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2013 Global Responsibility Report

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About this report

The scope and boundaries o the 2013 Walmart Global Responsibility Report encompass

our corporate social, environmental and company responsibility eorts, while also providing

snapshots into each o our individual markets around the globe. The report reviews our

progress and perormance during scal year 2013, refects areas where weve achieved

tremendous positive results and species areas o opportunity we must continue to ocus

on. The reporting timeline covers the period o Feb. 1, 2012 Jan. 31, 2013 and builds on our

last report, issued April 2012. Unless otherwise noted, all currency is in U.S. dollars.

Contents

Company responsibility |70

2 Message rom Mike Duke

6 How Walmart made a dierence in 2012

18 Progress at-a-glance

Social responsibility

22 Ethical sourcing

40 Global audit results

42 Global womenseconomic empowerment

44 Hunger relie

46 Healthier ood

48 Giving

49 Disaster relie

Environmental responsibility

52 Sustainability 360

53 Sustainable Value Networks

54 Renewable energy

56 Greenhouse gas (GHG)

58 Energy eciency and buildings

59 Energy: Fleet

60 Waste

62 Sustainability Index

64 Sustainable agriculture

68 Supply chain GHG

Company responsibility72 Stakeholder engagement

74 Governance

75 Public policy

76 Ethics and integrity

78 Compliance

82 Saety

84 Diversity

87 Talent development

89 Recruiting

90 Benefts and compensation92 Associate engagement

93 My Sustainability Plan

Local responsibility

96 Our company

98 Arica

102 Argentina

106 Brazil

110 Canada

114 Central America

118 Chile

122 China

126 India

130 Japan

134 Mexico

138 United Kingdom142 U.S. Walmart

148 U.S. Sams Club

Our progress

152 2012 commitments and progress

162 Global Reporting Initiatiave index


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Local responsibility | 94

Social responsibility | 20

Environmental responsibility | 50

Walmart 2013 Global Responsibility Report


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2 | Walmart 2013 Global Responsibility Report

2 Executive summary | 20 Social responsibility | 50 Environmental responsibility | 70 Company responsibility | 94 Local responsibility

Message rom Mike Duke

Michael T. Duke, President and Chie Executive Ofcer

Together, we are doing big things. I am proud to share our

2013 Global Responsibility Report with you because o what

we accomplished together this year and Im even more

excited to share where we are going.

We were reminded again this year that Walmart has a

responsibility to lead. We serve the emerging middle class

around the world. Our customers are concerned with kitchen

table issues, like whether they can aord to put healthier

ood on the table whether they can save a little money or

a rainy day whether their kids can get a good education.

Walmart has aresponsibilityto lead


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As we move ahead, you can also expect us

to ocus more on the areas with the biggest

potential to make the biggest dierence. An

example is our pledge to signicantly increase

the amount we source rom women-owned

businesses including $20 billion o

products and services or the U.S. alone. This

is both where Walmart can have the biggest

impact through our purchase orders and

where we can have a huge impact on society.

Women hire other women, mentor other

women and create better communities

around them, while keeping Walmart more

connected to our customers.

We will also continue to strengthen our

leadership on an industry-wide level. Ater

all, what Walmart can do alone is signicant,

but what we can do together is even better.

For example, our pledge to reduce salt,sugars and ats in the ood we sell is driving

changes at our suppliers and across the

ood industry. In October, a grant rom the

Walmart Foundation was given to help

open an ofce o The Sustainability

Consortium in China that will work at scale

on the sustainability o products made

in Asia which, by the way, will help

our competitors too. Were also making

important commitments around renewable

energy that will have ripple eects across

the green power industry.

Continued transparency

We are grateul to the hundreds, even

thousands, o community groups, nonprots,

universities, businesses and NGOs that are

partnering with us on all o these eorts.

Building these relationships will allow us to

make our eorts sustainable and scalable,

and hopeully to set a good example or

others as well.

In these relationships and in this report,

Walmart is committed to being open,

transparent and sincere when we getthings right and also when we get things

wrong. We recognize that some might still

have concerns about our company, and we

try our best to address those concerns in

these pages. I want to spend a moment on

three issues that may be on your mind.

The rst is around our associates. We are

proud o the jobs and opportunities we oer.

Our U.S. turnover rate is lower than theindustry average; our job satisaction scores

are higher than the industry average, and

more than 300,000 associates have worked

with us or more than 10 years. Thats in part

because at Walmart, you can climb the

ladder rom a stocker or a cashier to a

department manager, a store manager and

beyond. Especially in todays economy, that

is a rare and important opportunity.

The second is the terrible tragedy in aBangladesh garment actory last all. Like

you, we were saddened and disturbed by

the senseless loss o lie, and we renewed

our dedication to being part o the solution.

Over the past ew years, we have taken

More than

300,000associates have

worked or

10+years


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Walmart 2013 Global Responsibility Report | 5

strong steps to ensure a more responsible

supply chain through training, ongoing

audits, and high standards or suppliers.

And we have instituted a zero-tolerance

policy: we will terminate our relationship

with any supplier engaged in unauthorized

subcontracting. This is a tough but critical

challenge or us and others and we

recognize that the immense complexity

o the supply chain requires us to partnerwith peers and stakeholders to ind

sustainable solutions.

The nal area is compliance with the Foreign

Corrupt Practices Act. We are committed

to having a strong and eective global

anticorruption program everywhere we

operate and to taking appropriate action or

any instance o noncompliance at any level o

the company. We are taking a number o

specic, concrete actions with respect to our

processes, procedures and people to build a

world-class compliance program in each o

our markets. We are communicating regularly

and clearly that it is our irm expectation

that every Walmart associate will act with

integrity at all times.

A stronger business

Leading on big issues is not easy. But the

rewards are greater than we thoughtpossible when we set out on this journey.

We do have a responsibility to lead, and

weve ound that our responsibility is also

our opportunity.

I hope youll see one o Walmarts core

convictions come to lie in these pages

that whats good or society and good or

business can be one and the same. More

and more, were nding ways to make

them mutually reinorcing.

Whether its oering customers more

relevant products rom women-owned

businesses, or supporting more domesticmanuacturing, or making the oods we sell

healthier, or cutting our costs by running

our truck eet more efciently, we believe

that our work on these issues makes us a

stronger business.

It drives our bottom line even more than

we had expected, but not only that it brings

us closer to our customers. It helps us orm

strong partnerships with governments and

communities in the countries where we

work. And it reinorces our Walmart culture.

Our associates take pride in knowing they

are helping make a dierence in the world.

I thank you or your time and interest in

learning about Walmarts work over the

past year and look orward to hearing your

thoughts on how we can do even better.

Sincerely,

Mike Duke

President and Chie Executive Ofcer

Wal-Mart Stores, Inc.

We arebuilding aworld-classcomplianceprogramto producea more

responsiblesupply chain.


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Thisisadetailedexaminationofourcommitments,progressandchallengesintheareasofsocial,environmentalandcompany

responsibility.Werecommittedtotransparencyandinviteyoutospendtimewithourreport.Butourcustomersconstantlytell

usthattheyrepressedfortime.So,withthatinmind,thisisasamplingofthetopwaysWalmartmadeadierencein2012.

HowWalmartmadeadierencein2012

Giving

Walmart and theWalmart Foundation

surpassed $1 billionin giving worldwide.

Renewable

energyWeve become the

largest on-site green

power generator in

the U.S., according

to the EPA Green

Power Partnership.

Womenseconomicempowerment

Walmart and theWalmart Foundationare increasingtraining andopportunities ornearly 1 millionwomen aroundthe globe.

U.S.manuacturing

Were committed tosourcing an additional$50 billion in productsin the U.S. over thenext 10 years.

SustainabilityIndex

We committed toscaling the Indexand helped to launchThe SustainabilityConsortium in China.

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Veterans

We project hiringmore than 100,000U.S. veterans overthe next ve years.

Healthier ood

Weve savedcustomers more

than $2.3 billionon resh ruitsand vegetablessince 2011.

Jobs andopportunity

About 77 percent o

our store managementteams in WalmartU.S. started ashourly associates.

Hunger relie

Walmart and theWalmart Foundationbecame the rstpartner o FeedingAmerica to donate1 billion meals toght hunger andeed amilies.

Diversity

Nearly 28 percento our corporateofcers are women,compared with theFortune 500 averageo 14.3 percent.

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SaveMoney.LiveBetter.Welivebythesewords.Buttheworkwedotohelp

peoplelivebettergoesbeyondourstorewalls.Supportingorganizationsthat positively impact local communities around the globe is something

weconsiderpartofourmission.WereproudthatinFY2013,Walmartand theWalmartFoundationgavemorethan$1billiontomakeadierence

inthebigissuesthatmattertousall.

Surpassed $1 billion

in giving

U.S. cashmore than

$273million

Internationalcash nearly

$38million

$

$311million

Total cash givingmore than

SomeexamplesofourgivinginFY2013include:

Awardedmorethan85,000grantstosupporttheworkoforganizationsinlocalcommunitiesaroundtheworld.

Morethan73,000low-incomewomeninIndia,Bangladesh,

CentralAmericaandtheU.S.receivedjobskillstraining.

Walmart,SamsClubandLogisticsassociatesvolunteered

morethan2.2millionhours,generating$18millionfor

localU.S.nonprots.

$3.8millionincashandin-kindsupporttothoseimpacted

bydisastersacrosstheU.S.

1

Total in-kind givingmore than

$775 million

U.S. in-kind

more than

$731 million

International in-kind

more than

$44 million


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We committed to scaling our rollout o the Sustainability

Index a tool to measure and drive the sustainability o

products and helped to launch The Sustainability Consortium

(TSC) in China. At an event in Beijing on Oct. 25, 2012, we

announced a series o new commitments to make our

supply chain more sustainable, including:

Bytheendof2017,wellbuy70percentofthegoodswesell

in Walmart U.S. and Sams Club U.S. units only rom supplierswho use the Index to evaluate and share the sustainability o

their products.

Beginningin2013,wellusetheIndextoinuencethe

design o our U.S. private-brand products.

Beginningin2013,keyGlobalSourcingleaderswilljoin

our product buyers in Walmart U.S. and Sams Club who

already have specic sustainability objectives tied to their

annual evaluations.

In a signature step to strengthen our commitment to a

sustainable global supply chain, the Walmart Foundation

also provided a $2 million grant to support the launch o

TSC in China. Through this git, we hope that:

Chineseresearchersandlocalexpertswillengage

together in the development o TSCs measurement and

reporting systems.

TSCwill,throughdirecttrainingandpartnerships,build

capacity or using TSCs tools to improve sustainability.

ChineseretailersandsupplierswillengageinTSCs

global network o sustainability leaders to learn and

share best practices.

Committed to scaling the Indexand launched TSC China2


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Since launching our Global Womens Economic

Empowerment Initiative in 2011, weve worked to leverage

our size and scale to improve womens lives and opportunities.

For Walmart, empowering women isnt just the right thing

to do. Its smart business, helping us better understand

and serve our customers, nd the best talent and promote

economic growth in the communities we serve.

One o many success stories has been the launch o our

training program unded by the Walmart Foundation in

factoriesinIndiaandBangladesh,withnearly17,000women

trained to date. The training curriculum will be made an

open source or others to use, and we will share what weve

learned with stakeholders. Our aim is to strengthen this

initiative by promoting collaboration among stakeholders

and leveraging one anothers knowledge and expertise to

make womens empowerment central to the manuacturing

industry. As such, other retailers, brands and suppliers are

welcome to replicate the program developed by NGO

partners, Walmart and the Walmart Foundation, or to

utilize the curriculum and tools in their own programs.

Like our eorts in sustainability, hunger relie and healthierood, Walmart and the Walmart Foundation are using

philanthropy and our business model to empower women

by increasing training, market access and career opportunities

or nearly 1 million women, ensuring access to the economic

opportunity they deserve.

Increasing training andopportunities or nearly1 million women

For more inormation, visit

www.corporate.walmart.com/women .

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InJanuary2013,wecommittedtousingourbuyingpowertocreatemore

jobs inth eU.S. bysuppor tingmoreAmer icanmanufacturing.Wellsource

anadditional$50billioninproductsintheU.S.overthenext10yearsby

increasingourpurchasesincategoriesthatwealreadybuyhereandhelp

onshoreU.S.productioninhigh-potentialareas.Bytakingthesesteps,

wecanhelpcreatemorejobsandrevitalizeourcommunitiesandthe

U.S.economy,whilecontinuingtooffereverydaylowprices.

Sourcing an additional$50 billion in products in U.S.4


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In2012,wewere:

Conrmedasthelargeston-sitegreenpowergeneratorintheU.S.bythe

EPAGreenPowerPartnership.

RecognizedbytheSolarEnergyIndustriesAssociation(SEIA)ashaving

themostinstalledon-sitesolarcapacityintheU.S.

ReceivedtheRenewableEnergyLeaderoftheDecadeawardfromtheAmericanCouncilonRenewableEnergy(ACORE).

FromtheinstallationofourrstrooftopsolarsystemsinCaliforniain2007

andexpansionintoHawaii,Arizona,PuertoRicoandColorado,toourrst

solarshadedparkingstructuresatadistributioncenterinCasaGrande,Ariz.,

ourcommitmenttorenewableenergyhasbeenvisiblefromthebeginning.

Thepastyearmarkedabigoneonoursolarjourney,asweinstalledsolar

projectsinseveralnewmarkets,includingMassachusetts,Maryland,Ohio

andOregon.InJune2012,wecompletedour100thsolarinstallationinthe

stateofCaliforniaalone.Since2007,wevecompletedmorethan200solar

projectsandhopetocontinuethattrend,contributingsignicantlytoward

ourgoalofbecoming100percentsuppliedbyrenewableenergy.

Recognized as largest on-sitegreen power generator inthe U.S.5


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First partner o Feeding Americato donate 1 billion meals

In2012,WalmartandtheWalmartFoundationbecametherstpartner

ofFeedingAmericatosurpass1billionmealsdonated.Thismilestone

istheresultofsevenyearsworkingalongsideFeedingAmericatoght hungerintheU.S.Thatsenoughtoll31,250semitrailerswithfood,

enoughtrailerstostretchfromWashington,D.C.,toRichmond,Va.

AccordingtothemostrecentdatafromtheU.S.DepartmentofAgriculture,

atsomepointin2011,morethan50millionpeopleintheU.S.struggledwith

hunger.Ofthatnumber,morethan16millionwerechildren.Walmartand

theWalmartFoundationknowthisisabigissueand,astheworldslargest

grocer,wereuniquelypositionedtohelp.Bycollaboratingwithorganizations

suchasFeedingAmericaandShareOurStrength,wereleveragingoursize

andscaletoprovidenutritiousfoodandresourcestomakeadierence.

Onbehalfofthe37millionclientsofFeedingAmericaandour

nationalnetworkoffoodbanks,IdliketothankWalmartanditsassociatesforhelpingusghthungertogetherinourcommu-

nities.The1billionmealsyouvedonatedtoournetworkhave

helpedbringnutritiousfoodtofamiliesacrossthecountry.

Weregratefulforyourpartnershipandlookforwardtoworking

side-by-sidewithyouandyourassociatesaswecontinueto

feedthoseinneed.

BobAiken,presidentandCEO,FeedingAmerica

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BeginningMemorialDay2013,wevecommittedtooeringajobtoany

honorablydischargedU.S.veteranwithinhisorherrst12monthso

activeduty.Noteveryreturningveteranwantstoworkinretail,butevery

veteranwhodoeswillhaveaplacetowork.Weprojecthiringmorethan

100,000U.S.veteransoverthenextveyears.Mostofthesejobswillbe

inourstoresandclubs,andsomewillbeinourdistributioncenters,e-commerceandcorporateocelocations.

Hiring more than100,000 U.S. veteransover 5 years

Our hope is that businesses throughout our

countrywillfollowWalmartsleadandnd

evenmorenewwaystheycancommitto

servingthosewhoserveus.

MichelleObama,rstlady

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USA


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Our commitment to diversity is deeply rooted in more than ve decades o rich history and

culture. We strive to be a great place to work or all people. By embracing the diversity o our

associates, we maximize our talents and deliver innovative solutions to business challenges.

We continue to make strides in establishing a workorce thats reective o our customers.

One such area has been emale representation, compared with Fortune 500 companies and

the retail industry in general, as illustrated below:

(Sources: Fortune 500 http://www.catalyst.org/knowledge/us-women-business-0 ;

Retail http://www.catalyst.org/knowledge/women-us-retail-trade-0 ; Walmart data as o 1/31/13.)

Position Fortune500 Retail Walmart

BoardDirectors 16.6% 18.3% 23.5%

Executive Ofcers 14.3% 17.9% 27.5%

LaborForce 46.9% 48.3% 57.2%

Women at Walmart: How we compare

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Counted nearly 28% o corporate

ofcers as women, nearly doublethe Fortune 500 average


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WalmartU.S.continuestorealizesignicantprogressonitseortsto

makefoodhealthierandhealthierfoodmoreaordable.Overthepast

twoyears,weve:

Savedcustomersmorethan$2.3billiononfreshfruitsandvegetables.

Opened86storesinneighborhoodswithlimitedaccesstonutritiousproduce.

Ourcustomersarealsondingitseasierthanevertoidentifyhealthier

foodoptionswiththerolloutofourGreatForYouicon.Backedbyrigorous

nutritioncriteria,thisfront-of-packageiconisdesignedtohelpcustomers

quicklyndhealthierchoices.Morethan1,300WalmartGreatValueand

Marketsideitems,aswellasfreshandpackagedfruitsandvegetables,

willfeaturetheGreatForYouiconin2013.

Saved customers more than

$2.3 billion on resh ruitsand vegetables since 20119


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About 77 percent o our store

operations management teamsin Walmart U.S. started ashourly associates

Morethanthree-quartersofourstoreoperationsmanagement

teamsinWalmartU.S.startedashourlyassociates,andtheyearn

$50,000to$170,000annually.In2012,wepromotedapproximately

180,000WalmartU.S.andSamsClubassociatestojobswithmore

responsibilityandhigherpay.

Wewanteveryassociatetondthecareeropportunitiestheywant

withWalmart.Wereensuringthatpart-timeassociateshavevisibility

intofull-timejobopeningsintheirstoresandnearbystores,and

thattheyhavetherstopportunityatthosejobs.Werealsobringing

moretransparencytoourschedulingsystemsothatpart-timeworkers

canchoosemorehoursforthemselves.

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Progress at-a-glanceEnvironmental responsibility

Energy

Be supplied by 100 percent renewable energy. As o 2012, Walmart-riven renewable energy projects an purchases provie about 4 percent annually

o our builings electricity nees. The gri supplie another 17 percent, or a total o 21 percent

renewable electricity.

Double eet eciency in the U.S. by October 2015

(2005 Baseline).

Walmart U.S. Logistics has achieve an 80 percent improvement in eet eciency over our 2005 baseline.

Improve equipment, technology an increase system capabilities rove a 10 percent increase in 2012.

Reduce greenhouse gases (GHGs) at our existing

store, club and distribution center base around the

world by 20 percent (2005 Baseline).

At the en o 2011 (the most recent year or which we have complete ata), we ha achieve this goal

(20.02 percent reuction) an anticipate urther progress rom 2012.

Waste

Eliminate landfll waste rom U.S. stores and

Sams Club locations by 2025.

Even as our retail sales an square ootage continue to increase, Walmart U.S. improve to 80.9 percent

reuction in 2012. Sams Club U.S. improve to 77.3 percent reuction in 2012.

Reduce our global plastic shopping bag waste

by an average o 33 percent per store by 2013

(2007 Baseline).

We exceee the target by reucing plastic bag waste across our global operations by 38.1 percent,

or approximately 10 billion bags.

Walmart will reduce ood waste in emerging

market stores and clubs by 15 percent and in ourother markets by 10 percent by the end o 2015

(2009 Baseline).

While consierable attention is being pai to proucing more oo to meet growing population emans, one o

the most immeiate an eective ways to alleviate some o the pressure is to waste less o what we alreayhave. One example o our progress in this area is our ASdA operations aligning with the U.K. governments

Courtaul Commitment to eliminate 2,455 tonnes o oo waste through better orecasting in our resh

epartment an another 1,059 tonnes by reucing back-o-house inventory.

Products

By the end o 2012, well require that 95 percent

o direct import actories receive one o the two

highest ratings in audits or environmental and

social practices.

Since the announcement o this goal in 2008, weve increase the percentage o green an yellow irect import

actories by more than 12 percent an surpasse our goal in 2013 by achieving 96 percent.

In the U.S., Walmart will require all resh and

rozen, armed and wild seaood products sold at

Walmart and Sams Club to become certifed as

sustainable by a third party using Marine

Stewardship Council (MSC), Best Aquaculture

Practices (BAP) or equivalent standards.

97 percent o our arme fsh is BAP certife. The remaining 3 percent are low environmental risk fsheries such

as trout, oysters, clams an mussels, where there are no certifcation stanars available.

Walmart will require sustainably sourced palm oil

in all o our private-brand products globally by the

end o 2015.

20 percent o our global palm oil use supports sustainable growing. This inclues GreenPalm certifcates, Mass

Balance an Segregate. Six o our international markets purchase GreenPalm certifcates to cover all o their

2012 palm usage.


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Womens economic empowerment

Empower women on arms and in actories through

training, market access and career opportunities. By

the end o 2016, in emerging markets, train 500,000

women in the agriculture value chain.

By the en o 2012, we traine approximately 150,000 armers an arm workers, o which about

33,000 were women. We une new projects in Inia, Nigeria an China uring 2012 an will

continue to ientiy an support aitional projects.

Scale our successul retail training programs to help

200,000 women internationally.

In April 2012, we announce an innovative partnership with the Inter-American development Bank (IdB) an major

multinationals to train as many as 1 million youth, hal o which will be women, or their frst job over the next 10 years

in the Western Hemisphere. Well contribute our successul retail training curriculum to the initiative an will work with

the IdB to pilot retail training programs or women throughout the Hemisphere. Through uning rom the Walmart

Founation to the International Youth Founation, the translation o the Brazilian curriculum materials into Spanish,

English an Chinese is complete, an well implement pilot programs in Argentina, Chile an Mexico this spring.

Work with proessional service frms and merchandise

suppliers with more than $1 billion in sales to

increase opportunities or women and minorities

on Walmart and Sams Club accounts.

In the U.S., weve evelope an online atabase to track gener an iversity representation or the Walmart account

among major suppliers. Were eucating suppliers an working through pilot programs to etermine the best

approach to achieve our target results. Internationally, weve communicate the program with local markets an

ientife owners or the program. Well begin the program with global suppliers.

Healthier food

Save customers at least $1 billion a year on healthier

oods, including reduced prices on produce and

parity pricing on healthier oods and beverages.

By the en o FY2013, we achieve $1.2 billion in savings, bringing the total savings or customers to

$2.3 billion over the frst two years o the program.

Open between 275 and 300 new stores in or nearood deserts by 2016. Increase access to resh and

healthier oods or Americans.

By the en o 2012, we opene 86 new Walmart stores in or near oo eserts since July 2011. As a result,more than 264,000 Americans now have better access to healthier oo.

Improve the nutritional quality o our Great Value

brand and national ood brands. Reduce sodium by

25 percent and added sugars by 10 percent, as well

as remove all industrially produced trans ats

compared to a January 2008 baseline.

Since 2008, inustrially prouce trans ats were reuce by 50 percent. Less than 10 percent o oos an beverages

we sol in 2011 containe inustrially prouce trans ats. Surpassing our goal, sugars have ecline by more than

10 percent since 2008 as a result o reormulate proucts, new healthier proucts coming into the marketplace

an customers making healthier choices. Between 2008 an 2011, we ecrease soium by 13 percent across the

commercial brea category. This is equivalent to removing more than 1.5 million pouns o salt rom the market

baskets o our customers.

Hunger relief

Through 2015, award $250 million in hunger relie

grants at the local, state and national levels.

Since our commitment, Walmart an the Walmart Founation have onate more than $180 million in hunger

relie grants.

Mobilize Walmart associates and customers. Last year, through both online an in-store initiatives, we engage associates an customers in the fght against hunger.

In April, consumers vote to etermine the 21 communities across the nation to receive $2 million in grants. In September,

more than 13,000 customers participate in our Golen Spark contest, which aware over $2.5 million to Feeing

America oo banks an numerous hunger-relie agencies nationwie. Associates continue to step up to fght hunger,

volunteering more than 67,000 hours in 2012 alone.

Collaborate with government, ood manuacturers,

other oundations and corporations.

To urther our impact on hunger in America, Walmart an the Walmart Founation are collaborating with suppliers,

government, oo manuacturers an others. In 2012, supplier participation in our in-store campaigns more thanouble, increasing rom our to nine. These suppliers onate more than 8 million meals to ee hungry amilies.


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We consider it our responsibility to make a

positive impact in the communities we

serve. Whether its through the grants

Walmart and the Walmart Foundation provide to the

thousands o organizations that share our mission

o saving people money so they can live better, the

inspiring volunteer eorts o Walmart associates,

ood donations or market-specic skills training

programs, were passionate about helping people.

One community at a time.


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Ethical Sourcing

As part o our Ethical Sourcing program,

audits are conducted by third-party rms

to veriy that suppliers and their actories

are complying with our rigorous supplier

standards. We engage with suppliers and

their actories to assist them in addressingany issues detected through the audit and

to guide them in implementing processes

to prevent violations beore they happen.

We understand audits alone dont provide

lasting solutions to the complex issues that

are part o the global supply chain. Through

our Supply Chain Capacity Building and other

training programs, were dedicated to helping

our supplier partners build the capacity

necessary to not only improve workplace

practices and working conditions, butultimately improve actory managements

ability to move beyond compliance and

toward sustainable change.

We recognize that our commitment to

responsible sourcing requires partnerships

with various stakeholders across the industry.

Were committed to actively partnering

with industry peers and suppliers, as well

as nonprots, NGOs and governmentstakeholders to address supply chain

challenges and collaborate on solutions.

As we engage, we listen to eedback rom

our stakeholders and work to incorporate

recommendations where possible to make

our program better. Our goal is to positively

impact global supply chain practices by

raising our own standards and by sharing

our experience, knowledge and ideas with

other retailers, brands and stakeholders.

Helping people live better has always been core to our mission.

It applies to our customers, associates and the workers who

make the products we sell. Ethical sourcing is such an integral

part o our culture and continuing priority that weve operated

an entire department since 1992 to veriy that those in our

global supply chain are provided a sae working environment

and treated with dignity and respect. We recognize the

complexity o the supply chain and continue working to

initiate positive change via three broad strategies: auditing,

training/education and collaboration.

Walmarts participation in

various sustainability programs,

such as the toy industry, to

improve labor conditions, as

well as health and saety issues,

through the ICTI CARE process;and its role in the GSCP, which

aims to improve working and

environmental conditions in the

supply chain, through knowledge-

sharing, sends a positive message

o engagement.

Amir A. Dossal, chairman,

Global Partnerships Forum

Positioned or leadership


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Ethical Sourcings 10 most impactul programs o the past 10 years

Each year, we learn ways we can make our Ethical Sourcing organization more eective in improving

conditions or workers in our supply chain, and each year we put programs in place to ensure were

making measurable progress. Below is a high-level overview o 10 o those programs, implemented

since 2003. Its important that we position ourselves to lead on the issues that matter most. That way

well continue to ulll our mission o helping people live better today and or years to come.

10

9

8

7

6

51

2

3

4

Supply Chain Capacity Building

This comprehensive supplier and actory training

program was developed to help those in our supply

chain understand our standards and become better

equipped to meet them. Participants have said they

not only gained a better understanding o how to

comply with social and environmental requirements,

but have also implemented best practices as a result

o the sessions.

Worker saety initiativesGoing above and beyond general workplace health

and saety, weve set new industry standards or on-site

living quarters and dining acilities, and continue to

require adherence to much more stringent chemical

and machine saety criteria. In 2013, we built upon our

existing re saety programs by announcing strengthened

re and electrical saety audit requirements, as well asexpanded re saety training in Bangladesh.

Womens empowermentAs part o Walmarts Global Womens Economic

Empowerment Initiative, we launched the Women in

Factories training program, created in 2011 to educate

60,000 women working in India, Bangladesh, China and

Central America. The curriculum is centered on the core

competencies necessary to be more successul in the

workplace, at home and in the communities. The training

program is unded by grants rom the Walmart Foundation

and is being acilitated by local nonprot organizationsin partnership with actory management.

Community investment

A grant was given to the Asia Foundation in support

o a scholarship program or migrant workers in China.

Vocational training in Arica and primary education

in India were unded through our partnership with

HOPEworldwide. Our ocus on sourcing communities

began in 2006 and continues today in partnership

with CARE, Swasti and World Vision, to name a ew.

Anti-human trafcking

We partnered with multiple industry-recognized experts

and NGOs in an eort to learn more about the

indications o human tracking and slavery. Were

actively working on related issues, including the

Sumangali Scheme in India and migrant workorce

challenges in Thailand, Jordan and the U.S.

Stakeholder engagement

In 2004, we began proactive outreach to build

relationships with industry peers and suppliers, as well as

nonprot, NGO and government stakeholders, allowing

us to broaden and enhance our eorts to positively

impact the global supply chain.

95 percent green/yellow actories

Since the announcement o the goal in Beijing in 2008,

weve increased the percentage o green and yellow

direct import actories by more than 12 percent and

surpassed our goal in 2013 by achieving 96 percent.

Global Social Compliance Program (GSCP)

Were one o ve ounding members o GSCP and the

rst retailer to have completed the equivalence process.

This is the rst step toward audit sharing with other

retailers and brands, which should lead to signicant

reduction in audit duplication in acilities worldwide.

Retail market compliance

Targets are created or each retail market to measure

improvement in the percentage o green- and yellow-

rated acilities. By setting these goals, were able to

successully encourage our global markets to work with

suppliers whose actories demonstrate compliance.

Color-coded actory rating system

In 2003, we created a color-coded system to rate

actories based on severity o audit results. By assigning a

color rating to actory audits, were able to communicate

clearly to both internal and external stakeholders

regarding the compliance o our suppliers acilities.


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Ethical Sourcing continued

Now in our th year since

the summit in Beijing,

weve accomplished each

o our original goals, and

continue to leverage our

size and scale to bring

meaningul improvements

to suppliers acilities,

workers and communities

they impact.

Direct import goal achieved

In January 2013, we achieved the goal that at least 95 percent

o our direct import actories receive one o our two highest

ratings in audits or social and environmental practices. In act,

we surpassed our goal by reaching 96 percent, but not without

acing challenges along the way.

For example, when a actory doesnt manage capacity planning

eectively, this can lead to increased working hours and even

unauthorized subcontracting, especially in peak production

periods. Working with our Sourcing and Merchandising partners,

we seek to infuence suppliers or actories with recommended

improvements. Our training programs such as the modules in

our Supply Chain Capacity Building program help educate

suppliers on the reasons or these changes. However, at times,

we have to make the dicult decision not to proceed with

certain suppliers and actories when theyre unwilling to make

necessary improvements.

Our success is built on coordinated internal eorts, which include

associate education on Ethical Sourcing and Holistic Sourcing

Practices, communication o expectations to suppliers and

actories, and the broadened and accelerated rollout o our

capacity-building programs. Walmart is committed to sourcing

ethically and responsibly, and we continue to enhance and rene

our programs so we can sustain the goal weve achieved.

Retail market compliance

We set annual targets in each retail market or acilities that will

receive one o the two highest ratings in audits or social and

environmental practices. We created baselines ater initial audits

were conducted o acilities within the scope o our Ethical

Sourcing program. Appropriate stretch goals are set or each

global retail market to achieve, based on the previous years

perormance result. Our Ethical Sourcing and merchant teams

work together to achieve these results.

O our 11 retail markets, 10 attained or exceeded their percentage

goal this year. The international retail markets have collectively

shown an 8 percent improvement in green and yellow ratings.

The U.S. retail market continues to perorm well and demonstrated

improvement o nearly 3 percent.

Walmart is committed to sourcing ethically and responsibly, and

were working diligently to sustain the progress weve achieved by

enhancing and rening our programs. Additional disclosure

requirements, accompanied by the implementation o our zero-

tolerance policy, are expected to cause a signicant increase in

the number o acilities disclosed or our Ethical Sourcing audits.

This will likely impact the percentage o green and yellow acilities

were tracking because some o the newly disclosed acilities may

undergo their rst social and environmental audit as a result. Well

utilize our capacity-building training modules to orient acilities

and suppliers to our program and to equip them to improve upon

any noncompliances identied.

Goal: 95%+Percentage o direct import

actories that received one o

our two highest ratings in

audits or environmental

and social practices

Progress: 96%

Achieved by Jan. 31, 2013

Delivering on our commitments to improvestandards or workers around the world

In 2008, we took a landmark step in our sustainability journey by

hosting an unprecedented gathering o more than 1,000 leading

suppliers, Chinese ofcials and NGOs in Beijing, China. There, we set

aggressive goals intended to drive responsibility and transparency

into our supply chain. We made it clear that we expected rm com-

mitments rom our suppliers to meet strict social and environmental

standards, or them to be open to rigorous audits and to publicly

disclose all appropriate inormation.


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Suppliers are required to display the

Standards or Suppliers poster in the local

language(s) in the common areas o their

actories and must adhere to them in order

to continue doing business with Walmart.

The Standards or Suppliers are updated

regularly and include, but arent limited to,

the ollowing provisions:

Noforcedorchildlabor Nodiscrimination

Wagesandbenetsmustmeet

country law

Appropriatehiringandemployment

practices are in place

Laborhoursareconsistentwiththelaw

and not excessive

Freedomofassociationandcollective

bargaining upheld according to law

Healthandsafetyofworkers Environmentalcompliance

To view our Standards or Suppliers Manual,

go to: corporate.walmart.com/global-

responsibility/ethical-sourcing.

Audit process

Facility audits are conducted by accredited

and internationally recognized auditing rms

and are based on our Ethical Sourcing scope.

Every 6 to 24 months, a acility undergoes an

audit, depending on the ndings rom theprevious audit. The audit result is assigned a

color rating by the Ethical Sourcing team

based on the type and severity o violations

ound. Initial actory audits are announced,

with all subsequent audits being

unannounced.

In 2012, 11,568 audits on 10,035 actories

were conducted to veriy that our suppliers

were adhering to our Standards or Suppliers.

O these, 965 were conducted through theILO/IFCBetterWorkProgramorthe

International Council o Toy Industries CARE

Process. We choose to participate in these

programs in an eort to reduce audit

duplication and because o program

remediation components.

During 2012, we required our suppliers to

cease production in 214 actories due to

serious violations. A list o acilities not

authorized to source merchandise or

Walmart will be made available on ourinternalRetailLinksystemandonour

corporate website.

Maintaining integrity

We take steps to ensure that all actory

audits are conducted with integrity. Audits

are conducted by internationally recognized

and accredited third-party audit rms. These

approved audit rms are required to complete

the equivalence process or the auditing

competence portion o the Global Social

Compliance Program.

Setting expectations

Our Standards or Suppliers are Walmarts undamental expectations

o our suppliers and their actories on the treatment o workers and

impact on the environment. They also provide the ramework or the

audits that measure how well suppliers are meeting our expectations.

We ask suppliers to amiliarize themselves with the Standards or

Suppliers Manual that outlines obligations in meeting the standards

and provides details on the audit process.

11,568audits conducted on

10,035actories in 2012

214actories ceased

production due to

serious violations

in 2012


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Additionally, we implemented an industry-

best practice to conduct a percentage o

validation audits that veriy the accuracy

o third-party audits. These reaudits are

conducted by the Walmart Ethical Sourcing

Special Audit Team within 30 days o the last

audit and ollow the same protocol. We utilize

this process to drive consistency in execution

o our audit processes and protocols.

Whenever issues surace related to integrity,

these matters are reported to our Global

Ethics team, which initiates an investigation

by our Corporate Investigations team.

Worker helpline

In addition to the audit process, violations o

our Standards or Suppliers can be reported by

actory workers condentially and in their local

language. On the Standards or Suppliers

poster that actories are required to display,

theres a toll-ree telephone number, e-mail

address and website that workers can use to

anonymously report violations and concerns.

All reports are collected by a third party and

directed to our Global Ethics oce, where

theyre reerred or investigation and, i

necessary, corrective action.

Inormal supply chain

Were beginning to identiy ways to validate

that our Standards or Suppliers are met in

inormal supply chain settings where people

may work in small community centers or out

o their homes. Recently, weve engaged one-

on-one with specic suppliers to gain a better

understanding o these supply chains and therelated challenges. Certain products, such as

woven i tems, require sk illed production by

hand and are oten produced outside o a

actory setting.

We worked closely over several months

with one supplier, whose supply chain in

China is made up o actories and home-

based production sites, to learn the details

o its manuacturing processes. Through

this exchange, we were able to provide

guidance on management systems that

were needed to validate compliance with

our standards. The supplier understood the

importance we place on being able to

veriy that workers receive appropriate

wages and beneits. As a result, the

supplier implemented more robust

procedures or recording wage payments

and collecting age documentation and

verication. They also utilize signed contracts

with home workers that conrm our

standards have been communicated to

workers individually.

In some countries, woven baskets are

produced in cooperatives where much

o the work is done in community centers

or in homes. As part o our eorts to

understand the inormal supply chain, we

worked closely with one such supplier to

identiy ways to integrate our Standards or

Suppliers into their supply chain in a

culturally sensitive way.

Weve also begun engaging with various

stakeholders to nd ways to harmonize

strategy and activities into an industryapproach. As part o this eort, Walmart

is collaborating with the Alliance or Artisan

Enterprise, a group ormed by the U.S. State

Department and the Aspen Institute, to

examine how to embed ethical sourcing

principles into working with small businesses.

We look orward to continuing such dialogue

with our suppliers, expert organizations,

NGOs, other retailers and brands to develop

solutions that work well across the inormal

supply chain.


Developingsolutions together

Full Circle Exchange (FCE), in

partnership with Gahaya Links,

supplies handcrated baskets to

Walmart.com. Gahaya Links is a

women-owned business thatworks with cooperatives located

throughout Rwanda to weave

baskets and produce home

decor, apparel and accessories.

The business began shortly ater

the genocide in Rwanda and has

been instrumental in helping

bring together Hutu and Tutsi

women through the marketplace.

Following an audit o the

cooperatives and the actorywhere the baskets were produced,

we had the opportunity to meet

in-person with the ounder

and CEO o Gahaya Links. We

brainstormed ways necessary

improvements could be imple-

mented while still respecting the

culture o the women involved.

It was both an inspiring and

humbling conversation.

All o us agreed that therelationship being built

among FCE, Gahaya Links

and Walmart could bring

meaningul change to the

supply chain.

Mark Priddy, CEO/co-ounder

Full Circle Exchange


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1,742 actoriesand 497 suppliersparticipated in

Factory Audit

Orientation

Training in 2012

985 actories and347 suppliersparticipated in

Violation

Correction

Training in 2012

181 actoriesparticipated in the

Orange School

Program in 2012

Education and training initiatives

Supply Chain Capacity Building

Were committed to working with our

supplier partners and their actories to

help them develop the capability to improve

working conditions by investing in education,

training and operational eciencies. In 2012,

we created our Supply Chain Capacity

Building (SCCB) program, which brought

together established training modules

(Orange School Program, Supplier

Development Program and Supplier Round

Table) and newly developed modules

(Factory Audit Orientation and Violation

Correction Training) into a well-rounded

collection o instructional curriculum.

The SCCB program components vary rom

hal-day group training sessions to several

months o one-on-one engagement with

suppliers and actories. Topics range rom

Ethical Sourcing orientation to managing

issues that are regionally specic to develop-

ing systems that encompass many acilities

within a suppliers manuacturing base.

SCCB is an integral part o our overall

strategy to eect continuous and sustain-

able improvement within the acilities that

produce our merchandise.

Factory Audit Orientation

Factory Audit Orientation is a training

program that prepares new actories and

associated suppliers or participation in the

Ethical Sourcing program through training

in the ollowing areas:

WalmartsStandardsforSuppliers

Socialandenvironmentalcompliance

Enhancedresafetystandards

and requirements

Chemicalandmachinesafety

Dormitoryandcanteenstandards

Auditscopeandfactorydisclosure

Factoryauditprocess,resultsand

consequences

Country-andregion-specictrends,

laws and best practices

Eectivecorrectiveaction

plan development

Violation Correction Training

Factories with higher-risk observations are

requested to attend Violation Correction

Training so they can gain a better

understanding o the Walmart Ethical

Sourcing program requirements and

Standards or Suppliers. The training

addresses common trends related to social

and environmental compliance, while

ocusing on topics based on relevance to

the attending actory location or industry.

Factories become equipped through root

cause analysis and corrective action plan

development to remedy potential violations

and work toward achieving acceptable

audit ratings.

Orange School Program

The Orange School Program is an advisorytraining program aimed at selected actories

and suppliers. The program provides one-

on-one, hands-on training to resolve high-

risk social and environmental violations.

Factory management is taught a systematic

approach to continuous and sustained

improvement, utilizing root cause analysis

methodology, along with procedures or

early detection o noncompliances. The

importance o ongoing sel-monitoring

between audits is emphasized.

SupplyChainC

apacityBuilding

Training

Supplier Development Program

Supplier Roundtable Program

Violation Correction Training

Factory Audit Orientation

Environmental Compliance

Machine & Chemical SafetyDormitory Standards

Orange School

Information

Remediation

Best Practice Sharing

Transformation


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Supplier Development ProgramThrough our Supplier Development

Program (SDP), Walmart has committed to

work proactively with our supplier partners

to help them improve standards and

manage their actories more eectively. The

program provides valuable training ocusing

on key outcomes such as empowering

workers and developing eective

communication with actory management.

In 2012, we partnered with approximately

100 new suppliers and worked with oursuppliers who graduated in 2011 to bring

additional actories into the program. As we

go orward, well continue as guides and

advisors or these graduated suppliers as

they embed systems into their other

actories, taking the program to a

sustainable position.

This program continues to promote improved

working conditions around the globe with

more than 300 suppliers having participated

in the program to-date, touching the lives othousands o workers in our supply chain.

Jarden Consumer Solutions was the rst

supplier to graduate rom our Supplier

Development Program. Their participation

in the initial pilot phase o the program

assisted us in determining that the

ramework was practical and workable.

Strong internal monitoring and social

compliance perormance systems enable

Jardens actories to ocus on continuousimprovement in their supply chain. To date,

Jarden has had a total o 12 actories

complete the SDP.

Another supplier, Stanley Black & Decker,

has been involved in the SDP rom the

beginning and will have 10 actories

enrolled as o early 2013. This supplier

ocuses on relaying its learnings through

best practice sharing and training actory

management throughout its supply chain.

Stanley Black & Decker has worked toimprove social and environmental practices

within their actory base since 2003.

Supplier Round Table

The Supplier Round Table (SRT ) program

is a orum or our suppliers, actories and

stakeholders within sourcing regions to come

together to discuss concerns that impact

social, economic and environmental aspects

o their operations and to learn best practices

rom each other. In general, round-table

meetings ocus on Ethical Sourcing goals andobjectives and current issues that are relevant

to that region. Previous topics have included:

management o contract and migrant labor,

re saety, environmental requirements and

best practice sharing on energy eciency.

Walmart and Jarden Corporation are

working toward a uniied goal, and

through this partnership were able

to shit rom a compliance-based

program to one thats perormance-

based with long-term sustainable

improvements.

Chris Akins, vice president,

Global Security and Social Compliance,

Jarden Corporation

[By] implementing the

Supplier Development

Program in our company

weve strengthened our

ethics and business

practices throughout our

supply chain. Our Pack

Houses have improved

communication with

workers, have built trust

and improved productivity.

Natalia Aranciba,

certications chie,

GESEX S.A., Chile

437 suppliers352 actoriesparticipated in the

SRT program


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Environmental responsibility

Our initiative to include environmentalcompliance in audit standards began with

the commitment that Mike Duke made at the

Beijing Sustainability Summit in 2008, when

he stated: Our audits will now include a ocus

on specic environmental criteria including

a actorys air emissions, its wastewater,

discharges, and its management o toxic

substances and hazardous waste disposal.

The environmental standards are based

on mandatory compliance with legal

requirements. Demonstration includes theull set o approved permits, in addition to

monitoring reports as required by law and

validated by independent audits. The

standards also promote the maintenance o

inventories to track resource use and greaterenvironmental eciency, as well as

implementation o best industry practices.

We worked closely with AECOM, a leading

environmental management consulting rm,

to develop extensive training materials in

English, Spanish and Mandarin, which are

available to suppliers. More than 3,000 actories

around the world were trained by our Ethical

Sourcing teams between 2010 and 2011.

Factories continue to receive training on the

environmental component o our auditsthrough our capacity building programs.

In 2009, we developed our

standards on the basis o the

Environmental Reerence

Framework o the Global

Social Compliance Program

(GSCP), which covers nine

areas, touching on all aspects

o the actorys operating

environment:

Waste management

Wastewater and

eluents management

Air emissions management

Water management

Energy use and greenhouse

gas (GHG) management

Land use and biodiversity

Environmental

management system

Hazardous substances

management/soil and

groundwater pollution

prevention

Noise pollution

In China, weve joined orces with the Institute or Sustainable

Communities Environment, Health and Saety Academy to provide

cost-eective and practical training to actory mid-level management.

Weve also partnered with the Institute o Public & Environmental

Aairs (IPE), an environmental NGO in China that aims to curb

environmental pollution in Chinas manuacturing hubs by integrating

transparency and raising stakeholder awareness in the supply chain.

In 2012, Walmart was ranked ourth out o 48 international

brands and retailers or eforts to improve environmental

compliance in the supply chain in China.

IPE uses government-sourced data to identiy actories in China

that ail to meet legal standards related to air and water pollution,

making the list o noncompliant actories publicly available. Since

2009, when the irst actory in our supply chain was removed rom

the IPE database, through our eorts, weve successully worked

with suppliers to remove 35 total actories. The impact is less about

the number o actories removed and more about the number o

communities that beneit rom reduced pollution as a result.

Today, were actively involved with a number o ad ditional actories

that we anticipate will be removed in the coming year.

Walmart has continued

to proactively use the

Pollution Map Database

to screen their suppliers

in China. We hope that as

a leading global brand,

Walmart can meet rising

public expectations and

encourage more partners

and suppliers in China to

disclose pollution

discharge data andenhance environmental

perormance.

Ma Jun, director,

Institute o Public and

Environmental Aairs


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Women in Factories

training program

In 2011, Walmart and the Walmart Foundation

launched an initiative to empower women in

actories. This is a ve-year initiative that will

train women who work in industries where

the workorce is predominantly emale.

Together with NGO partners, were helping

establish womens empowerment programs

in 150 acilities in India, Bangladesh, Central

America and China. As a rst step, 60,000women will receive Foundational Training to

provide them with the core competencies

necessary to be more successul in the work-

place, at home and in their communities.

Through this Foundational Training, women

are learning undamental lie and work skills,

such as health and communication. From

this group, 8,000 high-potential women will

be oered Advanced Training, which includes

management and leadership skills training,

in addition to more in-depth instruction onwork and lie skills. Obtaining these skills can

enable women to become better advocates

or themselves.

The training curriculum, developed by CARE,

will be made open source or others to use,

and Walmart and the Walmart Foundation

will share training tools and learning with

the public. The aim is to strengthen the

manuacturing industry by making womens

empowerment central to it, through

promoting collaboration among stakeholders

and leveraging each others knowledge and

expertise. As such, other retailers, brands

and suppliers are welcome to replicate the

program developed by NGO partners,

Walmart and the Walmart Foundation, or

utilize the curriculum and tools in their own

programs. Because many o the participating

acilities are shared with other brands and

retailers, the industry as a whole can benet

rom the program.

Implementation is acilitated by Swasti

in India, by CARE in Bangladesh, and by

World Vision in El Salvador and Honduras.

In 2012, we began working with 15 actories in

India and 15 actories in Bangladesh, with

16,667 women and 4,310 men having

received oundational training to date.

Program implementation will begin in

Central America in 2013 and in China

in 2014. The program is being evaluated by

Northwestern University in partnership

with Development Alternative International

(DAI) and Mission Measurement.

Ultimately, the objective is or actories to

operate sel-sustaining training programs

where work environment will be more

receptive to promotion and inclusion o

emale work talent through engagement

with both actory management and the

male worker population. A inal result

would be a pipeline o emale talent in

each acility.

Womens Economic Empowerment Initiative


Im 46 years old and I eel being empowered at this age isnt too

late because a woman plays various roles in her lie. What Ive

learned in this training will help me justiy those roles.

Foundational Training participant, Pointec Pens,

Bangalore, India

Supplier round tables areheld quarterly in India andBangladesh with actoriesparticipating in womensempowerment and have beenvaluable to the success o theprogram. Factory workersengage directly with actorymanagement, raising theircondence and buildingbridges o communication.

The leadership and humanresource teams rom the actoriesalso have the opportunity todialogue and share learning.A session in Bangladesh led toone actory helping anothercreate plans or schedulingtraining sessions around pro-duction. The rst actory hadovercome similar challengesand was able to help thesecond actory becomemore successul in theGlobal Womens Economic

Empowerment Initiative.

For a video related to our Women

in Factories program, go to the

online version o this report at

http://corporate.walmart.

com/microsites/global-

responsibility-report-2013.


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Program curriculum

Program curriculum was developed by

CARE and contextualized, thus ar, or

Bangladesh and India by CARE and Swasti,

respectively. When the program begins

in a actory, all men and women who

work on the production line participate

in Foundational Training. In addition,

implementing partners work with local

nonprot organizations to provide services

such as literacy training.

Foundational Training (15 hours)

Understandingandutilizingyour

strengths

Managingstressandtime

Eectivecommunication

Gendersensitivity

Menstrualhealthandfamilyplanning

Hygieneandsanitation

Occupationalhealthandsafety

Applicationoflearningatwork

and home

Advanced Training (99 hours)

Basicliteracy

Technicaltraining

Functionalliteracy/numeracy

Personalnance

Healthandnutrition

Earlychildhooddevelopment

Communicationandnegotiation

Problemsolving,decision-makingand

goal setting

Violenceagainstwomen

Gender,socialstatusandrelationships

Legalempowerment

Self-managementandleadership

CARE is proud o our partnership with Walmart to enhance skills and improve

opportunities or emale actory workers in Bangladesh. Weve implementedworkorce engagement initiatives or more than a decade, and were pleased the

curriculum rom this program will be available to other buyers and actories around

the world or ree. Women are key to ending the cycle o poverty, and its vitally

important that they have the opportunity to realize their ull potential. This program

will empower 60,000 women actory workers and make a sustainable impact in their

amilies and communities.

Dr. Helene D. Gayle,

president and CEO,

CARE USA

Holistic sourcingpracticesWe know our sourcing and

purchasing practices have an eect

on suppliers. In 2011, we ocused

on our internal awareness about

the eects o business decisions on

the supply chain. In 2012, we began

robust training sessions rom thetop levels o the merchandising

organization to the category levels,

beginning with the apparel

division. Currently, the merchant

development teams and Ethical

Sourcing are coordinating the

development o mandatory

embedded training programs.

These courses will be required

or merchandising associates.

Holistic sourcing meansmerchandising, sourcing and

suppliers all work together to

build a responsible supply chain.

We want to create an environment

o transparency and communication

among these stakeholders so

that challenges can be resolved

eectively. As we explore the

reasons behind unacceptable

behavior, such as unauthorized

subcontracting, well work to

determine i activities on our side

can positively inuence suppliers

and actories to make appropriate

decisions. A part o holistic sourcing

is better planning by all parties. For

example, accurate business ore-

casting can better enable suppliers

and their actories to meet set time

lines. This is one area speciically

being targeted or improvement.


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Dormitory and canteen standards

The health and saety o workers in our

supply chain is o utmost importance to us.

In addition to setting standards or working

conditions at production acilities, last year,

we implemented speciic standards related

to on-site dining and living quarters. Theseenhancements require suppliers to provide

sae, healthy and sanitary dormitory and

canteen acilities or their workers. Specically,

workers should be adequately prepared to

saely evacuate acilities in the event o an

emergency and have access to appropriate

washroom acilities. Security measures

should also be implemented to protect

workers and their property.

We audited against these requirements

in 2012 and communicated the indings

to suppliers. Now that acilities are more

amiliar with our requirements, as o March 1,

2013, the Ethical Sourcing ratings that a

acility receives as part o the audit process

will refect the acilitys level o compliance

with the enhanced standards.

Machine and chemical saety

The wide variety o products that are sold in

our stores are sourced rom diverse regions

and industries that oten have dierent

requirements or machine and chemical

saety. To enhance our own standards and

drive industry change, we implemented acommon set o requirements or all our

sourcing markets, which incorporated such

international standards as OSHAs 18001:2007.

Health and saety management, risk assessment

and training, as well as specic areas such as

protection against noise, re, hazardous

substances and electrical equipment, are

among the areas addressed by international

occupational health and saety specications.

Inormation gathered through audits during

2012 has enabled us to pinpoint specic

challenges acilities ace with regard to

meeting our saety standards. It has also

allowed us to share recommended actions

necessary to address these issues.

Worker health and saety


In 2012, more than 4,000 actories around the globe received training

on our enhanced standards in the areas o Dormitory and Canteen

Saety as well as Machine and Chemical Saety. Management was

instructed on implementation o the standards within the actory

operating environment. The training also raised awareness o industry-

specic hazards and best practices to correct them. At the same time,

the benets to the workers and actories were demonstrated during

the training to encourage adherence to the new standards. We also

utilize our regular audit process to educate actories and suppliers on

appropriate corrective action required to alleviate risk.

One o the most helpul

modules in the (Factory

Audit Orientation) program

was the dormitory and

canteen standards, and

this has directly led to us

implementing industry-best

practices in these areas.

From a business perspective,

were now clear on what

levels o compliance are

expected o us.

S.P. Apparels Ltd.,

India


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A global approach to ire saety

As part o our eort to work with suppliers

globally to improve acility conditions

related to risk o re, weve made several

modications to our protocol or auditing

and assessing acilities. Facilities ound to

have re saety-related violations will have

30 days to take corrective action beore

production is barred. In addition, weve put

in place a set o requirements that build

upon our current program. While these may

be above and beyond legal requirements,

they must be implemented and adhered to:

Nolockeddoors.Doorsshouldhave

push-bar operation or easy exit in case

o emergency.

Alldoorstoexitstaircasesandre

escapes must be kept closed at all times

to prevent smoke rom lling the

stairwell and keeping workers rom saely

exiting the building.

Barredwindowsmusthaveaninternal

mechanism or emergency release or

removal to allow or worker escape andmust remain unlocked.

Alloorsandbuildings,including

dormitories, must have a secondary exit.

Aone-hour,re-ratedenclosed

staircase or external re escape

route is recommended.

Fireescaperoutesmustleadtosafe

assembly points without any

obstructions. Assembly points must be

designated and marked as such and

must be kept clear at all times.

Properaccessforredepartment

vehicles and other re-ghting

equipment in the actory premises.

Adequatewatersupplyforsprinklerand

re hydrant systems.

Traveldistancetoanexitcannotexceed

61 meters (200 eet) in buildings without

automatic re sprinkler systems.

Audible,visibleandoperablesmoke

alarms placed appropriately throughout

the building with at least the minimum

number required by law.

Audibleandoperablerealarmsthatcan

be heard in all parts o the building and

operate as one system.

Markedandlightedexitroutesfor

all foors and areas o the building,

including stairwells. Emergency lights to

be re grade industrial emergency

lights or use in smoke and re

environments.

Everybuildingmustbeinspectedon

each work shit by trained personnel to

ensure the above criteria are met.

Quarterlyjointredrillsincludingall

foors o the building to be overseen

by an external party, such as the re

authority, or timely and eective

personnel evacuation. Documentation

o these drills must be retained by the

acility or review during any visit to

the acility.

Firesafetytrainingconductedforall

personnel every six months.

Personnelon-boardingprocessshould

include re saety training upon hiring.

Trainedreghtersforeachoorof

the acility.

Validrelicensewhererequiredbylaw.

Validconstructionapprovalwhere

required by law.

Hazardous/ammablechemicalsandcombustible materials must be kept

away rom ignition sources.

Crche/childcarefacilitiesmustbe

on the ground foor o the building,

preerably located in a separate

nonindustrial acility.

Worker training lmsWe understand the value o

connecting with workersdirectly regarding issues o

saety in the workplace. As part

o our eorts to provide much

needed inormation and training

to workers, we collabor ated

with other brands and retailers

in Bangladesh to create lms

ocused on ire saety. Most

recently we were involved

in a similar project in India

where ilms on health and

saety, overtime, workercommunication, and harass-

ment and abuse were created

or workers on all levels.

Facilities ound to

have re saety-

related violations

will have 30 daysto take corrective

action beoreproduction is

barred.


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Enhanced ire saety standards

Bangladesh

While were taking an overall global

approach, we also recognize theres a need

or heightened attention to re-related risks

in countries such as Bangladesh. Our plans

include collaborating with other brands and

retailers to drive industry-wide results. In

the interim o a collaborative approach

being clearly dened, weve implemented

certain actory requirements to address the

most serious concerns.

In 2012, we completed our work with

suppliers to phase out o acilities deemed

to be at high risk or re-related incidents

because they met one or more o the below

re saety risk criteria. Factories meeting any

o these criteria are assessed as red-ailed

and are no longer eligible or Walmart

production or any retail market.

Fire safety risk criteria related to occupancy:

Residentialbuildingconvertedintoan

industrial acility

Facilitiesinmultistorybuildingwitha

ground-foor marketplace or commercial

shops on any foor

Facilitiesinmultistorybuildingshared

withotherfactories/enterprisesunder

separate ownership

Facilitieswitharooftopthatdoesnt

meet legal requirements and is not

completely clear

Facilitieswheretheresaresidence

located within the buildingManuacturing in a building originally

constructed or an alternate purpose, such

as a residence, can lead to many high-risk

issues. Furthermore, when buildings are

occupied by various types o businesses

under separate ownership executing a ull,

eective and sae evacuation o the

building can be next to impossible.

In addition, all acilities in Bangladesh are

now required to undergo a mandatoryelectrical and building saety assessment

provided by a credible independent

external certication agency. The initial and

rst ollow-up assessments will be unded

by Walmart. To build on this, Walmart is

contributing $1.6 million toward the

establishment o an Environment, Health

and Saety (EHS) Academy in Bangladesh by

the Institute o Sustainable Communities,

a U.S.-based NGO that has also set up a

similar successul Academy in China.

Through the EHS Academy, apparelmanuacturers in Bangladesh will have

access to high-quality, aordable and

comprehensive training on re saety and

all aspects o environment, health and

saety. The Academy will provide a local,

long-term platorm or addressing EHS

challenges in the supply chain through

technical training and engagement. In the

interim, Walmart is also unding re saety

and emergency response training or

actory workers and management, provided

by an independent third party.

Critical to the success o our approach is

working with the government o Bangladesh

to strengthen legal requirements around re

protection, worker training and building

saety, including the phase out o residential

and commercial mixed-use buildings.

Likewise,increasedcapacityofrelevant

agencies is needed or oversight o these

requirements. Were calling on industry

associations to support these eorts as well,

especially with regard to training and

moving production out o unsae buildings.



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Walmart zero-tolerance policy orunauthorized subcontracting

In order to continue to improve transparency in our

global supply chain, we instituted a zero-tolerance policy

or unauthorized subcontracting and will terminate our

relationship with any supplier engaging in unauthorized

subcontracting to source merchandise or Walmart. Any

acilities subcontracting sourcing o Walmart merchandise

to an undisclosed or unauthorized acility are subject to

being classiied as red-ailed in our system and may be

permanently barred rom sourcing merchandise to

Walmart or all retail markets.

Program enhancements

Were committed to supply chains that empowerthe people who work in them, and the amilies

that are supported by them, to live better. What

we learned rom the tragic incident at Tazreen

Fashions,Ltd.inBangladeshhascausedusto

reevaluate our processes and strengthen our

policies and procedures. Our dedication to

responsible sourcing includes raising our own

standards and partnering with other stakeholders

to improve the standards or workers across

the industry.

In January 2013, we distributed a letter to all suppliersglobally to inorm them o a new zero-tolerance

policy or unauthorized subcontracting as well

as Ethical Sourcing program enhancements.

These new policies were designed to strengthen

compliance with important saety standards. Weve

implemented several new policies, the rst steps

o many, as we work to create more transparent

and productive supply chains and increase

opportunities or those who work in them.

Newly disclosed acilities will now be required to

prequaliy with an Ethical Sourcing audit prior tobeing made active. Production may not begin

until ater the acility has passed the ull Ethical

Sourcing prequalication process. Production in

a acility that hasnt been prequalied will be

deemed unauthorized subcontracting.


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U.S. agriculture, aquaculture

production and seaood

Weve increased our ocus on sourcing

more products rom local suppliers and

armers in the U.S. This is a good thing or

small business owners, local communities

and the U.S. economy.

At the same time, we recognize that this

initiative presents unique challenges or our

small suppliers who may not have theresources necessary to implement Ethical

Sourcing requirements. Were committed

to helping our supplier partners address

these challenges. The rst step was or us

to better understand our agriculture and

aquaculture supply chains in the U.S. by

looking deeper into our supplier acilities

and processing centers, including arms

and resh packing acilities.

Next, we began development o a

comprehensive support program thatincludes education, training and capacity

building to enable suppliers and their

actories to meet our expectations and

requirements. In October 2012, we conducted

37 localized training sessions and several

webinars or suppliers throughout the U.S.,

ocusing on our standards and supported

by an e-learning module to be rolled out in

2013. Using audits and other metrics, we

validate compliance with our standards at

supplier acilities.

Because these challenges arent exclusive to

Walmart, weve collaborated with NGOs, as

well as the public and private sectors, to

identiy an approach that will provide real

and meaningul solutions or our supply

chain and the industry as a whole.

Seaood

Weve engaged with the United Nations

Inter-Agency Project (UNIAP) on human

tracking in Thailand. On June 6, 2012,

UNIAP convened an expert consultation

to discuss human tracking and labor

exploitation in the seaood industry. Given

that Thailand is the worlds largest exporter

o shrimp and that Thai exports account or

one-third o the U.S. shrimp market, this

meeting marked a signicant opportunity

or private sector, government, U.N. and

civil soc

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