There can be only one winner in the battle of the big box retailers. In the new book The HIP Investor, author R. Paul Herman compares Walmart and Target in terms of profit, management, and human impact (health, wealth, earth, equality, trust). So which retailer is more sustainable? In our opinion, Walmart is the winner.
It's hard to argue with Walmart's superior profitability, but sustainability is always subjective. We've detailed Walmart's sustainability initiatives extensively on FastCompany.com--the company offers locally grown produce, energy-efficient products, and innovative internal recycling policies, among other things. Walmart's crown jewel, though, is the sustainability consortium it pioneered--a conglomeration of four major retailers (Walmart, Safeway, Best Buy, Ahold), 34 manufacturers, and 9 universities that is developing a green product-labeling standard for products found on all of these retailers' shelves. It's one of the most impressive things we've seen a big box retailer spearhead--ever.
That's not to say Walmart is perfect. The company isn't exactly known for having fair worker's rights policies, and its $10.76 average full-time hourly wage isn't too impressive either. But overall, Walmart has made impressive strides in leveraging its power for good.
Target, on the other hand, has a ways to go. The company has made improvements on the sustainability front, besting Walmart in 3 of the 5 Human Impact categories from HIP Investor. And it was ranked first on Greenpeace's Carting Away the Oceans report for enacting superior seafood policies. The company also recycles 70% of all solid waste materials. But in an interview with Herman, Anthony Heredia, Target's VP of Corporate Risk and Responsibility, admitted that the company hasn't published any business goals around sustainability metrics. "The reason we are perceived about lagging behind other companies is because we have not been explicit about those goals," he said. Without a solid vision for the future, how can Target possibly get ahead?
Target fares better on the human rights front. The company offers full benefits to managers and scaled benefits for hourly workers, and it contributes 5% of annual net income to programs that serve Target communities. All good things, but the company just isn't quite shaking things up as much as we'd like.
Check out the full HIP Investor chart below.
|Overview||2.1 million employees, 8,100 retail units in 15 countries, $405.6 billion in annual revenue||351,000 employees, 1,684 stores in 48 states, $64.9 billion in annual revenue|
|Product||Selling products like affordable organic produce, fair trade coffee, and compact fluorescent light bulbs; has specific goals for increasing HIP products in its stores||In 2006, expanded its Archer Farms brand to include affordable organic food products|
|23 of 25: Comprehensive goals of zero waste, 100% renewable energy and sustainable products. Launched Sustainability Index across 60,000 suppliers. Front-line to Board accountable for increasing positive impact.||16 of 25: Seeks to use resources responsibly, minimize its carbon footprint, develop facilities that align environmental, community, and business needs, and influence its vendors and suppliers to embrace sustainable practices|
|47.4% of Walmart associates get health-care coverage from Walmart; Customer satisfaction: 68% to 70% depending on store category||6%||Target offers full benefits to eligible managers and scaled benefits for hourly workers; customer satisfaction: 77%||7%|
|$10.76 avg. full-time hourly wage in U.S.; Plans, including 401(k) and profit sharing, may be available to employees after 12 months of employment||8%||Dollar-for-dollar match for retirement up to 5% of pay with immediate vesting; Since 1946, contributed 5% of annual net income to programs that serve Target communities||13%|
|In 2008, goal to make fleet 25% more efficient was achieved; retrofitted 500 stores with low and medium temp. refrigerated display cases||11%||70% of solid-waste materials are now redirected from landfills through various conservation programs for reusing and recycling||8%|
|Score of 40 on the Human Rights Campaign equality index||14%||Score of 100 on the Human Rights Campaign equality index||16%|
|Despite $6.6 million lobbying, publishing many quantitative metrics and encouraging cross-sector sustainability index to share quantifiable supplier performance||12%||$2.6 million lobbying (one-third of Walmart’s lobbying spend, while firm is one-sixth of Walmart’s revenue), some quantifiable metrics published.||12%|
|+20.4% return on equity (2009)
-0.1% annualized total return, including reinvested dividends (6/2004-6/2009)
+2.0% annualized total return, including reinvested dividends (6/2006-6/2009)
|+15.3% return on equity (2009)
-0.5% annualized total return, including reinvested dividends (6/2004-6/2009)
-5.7% annualized total return, including reinvested dividends (6/2006-6/2009)
Table excerpted from The HIP Investor: Make Bigger Profits by Building a Better World by R. Paul Herman Copyright (c) Published by John Wiley & Sons. Used with permission.