Our first action will apply to all suppliers who work with us through global procurement, who are domestic importers, or who are manufacturers of Sam’s Club or Walmart private brands. We will require these suppliers to demonstrate that their factories meet specific environmental, social and quality standards. We have already started doing this, and we hope to extend the requirement to all the suppliers I mentioned within the next three to five years.
Second, we will only work with suppliers who maintain our standards throughout our relationship. So we will make certification and compliance part of our supplier agreements and ask suppliers to report to us regularly. Any supplier that fails to keep its word will be required to take prompt and serious action. If a supplier fails to improve and fix the problem, we will stop working with that supplier.
Third, we will favor -- and in some cases even pay more -- for suppliers that meet our standards and share our commitment to quality and sustainability. Paying more in the short term for quality will mean paying less in the long term as a company. Higher quality products will mean better value, fewer problems, fewer returns and greater trust with our customers. Saving people money is a commitment to our customers throughout the life of the product.
While we do these things, we will also work on more far reaching change. Many of our supplier factories have multiple customers, including multinational corporations and local retailers. Each retailer often imposes different standards and requires separate inspections. This often results in duplication of efforts without a real improvement in performance. And in some cases, it allows a competitor to have lower standards and, at times, lower costs.
In the next three years, we would like to build a very different system. We believe that there should be one framework of social and environmental standards for all major global retailers. And there should be one third party auditing system for everyone. This will ensure improvement can occur across the board on a level playing field.
The leading global retail and consumer goods network, CIES, is working on this, and we are working with them and a number of global retailers to achieve this vision. The effort is now focused on social standards, and I believe it should be expanded to environmental standards as well. Today I call on all major global retailers to join this effort. I stand ready to meet with the CEOs of our competitors and make socially and environmentally responsible sourcing a reality across the entire retail industry.
Now there has been a lot of discussion over the last few months about China’s specific role in global sourcing. Clearly, China has an important role to play. It is a major manufacturing force today, and it will be an even greater economic force in the years ahead.
Over the last few months, we have spent a lot of time talking with leaders in the Chinese government and the NGO community. As the growth of China has exploded, the environment has become an increasingly important issue in that country.
We believe we can make a major contribution here. Walmart will work with the Chinese government and NGOs to make sure suppliers comply with Chinese environmental laws and regulations. We will require our suppliers who export from China to certify that they meet key standards. We will include this certification in our supplier contracts. And we will have a mechanism in place to make sure our suppliers meet these standards throughout the term of our relationship. We commit to doing these things as quickly as possible. And we hope to see significant results within three to five years.