Wal-Marts carefully parsed progress report shies away from straight talk, says reporting expert Kathee Rebernak. Here are six ways the retail giant can improve its transparency track record.

Wal-Marts inaugural sustainability report, released last month, is full to bursting with facts and figures that highlight the companys vast size and scope. Wal-Mart is, after all, the worlds largest retailer; the single largest purchaser of organic cotton; and the largest consumer of electric power in the United States (among other distinctions). The company misses no opportunity to mention that its sheer scale means that even one small change in company operations could have an enormous impact across industries and the global supply chain.

A sustainable Wal-Mart, the report seems to say, begets a sustainable world.

Readers of the report will no doubt be left with the impression that Wal-Mart does indeed care about making its business more sustainable. Its Sustainable Value Networks, multidisciplinary groups of academics, consultants, regulators, and managers, each focus on a specific area of operations and have implemented myriad programs designed to help the company and its suppliers operate more efficienly and sustainably. Employees are encouraged to develop their own personal sustainability projects, whereby they endeavor to recycle, conserve energy, and live healthier lives. And suppliers will presumably be all the better for having been encouraged by Wal-Mart to make their operations more sustainable. In addition, Wal-Marts decision to take responsibility for the carbon footprints of not only its suppliers but also its customers means that, as the company modestly proposes, it could have a net negative effect on absolute carbon.

And yet the report raises as many questions as it answers. Despite numerous program descriptions, goals, and statistics, careful reading reveals a surprising lack of context, undefined metrics, and goals that turn out to be meaningless. These missteps go so far beyond those typically committed by first-time reporters that they raise the question whether Wal-Marts systematic lack of clarity is intentional.

In a sense, Wal-Mart should know better, especially given the cadre of sustainability experts it has engaged in the past few years. So heres a bit of advice for future communications:

#1: Focus on key impacts.

The report showcases several initiatives whose results, taken in context, amount to a rounding error relative to the companys global impacts. A thorough materiality analysis would help Wal-Mart to identify issues of greatest concern to stakeholders, relevance to global sustainability, and overall strategic impact. Initiatives that may be illustrative of Wal-Marts potential impact but that the company has neither scaled nor intends to scale can be relegated elsewhere.

#2: Provide context.

At first glance, the reports many pages of indicators create an impressive display of progress around healthcare, diversity, and environmental performance. Unfortunately, many metrics are stated in absolute figures only; readers must get out their calculators to understand them in context. In addition, Wal-Mart obscures its performance by leaving out clear definitions for certain metrics. For example, the diversity section presents the numbers of women and minority Officials and Managers without clarifying these titles. Is an assistant store manager a manager for purposes of diversity reporting? How many women and minorities occupy executive offices?

Whats more, boldly stated goals for reducing energy consumption appear less ambitious upon closer inspection. Wal-Mart says it is committed to reducing greenhouse gas emissions by 20% in its existing stores by 2012. But 20% of what? While Wal-Mart states elsewhere in the report that it has established a 2005 baseline for reporting on its carbon footprint, the report does not clarify whether the 2005 baseline which, interestingly, does not include purchased electricity is the baseline for reducing existing store emissions. Another goal, stated on the companys website, is even murkier: By 2012 we are committed to reducing our total CO2 emissions by 25% compared to what they would be without our sustainability efforts." While such a goal may appear ambitious, it is in effect no goal at all.

Finally, the report neatly dispatches the issue of pay with the declaration that In the United States, the average hourly, full-time Associate salary for the Wal-Mart stores division is $10.76. Readers questioning Wal-Marts pay practices may wonder if this average figure factors in top executives salaries.

#3: Discuss challenges.

Effective sustainability reporting differs from effective public relations in that challenges and failings should be discussed as openly as successes. Wal-Mart seems to take a public-relations approach here, making a singular oblique reference to a failed program and using vague language that borders on prevarication to discuss goals and anticipated program results.

For example, Wal-Mart states that, While there are many positive aspects of the competition, there can be unintentional economic consequences a reference to the fact that when a Wal-Mart store enters a community, small retailers often end up closing as a result. And in discussing its diversity performance, the report fails to mention an ongoing class-action lawsuit, filed in 2001, that alleges that Wal-Mart discriminates against women with respect to pay and promotions.

#4: Acknowledge and respond to stakeholder concerns.

That Wal-Mart is silent with regard to stakeholder concerns, input, and engagement strikes a powerful blow to Wal-Marts credibility. Future reports should include stakeholder input and demonstrate the companys responsiveness to stakeholder concerns.

#5: In all things, aim for clarity.

Some discussions in Wal-Marts report verge on incomprehensibility. For example, the company states: We can play a unique role in aggregating compensation for carbon reduction and passing the value of that compensation onto our customers. One can only assume that this statement will guide Wal-Marts actions (and impacts on suppliers and customers) in the event the United States implements a cap-and-trade system for CO2 emissions. Readers should not, however, have to divine Wal-Marts intentions but should rather have them defined in clear, accessible language.

#6: Use available tools.

Wal-Mart could have avoided many of the problems described above simply by applying the ten reporting principles named and explained in the Global Reporting Initiative Sustainability Reporting Guidelines. Used by well over half of the Fortune Global 250, the GRI Guidelines can readily assist Wal-Mart in improving the quality, relevance, and reliability of its future reporting efforts.

As CEO Lee Scott says, In the end, this report is just a step. Stakeholders will be expecting strides, rather than mere steps, from Wal-Mart in the future. With its size, scale, and power to influence thousands of suppliers and millions of people the world over, Wal-Mart truly has the power to be a force for positive change. By judiciously applying the right tools, its communications efforts can be an example as well.

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Kathee Rebernak runs Framework:CR, a corporate responsibility and financial communications firm specializing in reporting.