Traditional costs include expenses like supplies, energy and packaging. But the net true cost considers issues such as waste-to-landfill, greenhouse gas emissions, economic mobility, worker safety and food safety. These are all examples of the effects production may have on the environment, in local communities, or on the people who grow and make what we sell.

We believe a business should strive for not just the lowest prices, but the lowest true cost for all. Low prices benefit customers, but low true costs benefit everyone. To do this, we can’t sit on the sidelines until after a product is made. Walmart’s role is unique. We have a large presence in the world, and with that presence comes great opportunity to change how business is done. In addition to tackling social and environmental issues in our own operations, we need to actively engage in and reshape the systems in which we work.

Food is a good example. To feed a growing planet in a sustainable way, we need to work with small and big farmers at scale. One of our initiatives is a Climate Smart Agriculture Platform, which will help drive improvements in agricultural productivity and fertilizer and resource use over a 10-year period. Working with our suppliers and using The Sustainability Index, we are focused on increasing management, tracking and reporting of greenhouse gas emissions and water use on farms. We’re also working to help farmers thrive through better training, yields and income.

The world faces complicated issues across the supply chain, and there are few easy solutions. No company can solve them alone. But by embracing responsibility and collaboration with others, we can make a significant difference in the world that will serve us well in the long term.

In these pages, we’ll share what we’re doing in three main areas:

• Creating economic opportunity for our associates, suppliers and people who work in retail and retail supply chains beyond Walmart
• Enhancing the sustainability of our operations and product supply chains for people and the planet
• Building strong communities where we operate

Doing this work happens to be very sound business. The most important asset a business has is the trust and respect of customers and other stakeholders. By tackling large issues and being transparent, a business can earn that trust, and be in a much better position than a company that focuses only on the short term. Customers love when a company does work for them, sourcing a wide variety of products that are produced sustainably.

By doing the right thing, a business is setting itself up for a solid and successful future. And by focusing not just on price — but on “cost” as well — a business is tackling social and environmental sustainability at the root. That’s what you’ll see us lean into further this year and in the years ahead.

Thanks for your interest in Walmart — and please continue to work with us, tell us what you think and help us do even better.

Doug McMillon
President and Chief Executive Officer — Wal-Mart Stores, Inc.