In the wake of dozens of often bitter community-level controversies across the U.S. and Mexico focused on the sites selected for “mega stores,” Christian Brothers Investment Services, Inc. (CBIS) and Domini Social Investments (Domini) have issued a set of nine guidelines for major retailers to use in making decisions about store site locations, land procurement and leasing. In addition to CBIS and Domini, 20 institutional investors and mutual fund families representing $33 billion in assets under management support the guidelines.
The guidelines urge major retailers to embrace environmental stewardship; public disclosure of siting policies; advance consultation with affected communities; respect for Indigenous cultures; protection of cultural heritage; and adherence to “smart growth” practices.
While companies are encouraged to adapt the guidelines to suit their unique business models, the report strongly recommends that all retailers should have a clearly formulated, well-monitored and effective policy for assessing and mitigating social and environmental risks associated with store siting. The report also contains dozens of examples of past controversies, some positive cases, and many suggestions and resources that companies may use to minimize future conflicts.
Julie Tanner, Corporate Advocacy Coordinator for CBIS, said, “Store siting is such a central component of a retailer’s business that companies should have guidelines to avoid controversies that can endanger shareholder value. These conflicts can damage a company’s reputation and impact consumer confidence; they may also lead to financial liabilities from unforeseen events and increase legislative and legal risks.”
Some of the examples in the report include:
Community Relations: To restrict large-scale retail development, Dunkirk, Maryland, imposed a limit on the size of stores. In what some residents believed was an attempt to bypass the cap, this year Wal-Mart proposed building two stores in Dunkirk, side-by-side. While each store would meet the size limit imposed by the law, together the two buildings would exceed it by 30 percent.
Eminent Domain: In recent years, a number of private property owners have filed lawsuits or mounted protests in opposition to plans by towns and cities to seize land for sale to large retailers, including Costco, Home Depot, Target and Bed, Bath and Beyond.
Smart Growth: In late 2005, Home Depot will open a store on the site of a former concrete plant in Placerville, California. The company has restored the bed of a creek that flowed through the property, landscaped its banks with native plants, provided walkways and bridges for pedestrian access, and designed the store’s faade to blend in with the California foothill community. The company was praised for revitalizing an existing business district and for not building on the outskirts of town.
The CBIS/Domini full report, Outside the Box: Guidelines for Retail Store Siting, may be reviewed online at www.cbisonline.com and www.domini.com. The report was written by Julie Tanner, of CBIS, and Kimberly Gladman, of Domini.
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