Because the expectation of compliance with our Standards for Suppliers extends throughout the supply chain, we use social, safety and environmental compliance audits to help us evaluate our suppliers’ overall compliance. These audits seek to verify that:

  • Workers are properly paid for the work they do
  • Labor is voluntary
  • Workers are not being exploited
  • Facilities comply with employment age laws and standards
  • Working hours are not excessive and are consistent with local laws and standards
  • Facilities meet health and safety laws and regulations

At Walmart, we strive to continually improve our audit program so we can better allocate our resources to higher-risk facilities and help increase overall compliance. However, we recognize that, despite our efforts, no audit program can guarantee that every facility used by every supplier is in full compliance with our Standards for Suppliers. Read more about our efforts and approach below.

Our Risk-Based Approach to Auditing

Category 1 – Lower Risk: Facilities located in Category 1 countries will not be required to complete an audit on a regular schedule. Rather, each year Walmart will select a sample of facilities to receive an audit.

Category 2 – Medium Risk: Facilities in Category 2 countries will be required to complete an audit and follow-up audits as dictated by its chosen third-party audit program.

Category 3 – Higher Risk: Same requirements as for Category 2 countries, plus new facilities in Category 3 countries will be required to receive an audit with a Green or Yellow rating prior to producing product for sale at Walmart.

We are always looking for ways to refine our risk based audit program. In addition to a facility’s country, we may look at other variables, including industry-specific risks, supplier compliance management systems and other factors as we evaluate the risk of facilities over time.

Third-Party Audit Programs

Where an audit is required, Walmart instructs its suppliers to obtain an audit from a Walmart-approved third-party social compliance audit program so that Walmart can evaluate the facility’s compliance with Walmart’s Standards for Suppliers. Walmart currently accepts audits from internationally recognized third-party programs, including:

  • Best Aquaculture Practices (BAP)
  • Business Social Compliance Initiative (BSCI)
  • Better Work
  • Electronic Industry Citizenship Coalition (EICC)
  • International Council of Toy Industries CARE
  • Sedex Members Ethical Trade Audit (SMETA)
  • Social Accountability International (SA8000)
  • Worldwide Responsible Accredited Production (WRAP)

Walmart may add or remove programs from this list from time to time or may pilot the use of new programs while evaluating whether to accept them generally. Suppliers should regularly consult Walmart’s audit policy and guidance to keep up to date on which programs are eligible for acceptance. While Walmart currently does not limit suppliers’ ability to choose an appropriate audit program, there may be situations in the future in which Walmart will recommend particular audit programs as needs and strategies dictate.

Suppliers who are required to obtain an audit must choose an eligible program, follow the directions provided by the program or authorized audit firm to obtain the audit, and send the completed audit report to Walmart. Walmart will review the audit report submitted, note issues of concern, and convey next steps.

Non-compliances and failure to remediate constitute grounds for consequences for suppliers and facilities, up to and including termination of the supplier’s business relationship with Walmart and/or a facility’s ability to produce goods for sale at Walmart. As always, Walmart reserves the right to audit or inspect a supplier’s facility at any time.

Facility Assessments

Walmart reviews third-party audit reports suppliers submit, looking for higher-risk non-compliances with Walmart’s Standards for Suppliers and issues that may be escalated for possible investigation. It will assign the audited facility a color rating based on the third-party program’s evaluation of the facility and Walmart’s own review of the report.

The ratings are provided to all suppliers using the facility. All suppliers using the facility are expected to work with the facility remediate all non-compliances identified in the report in the manner dictated by the audit program chosen. In addition to this audit program-driven remediation, Walmart expects suppliers to prioritize the remediation of higher-risk findings that would lead to the facility receiving an Orange rating, as described below.

Walmart uses color ratings as a tool to make decisions about suppliers and facilities and to promote remediation.

Below is a description of the most common facility ratings:

  • Green: Green ratings identify facilities for which Responsible Sourcing has discovered the least severe violations.
  • Yellow: Yellow ratings identify facilities which audits show to be generally compliant with the Standards, but which have failed to meet at least one important requirement.
  • Orange: Orange ratings identify facilities where Responsible Sourcing has discovered more serious violations of the Standards, but will continue to allow sourcing from that facility while the violations are remediated. Three consecutive Orange ratings may result in a Red rating, regardless of whether the facility remains in good standing with the audit program chosen.
  • Red: Red ratings identify facilities for which Responsible Sourcing has discovered violations of a nature that may make it appropriate to temporarily or permanently terminate the facility’s ability to produce product for Walmart. If a facility is assessed a Red rating, its ability to produce product for Walmart may be ended indefinitely, its production halted and/or its product refused.

Suppliers sourcing from a particular facility will be notified of the facility’s rating and any resulting actions or changes in business.


In addition to monitoring suppliers’ facilities through audits, Walmart investigates certain allegations that suppliers and their facilities have engaged in conduct that may violate the Standards for Suppliers. Responsible Sourcing receives allegations through several sources, including the Walmart Ethics hotline and inbox, anonymous tips, Walmart internal business partners, media and NGO reports, and other sources. Substantiated findings may result in consequences for suppliers, facilities, or both, up to and including termination of business with Walmart and its subsidiaries globally.