updated 1/31/2006 10:06:14 AM ET 2006-01-31T15:06:14

Wal-Mart has committed itself to taking most of the fish it sells in North America from environmentally sound sources, in its latest initiative to improve its much criticized record on environmental and social issues. 

The world's largest retailer has pledged that all of its U.S. fresh and frozen fish, excluding farmed fish, will eventually come from fisheries certified as being "sustainable" by the Marine Stewardship Council, meaning that the sea areas they come from are not being over-fished.

Lee Scott, chief executive of Wal-Mart, set out ambitious targets for improving Wal-Mart's environmental performance in October, saying that Wal-Mart's role as the world's largest retailer gave it "unique" opportunities to raise industry standards. 

Since then, the retailer has announced it will only source its shrimp from farms meeting industry standards established by the Global Aquaculture Alliance. Wal-Mart has also established "sustainability networks" that bring its suppliers and its buyers together with concerned non-profit groups, covering products including agricultural products, seafood, and gold and jewelry.

Rupert Howes, head of the Marine Stewardship Council, said: "It is hugely significant that Wal-Mart is doing this, and setting a real example to the rest of the industry."

However, only a small number of fisheries have been certified as sustainable. This means it will take between three and five years for Wal-Mart to achieve its goal.  The company has also been showing new interest in improving conditions in garment and footwear factories – another area highlighted by Mr. Scott.

But it is still struggling to persuade many of its critics that it is serious about its conversion to the cause of corporate social responsibility.

It has been trying for a year to hire a senior director to coordinate relations with "stakeholder groups", including activist and community groups, a job which it says  will oversee the effort "to create a new model of business engagement that uses market-based changes to create societal value".

But there have been concerns about the authority of the new position, given the scope of the challenge facing the company - similar positions at Gap, Nike, Reebok and BP hold the higher rank of vice-president.

However, David Schilling, of the Interfaith Center for Corporate Responsibility, which has co-ordinated numerous shareholder resolutions critical of Wal-Mart, said critics would watch for genuine changes that went beyond its current propaganda war.

"If stakeholder engagement develops at a high level and is integrated into the way business decisions are made, then that will be a good indication that the company is beginning to turn the corner," he said.

Wal-Mart faces considerable challenges if it is to adapt its operations to the range of standards now embraced by some of its rivals. Unlike Nike or Gap, both of which have been active in developing supply chain monitoring, it sells a vast range of merchandise ranging from bananas to diamonds; its supply chain uses 60,000 factories worldwide for its own brand products alone, compared to around 700 at Nike.

© The Financial Times Ltd 2010. "FT" and "Financial Times" are trademarks of the Financial Times.


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