Message from Lee Scott

At Wal-Mart, we have achieved our growth in part through supply chain excellence – delivering the merchandise our customers need and want. In doing so, we draw upon a global network of suppliers and factories. When we buy merchandise, we realize that our orders touch factory workers and their communities around the world. As we reflect on the impact of our sourcing, we recognize that success goes beyond financial results alone. For that reason we continue to invest in a robust Ethical Standards Program.

This past year we increased unannounced audits and strengthened our environmental criteria. We also expanded our audit scope to include factories producing select domestic imports for Wal-Mart Canada. Today, Wal-Mart has one of the most active ethical sourcing programs in the retail industry.

In 2006, Wal-Mart's Ethical Standards auditors and third-party audit firms conducted 16,700 audits in 8,873 factories around the globe.

Even with these efforts, improvement of factory working conditions in our supply chain remains a challenge. The root causes of non-compliance are complex and resolving these issues requires a sustained effort by many stakeholders. We are working in collaboration with governments, industry peers, academics and nongovernmental organizations to address the underlying conditions that impact factory workers and the environment. We also are looking inwardly at our own processes and devising new approaches. This Report [2006 Report on Ethical Sourcing] spells out the issues we face and our strategy to meet those challenges. At Wal-Mart, we are committed to behaving in an ethical, socially responsible manner, using our resources and energy to create positive change.

Lee Scott
President and Chief Executive Officer, Wal-Mart Stores, Inc.

Note: Taken from the 2006 Report on Ethical Sourcing