Wal-Mart planned to announce today new programs aimed at helping women-owned businesses and female workers, as the company continues to deal with the possibility of individual claims of sex discrimination after the Supreme Court threw out a class-action suit by women workers this summer.
In an advance draft of the announcement, Wal-Mart said it planned to source a total of $20 billion in products from women-owned businesses in the U.S. over the next five years, which works out to an average of $4 billion a year, versus the $2.5 billion a year it currently spends, and to double what it buys from women-owned businesses globally by 2016.
The company said it would also support training of women in factories and farms that are Wal-Mart suppliers, donate $100 million to causes supporting women’s economic development, and ask its vendors and ad agencies or public relations firms to increase gender and minority representation on their Wal-Mart accounts.
“If you look at retail, the vast majority of our customers are women, and if you look at Wal-Mart, the majority of our associates are women,” said Leslie Dach, executive vice president of corporate affairs for Wal-Mart, in an interview. “It makes complete sense for us to really have a focus on how we have the best associates we can, how we help women suppliers succeed and how we engage our communities.”
The $5 billion a year that Wal-Mart plans to spend with women-owned businesses would still be a small percentage of Wal-Mart’s overall budget. The $4 billion a year, on average, that Wal-Mart will spend sourcing from women in the U.S. works out to about 5 percent of the company’s annual operating expenses.
“Over the course of the five years, we are going to both have to seek out the businesses that are there, and open ourselves up to that, and also we’re going to help these businesses grow,” Dach said. “They’ll range from construction to farming to food, and one of the great things about this is we will also improve the assortment of products we sell to people, and help our products become more relevant.”
Dach said the Wednesday announcement was not in reaction to a class-action suit against Wal-Mart that charged unfair treatment of women in the workplace. Though the Supreme Court recently threw out the case, some of the plaintiffs have said they will still try to sue the company through individual claims.
But some critics were quick to fault the company’s plans. Janet Shenk, a former AFL-CIO official, said Wal-Mart’s move to buy more products from women was a way of not dealing with problems.
“Once again, Wal-Mart is avoiding every issue that touches on how its products are produced,” said Shenk, who oversees some corporate grants at the Panta Rhea Foundation, which works to combat corporate influence. “It’s not about who owns the factory. So far as I know, there’s no evidence that factories and businesses owned by women treat their employees better or have better conditions than factories and businesses owned by men.”
Yet CARE, a nonprofit development and relief agency, said Wal-Mart support would help advance its work.
“The typical woman we work with is a woman working in an apparel factory in, say, Bangladesh,” said Melanie Minzes, senior director for development at CARE. “She is probably illiterate, probably gets sick pretty easily because she doesn’t have much health education. With Wal-Mart’s commitment, we are going to be able to reach tens of thousands of women like her and improve their lives and economic positions. We will be able to teach them to read, how to address common abuses they face and what proper nutrition is, all things that will make her a better, healthier employee.”
Wal-Mart has measured the gender and ethnic diversity at law firms that work for it since 2005. In Wednesday’s announcement, it did not specify what new standards might be. Asked why there were no specifications, Dach said that “it’s important for us to be realistic about that as we make change — we’re not asking anyone to turn over their workforce, but we’re confident that it will help us get results like it did in the legal field.”
Wednesday’s announcement is similar to ones Wal-Mart has made in the past several years outlining goals on locally sourced agriculture, addressing “food deserts” in urban areas and reducing energy use.
Customers shop at a Wal-Mart store in Bentonville, Ark., earlier this year. The company says it will donate $100 million to causes supporting women's economic development.