advertisement
advertisement

Sustainability Faceoff: Walmart vs. Target

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?

Walmart vs. Target

advertisement

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.

advertisement
  Walmart   Target  
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  
Management
Practices
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
 
Health

of 20%

  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%
Wealth

of 20%

$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%
Earth

of 20%

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%
Equality

of 20%

Score of 40 on the Human Rights Campaign equality index 14% Score of 100 on the Human Rights Campaign equality index 16%
Trust

of 20%

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%
Human Impact

of 100%

TOTAL 51%
TOTAL 55%
Corporate Profit

of 20%

+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)

 

Read more Sustainability Faceoffs.

HIP Investor

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.

About the author

Ariel Schwartz is a Senior Editor at Co.Exist. She has contributed to SF Weekly, Popular Science, Inhabitat, Greenbiz, NBC Bay Area, GOOD Magazine and more.

More