One ESG issue important to Walmart customers is animal welfare in the food supply. As the Associated Press reported: “Wal-Mart said its own research showed 77% of its shoppers said they will increase their trust and 66% will increase their likelihood to shop at a retailer that improves the treatment of livestock.”
What does WMT tell shareholders and customers it’s doing about this issue?
WMT says it expects its suppliers won’t tolerate abuse “of any kind” and that it supports a principle called “The Five Freedoms” of animal welfare as an aspiration for its supply chain. WMT even claims it works with suppliers “to implement practices consistent” with the Five Freedoms.
What exactly are those Five Freedoms?
1.Freedom from hunger and thirst.
2.Freedom from discomfort by providing an appropriate environment including a comfortable resting area.
3.Freedom from pain, injury or disease.
4.Freedom to “express normal behavior” by providing sufficient space.
5.Freedom from fear and distress by “ensuring conditions and treatment which avoid mental suffering.”
So, just how aligned is WMT’s supply chain with the Five Freedoms?
Unfortunately, many practices that WMT allows in its supply chain are *grossly* out of step with the Five Freedoms. Just one example (of many) is the solitary confinement of pigs in gestation crates. These cramped cages detain pigs so restrictively they can’t even turn their own bodies around. Pigs in gestation crates aren’t afforded *most* of the Five Freedoms: they live in constant discomfort, without any comfortable rest area, unable to express normal behaviors, and endure chronic mental suffering.
Is WMT fixing this disparity?
WMT has claimed for years that it’s been “asking” its U.S. fresh and frozen meat and deli suppliers to “find and implement solutions to” gestation crates. And it has provided limited transparency about the range of practices in its supply chain that are misaligned with the Five Freedoms, how (if at all) it is addressing those misalignments, and what (if anything) has changed as a result of its efforts.
Finally, why should shareholders care?
WMT’s inaugural ESG report said the company’s “Ethical Standards vision” includes earning “the confidence of our customers that we are taking appropriate steps to achieve our goal of procuring merchandise…produced in an ethical manner.” And considering the importance of animal welfare to WMT’s customers, further transparency regarding how WMT is achieving its stated animal welfare aspirations would help shareholders better evaluate if that vision is being accomplished.