Environmental, Social & Governance Briefs

Walmart: Company’s Corporate Citizenship and Government Relations Partnering for Social Change

September 16, 2020

Throughout the COVID-19 pandemic and since the murder of George Floyd, company’s government relations and corporate citizenship teams have begun to work more closely. As the public anger and outcry over the racist aspects of these events intensifies, demands that companies take a more active role in addressing social problems are beginning to include public policy advocacy. I spoke with Gerard Dehrmann, SVP, Public Affairs & State and Local Government Relations, Walmart Stores, Inc. and Kabir Kumar, Senior Director, Community, Walmart.org. to explore the dynamics of the relationship between company’s government relations and corporate citizenship functions and how they can work together to greater effect.

Jeff: How did this partnership grow over time?

Gerard: when I started in Government relations in 2002, Walmart was opening 500 - 600 stores a year, so we were being looked at under a microscope; we were under attack for a variety of issues, some fair, some not fair. As a result, government relations became a counselor to the business function; along with store management teams, we often serve as Walmart’s eyes and ears for locals’ sentiment in the communities where we operate.

Kabir: most Walmart.org giving early on was done at the store level; there was not a connection to Walmart’s broader philanthropic goals. Gradually we shifted to strategic philanthropy and took a shared value approach. Today, our Global Responsibility function includes charitable giving through Walmart.org and our sustainability work. In both areas, we seek to affect change by leveraging Walmart’s core strengths. While most of our team is in Bentonville, much of Gerard’s team is out in the field with a community relations role.

Jeff: Can you give an example of how this works?

Kabir: on August 3, 2019 a gunman walked in one of our stores in El Paso, Texas killing 23 people and injuring many more. This was a hate crime and the FBI responded to it as an act of domestic terrorism. The same day, Gerard had his team on the ground in El Paso. Working with non-profit organizations in the El Paso area they were able to mobilize support for the surrounding communities  and establish a partnership with a local foundation to set up a relief fund. Because our prior work in these communities had established our authenticity and credibility, we were rapidly able to achieve a positive impact working with local groups.

Jeff: As a result, Walmart stopped selling certain guns and ammunition, correct?

Gerard: yes, after much internal discussion, we stopped selling ammunition for handguns and for assault rifles. Because we needed to ensure that our actions were meeting our strong words condemning the shooting, we made a fundamental change to our merchandise mix. Several years before that shooting, in response to a number of school shootings, we raised the age to purchase a firearm or ammunition at Walmart to 21, but I think we knew that we were going to need to do more. We now have a background check protocol which exceeds federal government requirements and have called for elected officials to strengthen background checks and to remove weapons from individuals that have been determined to pose an imminent danger.

Jeff: How were these decisions made?

Gerard: both of our groups, along with corporate communications, report into Corporate Affairs. Our work together sometimes allows us to step out on a ledge – to come together and recommend up. Our Executive Vice President of Government Affairs reports to our CEO, Doug McMillion. A decision of this scope involves all the major functional areas debating the pros and the cons, economic impact, reputation, etc. In the end, the decision was made as it was felt it was the right thing to do. In such a polarized nation, however, we were both applauded and attacked.

Jeff: In early June, your CEO said the company will invest $100 million in efforts related to racial equity and justice and said that charitable giving is “not enough” and companies must be part of the solution. Can you tell me more about his statements?

Kabir: our CEO’s announcement was the start of a conversation. We looked inward first, asking ourselves, what is Walmart’s role in racial equity? It’s a deep-rooted problem and we can’t rush into it. So we are listening, being thoughtful and intentional, and engaging for the long-term. Even though we are a large global company, driving societal change can be difficult. Externally, what are issues we think we can positively impact? We are creating the Center for Racial Equity in Walmart.org to advance economic opportunity and healthier living, strengthen workforce development and related educational systems, and support criminal justice reform. 

Gerard: one way to work to connect the business with the community and our elected officials is to engage our business leaders in the role of government relations and take them to city halls and state capitals. It helps them better understand how government operates. It also helps government officials to better understand how public policies impact Walmart’s operations and our employees – who are also their constituents.

Jeff: thank you Kabir and Gerard for a look at Walmart’s community and government work. You aren’t afraid to tackle the difficult issues even when they might not be popular with all of your customers. Your work is a good example of corporations leading the charge for change, or at least being a beneficial force in the fight.