responsible for the strategic guidance of Walmart s private social investments in Brazil. It currently develops programs and supports projects in partnership with social organizations on three fronts in the regions where is present, using the potential of the retail sector to coordinate local transforming actions. The Institute operates in the Youth and Work, Local Development and Income Generation areas. It plans and carries out a series of programs and projects on these fronts to contribute to the debate on the issues at local, regional and national level. At the same time, it gives supports to Walmart stores throughout Brazil in carrying out actions that benefit the community. The year 2012 was marked by the consolidation of initiatives and sharing experiences. It was also a milestone year as it registered a great conquest: the start of the international expansion of the Social School of Retail. The technology, developed in partnership with the Instituto Aliança, was recognized for its excellent and translated into three languages Spanish, English and Chinese. The idea is to make it available in Asia, Africa and Latin America and share its differentiated way of preparing young people for the modern world of work based on the development of life projects. The program also aims to publicize differentials in retail careers, an area which employs million of people throughout the world. THE SOCIAL SCHOOL OF RETAIL HAS BENEFITTED MORE THAN 4,000 YOUNG PEOPLE SINCE 2010 in brazil 52

53 YOUNG PEOPLE AND WORK The Walmart Institute has been active in the issue of Young People and Work to help overcome the challenge of inserting young people into the work market, aligned with public policies. The Social School of Retail program directs its actions at young people aged between 17 and 29. It trains them to enter the world of work and focuses on the retail segment. The program was carried out in six states in 2012: São Paulo, Paraná, Rio Grande do Sul, Bahia, Ceará and Pernambuco. More than 1,400 new professionals were trained last year alone and are being inserted into the formal job market. Over 4,000 young people have benefited from the initiative since it was created and an average of around 80% of them have found their first job. The program was carried out in partnership with the Education Secretariats in four of the six states that received it last year. This effort aligned with the local public authorities shows how the model is in step with the government challenges to insert professional instruction into the periods before or after the teaching hours in the third year at high school. The Walmart Institute proposal is to include preparatory elements for the young person s working life in the formal education curriculum. The innovation of the model lies in the reflection and construction of the professional identity of the individual, highlighting the retail sector as a career possibility. Good results, combined with the differentials of the methodology and its capacity of scale, led the Walmart Foundation in the United States to invest in taking the program international. For the first time, a social technology developed by the Walmart Institute will be transferred to countries in Latin America, Africa and Asia in partnership with the International Youth Foundation (IYF). Sustainability Report

54 ARTICLE YOUNG PEOPLE BECOMING PROFESSIONALS THE YOUTH UNEMPLOYMENT CRISIS: IT WILL TAKE ALL OF US TO SOLVE IT William S. Reese* The Latin American region, like every part of the world, today faces historic opportunities, as well as some real challenges, as countries seek to grow their economies and improve the employment prospects of their citizens especially the youth. One challenge is that far too many young people can t find work, support their families, or feel positively about their futures. Another is that many companies have jobs to offer but can t find the skilled workers to fill them. Fixing this skills mismatch by ensuring job training programs meet the true needs of local employers is a key element in addressing the broader job crisis. The sheer scope of the problem and the urgency to act is beginning to change the way all of us think about and approach these employment issues. Today, an unprecedented number of government and business leaders have joined forces to find real and practical solutions to bridge this opportunity divide. There is also a growing recognition that young people are enormous assets to society who can drive social and economic progress in their countries, if given the chance. This positive youth development approach is at the core of our work at the International Youth Foundation (IYF). In nearly 70 countries, we collaborate with public, private, and civil society stakeholders to provide young people with the skills and opportunities they need to be successful workers and citizens. With 1.2 billion young people worldwide poised to enter the workforce today, our mission is an urgent one to design effective, tested programs and take them to scale so we can reach more youth and have a sustainable impact on their lives and communities. The IYF initiative that first put these principles into practice was Entra21, launched 14 years ago to prepare disadvantaged young people across Latin America to enter and be successful in the 21 st century job market. How? By equipping them with the employability and life skills 54

55 tiative that aims to prepare one million youth in Latin American for livelihoods over the next ten years. Standing with me at the announcement in Cartagena, Colombia, were top executives from Walmart, along with other major employers in the region: Arcos Dorados-McDonald s, Caterpillar, CEMEX, and Microsoft. We have high expectations for NEO s success, and hope it inspires similar large-scale youth employment efforts in other regions of the world. they need to be productive. We recruited many partners in this effort including the Inter-American Development Bank s Multilateral Investment Fund (MIF), along with global and local companies, government ministries, educational and training institutions, and local civil society organizations. Together, we developed a comprehensive program that offers life and employability skills development, mentorship and internship opportunities, and job placement assistance. One critical element in our collective success was to ensure that our skills training met and matched the employment needs of the local business community. And we saw real results. From 2001 to 2011, 137,000 young people received job and life skills training in 22 countries. Nearly half of them were employed as a result, and more than a quarter went back to school. With an initial investment from the MIF of US$20 million, we raised US$69 million in additional resources to support and expand our job training programs. Successful multi-sector programs like Entra21 have laid the foundation for even more ambitious efforts. Last year, for example, and again with the support of the Inter-American Development Bank, we launched New Employment Opportunities for Youth (NEO) ini- Today, increasingly, we live in a service-based world with the retail sector playing a huge role in opening up the doors of economic opportunity for young people to get entry-level jobs and begin a real career. Working with the leaders of these growing sectors and scaling up effective training programs that meet their workforce needs is critical for our collective future. I m convinced that together with corporate partners like Walmart and many others who see themselves as part of the solution we can rebuild the global economy, invest in human capital and create a more stable and peaceful world. But only if our young people have the skills and support to help drive that vision. And only when more business and government leaders respond to our call to action and join this effort. * President and CEO of the International Youth Foundation and member of the board of the Worldwide Responsible Assembly Production (WRAP) and of the International Council of Toy s Industries (ICTI) Care Foundation. Sustainability Report

56 Society LOCAL DEVELOPMENT The Walmart Institute operates on the Local Development front as a motivator of social transformation in specific areas. It is present in the State of Amapá through its Support for the National Forest Implementation Program (Flona) and in Recife State through its citizenship program Bombando Cidadania, which helps local people achieve common aims. The proposal is focused on medium and long-term results and aims to integrate sustainability, viability, economic efficiency, strengthen citizens participation, improve the quality of life and reduce social inequalities in a great community effort. With the Flona, which is carried out in partnership with the Conservação Internacional (International Conservation IC) and the Instituto Chico Mendes ICMBio (Chico Mendes Institute), the organization aims to make the Amapa forest a model of land management and the sustainable use of natural resources. To do so, a series of community actions, education initiatives and workshops were held with the local community to raise income. The Local Development platform in the Bomba do Hemetério district in the north of Recife showed its ability to mobilize. In 2012, the Institute completed 4 years in that neighborhood, coordinating community, cultural (see picture below), educational, income generation, environmental conservation and health promotion initiatives involving more than 1,500 people. The result was hailed by the residents of the district. An interim assessment of the program showed that 94% of those directly involved with the actions believed that the Bombando Cidadania project had brought real changes to the community (see the qualitative results alongside). It is now recognized nationally as a laboratory for local development initiatives and won new partnerships last year with the public authorities, private sector and voluntary bodies. The district s residents now play the main role in the areas of culture, tourism, environment, health and work, amongst others. QUALITATIVE RESULTS OF THE BOMBANDO CIDADANIA Recognition of the district as a national benchmark in community-based tourism in Brazil through the development of a creative economy. Increased the entrepreneurial ability of the local groups. Expanded the view of solidarity, ability to cooperate and participation in the development of the district by those involved in the program. Generation of new working and study opportunities for the residents. 56

57 GENERATING INCOME In 2012, the Walmart Institute developed its own understanding of social investment through the Generating Income cause. The activity involved supplying and supporting inclusive social businesses, particularly in recycling and the economic development of women. The Institute regards inclusive social businesses as initiatives led by entrepreneurs who simultaneously create a social impact and achieve financial sustainability, i.e. founded on economic viability while fostering social gains. As part of the Income Generation and Productive Groups activities, an important debate was held on the National Solid Waste Policy (PNRS) in The approval of the new policy by congress put the cooperatives of street garbage collectors on another level, favoring the economic strengthening of these groups in a sustainable way. To help debate the issue, the Walmart Institute promoted the PNRS Forum (picture above) which brought together different agents from all areas of society to discuss the demands and how the sector will be transformed. The event brought together street collectors, representatives of social organizations and public authorities, companies and specialists. It also presented a practical example in the successful work carried out by three groups of cooperatives Cooperativa Caec (Salvador BA), Cooperativa Futura (São José dos Campos SP) and Rede de Cooperativas Cata Vida (Sorocaba SP). This was also an opportunity to share challenges and lessons learned. The main highlight of the Economic Development of Women Incentive in 2012 was the investment in the Mais Social (More Social) organization in Salvador, Bahia. A total of 470 women were trained in cookery and sewing activities. COMMUNITY ACTIONS The Walmart Institute, in partnership with more than 550 stores throughout Brazil, uses its distribution channel and organization power in the retail sector to promote social actions that benefit the community. These initiatives encourage a culture of solidarity between employees, customers, suppliers and all the companies in the company s value chain. A practical example of this is combating waste through the Programa de Doação a Bancos de Alimentos (Food Bank Donation Program). In 2012, around 2,000 tons of food was donated to partners such as Programa Mesa Brasil (Brazil Table Program) linked to the Serviço Social do Comércio (Sesc) social service and the Banco de Alimentos de Porto Alegre (Food Bank), linked to the Industrial Federation of Rio Grande do Sul State (FIERGS). The aim is to direct products that cannot be sold but are still fit for consumption to organizations that take the food to children and adults in situations of food insecurity. More than 8,500 employees from 380 Walmart Brazil units also acted as volunteers in the sixth Community Day in 2012 (see picture on page 52). This is an annual event in which Walmart brings its employees together to carry out voluntary activities in social organizations close to the stores and offices. The Institute also developed the Boas Ações (Good Deeds) program in combination with the store chain. This program allows employees to take part in community activities in their neighborhoods, benefiting the population and establishing partnership relations with activities that will bring long-term benefits. The Calendário Nacional de Boas Ações (National Calendar of Good Deeds) has become an annual event and part of the daily lives of employees and customers. The calendar allows all the stores in Brazil to carry out good deeds in a similar way, with activities in 18 states and the Federal District. Among the initiatives worth highlighting are campaigns to collect food, clothes, toys and books which are donated to social organizations and raising awareness about health for the whole community in partnership with public authorities, as well as initiatives by volunteers in social institutes. Sustainability Report

58 58 GRI Letter