Walmart Inc. (NYSE:WMT) 2023 Goldman Sachs Global Sustainability Forum Call September 27, 2023 1:00 PM ET

Company Participants

Kathleen McLaughlin - Executive Vice President and Chief Sustainability Officer

Conference Call Participants

Kate McShane - Goldman Sachs

Kate McShane

Hello, everyone. We're going to get started. My name is Kate McShane. I cover the hardlines and broadlines for GIR at Goldman Sachs, and we're very happy to be here with Kathleen McLaughlin, EVP and Chief Sustainability Officer and President of the Walmart Foundation.

Kathleen is an Executive Vice President and Chief Sustainability Officer for Walmart and President of the Walmart Foundation. She's responsible for programs that help Walmart create opportunity through jobs and sourcing, advance the sustainability of supply chains, foster diversity, equity and inclusion and build inclusive and resilient communities.

Before joining Walmart in 2013, she spent more than 20 years with a global consulting firm McKinsey & Company. Kathleen serves on Boards of the Council On Foundations, the World Wildlife Fund, the World Resources Institute and is an adviser to The Nature Conservancy's Impact and Financial Markets team.

Kathleen, thank you so much for joining us today.

Kathleen McLaughlin

Great to be here.

Question-and-Answer Session

Q - Kate McShane

I wondered if we could maybe start with you taking us through Walmart's shared value initiatives and how sustainable investors in general should measure efficacy and success?

Kathleen McLaughlin

Great. Yes, sure. Well, it's wonderful to see all of you today. Yes, the way that we tackle I guess what's come to be known as ESG is very much from a shared value perspective and it's been something we've been at for, gosh, decades now at Walmart. And really, the idea is for us to deliver on our mission, which is save money, live better, help our customers do that. It depends not only on our ability to bring affordable products to people through retail stores, through online channels, delivery, pickup, et cetera. So access affordability of products, of services, that's the core part of our mission. But we want to do it in a way that actually creates value for stakeholders at that intersection of their concerns and our business. And we view that as really essential to our long-term business success. It's a business strategy with some people calling shared value. So for us, there are four key themes that fall under that. The first one is economic opportunity for our own people for suppliers. As a retailer, we have a couple of really important assets in a very large job base and set a career path and through our purchase orders. So how do we translate that into opportunity for people in a way that also gets us stronger, more productive talent force and also great surety of supply of wonderful products that we can provide our customers, that's kind of the first theme. The second key theme is around enhancing sustainability of our retail operations and our supply chain. And again, business benefits there are obvious, new revenue streams, cost structure, managed risk advantage in terms of quality of products and innovation and so on. And then in terms of societal issues, big priorities around de-carbonization, climate change emissions, nature, increasingly important, especially for a retailer like Walmart. We sell so many products that come from nature, forest, grasslands, freshwater ways, land and so on. Waste and circularity. So again, as a big retailer, how do we shift consumption toward a more circular approach, not only of packaging and things like that, but the materials themselves and products. And then people who work in supply chains. So obviously, respect for human rights and addressing some of the egregious risk to human rights in chains that are quite systemic in nature, deep-seated and so on, but how can we use supply chains to create opportunity for people in real-life and livelihoods around the world. So sustainability is a second big theme. Third big theme is around resilience of communities. You mentioned that in the intro. We are physically present in 10,000 places, so we do have a very large e-commerce business. We're an omni company. In many ways, we become a technology company, but that physical presence is really important. And so we live and work in these places, how do we show up and use our assets to help strengthen communities, whether it's disaster preparedness or obviously being present in terms of taxes and jobs and being able to provide products and services but these other strengths that we can bring to make communities stronger. And then the last big theme for us is around ethics and integrity as a multinational business, role modeling standards around corporate governance, digital citizenship, again, as a tech company, how we use technology, AI and so on. So various principles and access and being a force for good through technology, human rights, all the kind of topics you'd normally think of under governance in terms of compliance and ethics. So those are our four big themes. And fair value notion means for any one of those climate change, racial equity, digital citizenship, we start with what's the goal from a business perspective and a societal or stakeholder perspective. And then what are the strategies that help us achieve those outcomes, the metrics and KPIs we're using and then we disclose all of that. And I'd invite you if you haven't seen our disclosures check out on our corporate website, each of the issue areas, we have a pretty detailed brief that goes into this. And we also discussed the challenges and pain points making progress on them. So that's the underlying philosophy that we bring to it. And I think one of the more exciting things for me in this whole arena the last few years has been a shift from maybe in the past 15 years ago, people taking more of a, let's call it, corporate social responsibility mind-set to these things like a CSR and a side project mentality to something that's been more, oh, no, actually, these things matter for business. Let's do some special projects you know and they'll be at that intersection and we'll report that to now a much more integrated approach where these things are just part of the business strategy. And I can give some examples as we talk through.

Kate McShane

Really helpful. I thought maybe we could go from there and talk about key areas of priority. You have an impact thesis to help define your goals and your strategy. So maybe we can start with climate change. First, where Walmart's goal is to have zero emissions from Walmart operations by 2040 without offsets. Can you talk about how you see the next five years in this journey, where you see green premiums and innovation or policy support that can help you advance this mission?

Kathleen McLaughlin

Yes. I mean, that's a good example of something that is quite central to our business success. So that goal to get to zero emissions by 2040 in our operations. It was really informed by a deeper understanding 10, 15, 20 years ago, even about the impact of climate change. And obviously, as a pervasive, secular risk that is affecting every part of society, it matters at many levels for business, for our customers, for our communities. We see it even recently coming through in several forms. So first of all, heat events and polar vortex events, you kind of have both ends of the spectrum that affect communities and neighborhoods and people living day-to-day and what their living conditions are like. Those are our customers. Those are our associates. A second impact that we experience is in supply chain in terms of surety of supply and shift in yields and quality of commodities just based on, again, weather effects and so on. So those are some near and present things. And of course you roll the tape forward and say, what can we expect? It's more of that plus disaster events and the very real cost that brings to customers, suppliers, associates, communities and so on. So for many reasons, it matters for business, and we became the first retailer to set an approved science-based target for emissions reduction across all three scopes back in 2016, 2017. So in our Scope 1 and 2, we did commit to zero without offsets. Why? Because we think our type of emissions are addressable. It does not mean we have the answers to some of them. So for us, it's electricity. That's the lion's share of our emissions in Scope 1 and 2. It's refrigeration that's technically possible, but incredibly complex at our scale to convert to low global warming potential refrigerants in our entire fleet globally. That's not going to be easy, and we're still experimenting with different technologies. But we think it's doable. And by 2040, we need to figure out how to get there. On-site fuels, that's a little bit easier to address. So we're just re-chickening gas-fired cookers, things like that, generators, transportation. So that's one where things like yard trucks, last-mile delivery, we've been able to convert those. I think it was our commitment, our purchase order to Ford or to GM for like 1,000 trucks has given some of those OEMs confidence to make bigger plays in EV. So that's exciting. The tough one there is our heavy tractor where we don't have the technology today given our loads and the distances that we run those trucks. Today's battery technology, EV that's not going to do it. So there needs to be innovation there. Or is it fuel cells or what? So we're kind of experimenting in that area, too. So we have the business initiatives, the CapEx, the OpEx, things in flight. We're working towards 2040. It's highly integrated into, I mean, it is part of our core business, our core operations. And the benefits are around energy security, energy affordability and new value-creating businesses for us, too. One of the things I'm most excited about in the portfolio is EV charging expansion. So we already have a pretty robust network at Walmart, over 250 sites across the country, but we've committed to thousands more, makes perfect sense for us. They're going to be fast chargers. So it will be great and attractive for customers. They come and plug in. And even if it takes 15, 20 minutes, they can come into the store and pick up a few groceries. So it makes a lot of sense for us to do this. And it's a natural extension of our automotive care business. We have automotive service centers already, et cetera. So this is a nice build out. Another one, on-site generation. We have one of the largest on-site fleets, I think, in the country of solar, utilizing our rooftops. There's a lot of untapped real estate that we have. That's a big advantage for Walmart. We can leverage that. And again, if you think about energy security, energy affordability, it makes sense for us to do that. Tax equity deals, community solar, those are also really interesting, allow us to provide affordable, clean energy added to the grid for lower-income communities, that's a bonus as well. So these are core business strategies that are run deep in our operations unit. They don't report direct to me. They're part of our operations and you know it's sort of dotted line to me and we run it in this really integrated kind of way. So that's Scope 1 and 2. Scope 3. So when we set our target back in 2016, '17. At that point, we didn't even know how to measure Scope 3 emissions. And even CDP, Environmental Defense Fund, close partners didn't have math on this either. So we literally said, okay, we think in retail, Scope 3 is 20 times Scope 1 and 2. So we'll take our 20 million metric tons from Scope 1 and 2 and times it by 20 and okay, we get 400, let's assume that's our footprint. Now we have a better sense of what the footprint is. And 400 is probably not far off if you consider all the GHG categories. But we started with that, and we said, look, our focus ought to be on immediate action to decarbonize supply chain. That's what we want to get to. So let's not worry about trying to measure the entire footprint. Let's focus on the major concentrations of emissions in our kind of business and engage suppliers to get at it. So here we are, six years later, and we've had over 5,000 suppliers engaged in this initiative that we call Project Gigaton because the goal we set was a gigaton of avoidance by 2030 and that would represent science-based progress on what we thought our Scope 3 was at the time. So over 5,000 suppliers engaged and to date, 750 million metric tons of emissions avoided, sequestered, removed, which is more than on track. And the projects are in energy, transportation, product design, packaging, waste reduction and the nature. So regenerative agriculture practices, animal, ag and crops and then also avoidance of deforestation and conversion. And so what we do is help our suppliers that targets in a way that is science-based make progress on initiatives by sharing best practices, supporting with playbooks, summits, knowledge exchange, advice. We also then provide a series of resources. So for example, with Schneider Electric, we have a deal for PPAs. We call it a Gigaton PPA, where suppliers can get access to renewable energy for their factories. And so for example Levi Strauss is part of that, Amy's Kitchen you know suppliers like this, Smucker's. So resources, and then we helped them report. So we've got an integration with CDP. We try to make it really easy and kind of provide webinars and teaching to folks on how to do this sort of work. And that 5,200 suppliers, they represent over 70% of our assortment. And I think the progress has been great. I have to say our challenge now as we kind of go into a world where there's more expectation of reporting total footprint is how do we connect these very real projects in very real parts of the supply chain with very real evidence of progress and so on to a footprinting like a comprehensive footprinting analysis. It's a different set of numbers and assumptions. For a retailer like us, we have 400 million items, different SKUs, like different items that we sell between in-person, online, at least that many. There isn't a data set about the comprehensive Scope 3 of every single one of those items, especially when you consider how customers use those items. So there's broad strokes, industry average data available on many of the components, but at a sector level, not item like this cap versus this bottle versus my shirt at that level of detail. And so I think our challenge is going to be how do we make progress as a sector on measuring a comprehensive footprint and getting better data and finding ways to store it and validate it and everything else without completely distracting from the exercise of decarbonizing the heavy concentrations of emissions. Like we all know about the 80/20 rule. In emissions, it's like 99/1. Like emissions are heavily concentrated in certain stages of the supply chain, it makes more sense to focus innovation on those. We know what those are top down. We don't need to measure every item to know it's beef, it's dairy, it's electronic. We know what they are. So we want to keep making progress on those things with real projects yet for reporting purposes, having repeatable, here's our formula. We updated every year. It's based on industry average. Those things aren't going to connect. So how do we make your job, guys in the audience your job easier when companies are giving all this data, like how do you interpret it? And how do you know who's doing a good job, what progress really looks like in this reporting environment, it's going to be a big challenge.

Kate McShane

That's extremely helpful and a lot to digest. In addition to focused on the climate change and you mentioned your supplier engagement Project Gigaton. Can we maybe talk a little bit about human capital next in terms of your outlook for labor demand, cost trends. And how do your up-skilling training retention initiatives, increase productivity?

Kathleen McLaughlin

Yes. Well, human capital is another priority issue for us. For obvious reasons, we employ a couple of million people around the world and the engagement and talent level of our people makes all the difference in terms of us being able to deliver our proposition to the customer. So they're really you know couldn't be more, it's probably our number one issue is that in terms of value creation potential. So because we're in retail, if you look at the shape of our workforce and because we're really an omni retailer, we have all type of career paths. So it's not like your grandfather's retail operation. We certainly do have physical retail, bricks and mortar. So they are a path, let's say, from cashier up to or store manager, regional manager and so on, but we have technology path, health care paths, financial services path, truck drivers and transportation, HVAC technicians, I just talked about this new refrigeration that's going to require a totally different skill set of people out in the field managing equipment. So it's a lattice of opportunity. And at the same time, another feature of a retail workforce is we have a very large entry-level population. And so when we look at that and say, well, what could we do that would be of most benefit to our associates and provide the most opportunity economically for them, be great for our customer and really great for our business and communities. And it really is workforce development. That's our differentiator. So we have focused very hard on removing barriers to employment. So we do not have degree requirements for most of our jobs. We've taken them out. We want anybody to come in based on skills. And then our focus is, okay, given the individual, where are you starting and where do you want to go? What's your aspiration, whether it's in terms of type of career or professional path or compensation or whatever that may be. So then how do we help you develop the skills and the experiences that you need to succeed? So we've innovated around on-the-job training and learning. We've innovated on career paths from one place to another. I talked about that lattice. So for example, one of the programs we have now is anybody who wants to become a truck driver. We have an accelerated path to that. We need truck drivers. It's a $100,000 a year job. We can teach people the skills to do it. And so we've got people flowing into those positions. That's just one, same thing in pharmacy, same thing in coding, you pick it. And then Walmart Academy, that was something that we innovated back in 2014, '15. So that is our development program that we started focused primarily on people moving from hourly to supervisory roles and now we've rolled it across all manner of roles. Live Better University, which is free, GED, high school completion, two-year certificates, four-year degree programs, curated to be relevant for our type of jobs and from institutions with a proven track record with adult learners to get to completion. As part of that program, we look at an associate skill set and their experience, and we worked with the universities to grandfather and translate experience into degree credit. So if you've been a produce manager somewhere for 20 years, that's worth something in retail management as an example. So that's a terrific program as well. And that really, that's our focus. 75% of our managerial roles are filled by people who started as hourly. That would include like John Furner, Doug McMillan, started as hourly people. 80% of our openings we fill with internal Walmart people because that's what we're trying to do is kind of create these development paths. So our value proposition for associates is to be competitive on wages. If you look community per community, job per job versus the grocers, the other kind of multi-category players, club format, Sam's Club to club format, our warehouse jobs to warehouse competitors, region for region, job for job, we want to be competitive on the wages. So we're distinctive on the benefits. We think we're distinctive on, for example, health care, physical care, mental care, Harvard Business School has written case studies on our centers of excellence programs, where anybody who has a knee replacement will send them to Mayo Clinic with a caregiver pay for that. It's worth it from a business point of view because your complications, quicker recovery time back on the job quicker, right? So we're trying to innovate in ways that make sense for the business and for the person. And then our mental health services are interesting and innovative as well. But then really be distinctive on the advancement and up-skilling. And I just found out today Fortune Magazine has named us number three on their Change the World list this year for this for advancement, for development and advancement of our workforce because of the innovation that we're doing around up-skilling with the associate population. We also, through the foundation, have a companion program and most of our issues work this way. So there's our business initiatives, but then through philanthropy, we have strategies that allow us to extend the social impact of what we're doing to our business by additional investments that accelerate improvement in broader ecosystem. So on workforce development, we've been working for 10 years now in innovations, in adult learning, innovations and credentialing and badging, working with state governments, workforce boards, universities, other education providers and employers to create systems of skills-based hiring, development, advancement to create a stronger ecosystem that really is based on skills instead of did you get your four-year degree somewhere and I won't hire you unless you have the bachelors. We're really trying to make it much more fungible and much more dynamic for people of course.

Kate McShane

This might seem like it wouldn't fall under human capital, but I think it does and it's an issue that we talk a lot about being retail analysts is the current issue of shrink. And it's probably one of the more impactful issues that goes to the heart of maximizing value, minimizing risk to the community, customers and employees. So could you maybe talk a little bit about trends Walmart is seeing when it comes to this view and what the company is doing to combat the potential risk and impact those?

Kathleen McLaughlin

I mean I think we've all been reading the news in different communities across the country. I think it's been a real challenge, and it feels like the pandemic did not help with that just the quality of life and -- coming out of that. I think like other retailers we've seen it, we've been able to manage it to a large extent so far. All the normal things that a retailer would do, right? So there's certain high-value merchandise in certain places, we need to lock it up. Certain communities, we've got more of a presence visible police presence that's not even necessarily something new like we've always had asset protection. There's a lot more focus in retail these days on skills for asset protection, people around de-escalating situations and how do you manage things. And obviously all of this in a way that just -- it feels like a safe, enjoyable shopping environment for customers. You don't want to feel like you're coming into a place that's being harmed here or whatever. So yes, it's a balancing act. But I think so far, we've been able to manage it pretty well across our network.

Kate McShane

Our next question is just about getting things done in a more politicized environment. Just with the bifurcation in views, not just among election officials, but also just the broader population. How can companies like Walmart successfully navigate advancing stakeholder value by bringing people together and how can this best be done by mitigating risks of negative repercussions?

Kathleen McLaughlin

Yes. There's a lot of division. And I think, especially for a business like ours, questions stakeholders are asking, I would say, on both ends of the political spectrum. On the one hand, you have people saying, okay, prove to me that the things you're doing around climate change, around human rights, human capital, any of these topics, are they real? Is it green-washing or is it real stuff that you're doing? Prove it to me. And so this desire to understand the strategies, have metrics, be proving the impact, and that's really important. And then we have other folks in inside saying, well, listen, you're supposed to be a business. Are you off on a frolic of your own? Is it like Kathleen cares about this issue, and therefore, she's going to get Walmart to work on it? What are you doing? And the answer is no. Like we have this analysis where we're going through issues based on the request of our customers, of our own employees, of communities, policymakers, suppliers, et cetera. And then we apply a litmus test, three things that I've alluded to. So the first is, okay, is this relevant for business, for our business? Is there a business reason that we should be engaging in this? Second is stakeholder sentiment, how do people feel about it. And if it's a unanimous, everyone agrees, this is something we ought to do. That's one thing. If there's division, we have to engage. We have to understand what's the source of that and what's a responsible way for us to address that but still advances the business interest. It keeps in mind how our people who make up our company. We would not have a company without customers and associates and so on and how they feel about that. And then the third is our engagement in that issue going to make the outcome better or worse because sometimes us getting involved in something, those will not going to help anything. So we think about that, too. And so far, what we found is if we are authentic and able to explain why we're taking an action and how it is relevant for us as a business that it matters to our customers or associates or suppliers or our bottom line. And we have capabilities and we can show progress and it's real. So far, that's been like our stakeholders are saying, okay, that kind of makes sense. It's a lot harder than maybe 10, 20 years ago, people just launched a new initiative, and it was fine. Like you do have to work through that. But maybe it's better because maybe it means we have an agenda that is more focused on meaningful topics with real impact that really is helping people. That's how we're thinking about it.

Kate McShane

And that leads us into the disclosure question, just in terms of how can investors best measure Walmart's business exposure to sustainable goals, maybe within operating income, capital investment? And how can investors best measure the investment and return on investment from these investments?

Kathleen McLaughlin

Yes. So the kinds of things I've been talking about our investment in wages and workforce development, what we're doing around renewable energy, refrigeration conversions, all of that. It is totally part and parcel of our long-range planning process, our annual operating planning process. And it's baked in to the guidance that we give all of you guys about where we're going to go with our earnings and our returns and our comp sales and so on. And so it's in there. So you can feel rest assure that what we're guiding, like we've taken care of the things I just talked about. It's actually hard for me to parse out, like if you said to me, oh, show me all the money you spent on sustainable or initiatives related to economic opportunity, I don't know that I'd be able to do that because of our shared value approach. I mean like we're making an investment in EV charging. It makes sense for our customer, and it's going to be growth for us. Is that a sustainability thing? I don't know, I guess, philosophically, it becomes hard to kind of parse that out. So I'd say the first thing is just for us is very integrated, and it's baked into hitting our numbers. The second thing I'd say is in terms of measuring who is good or not on these topics of climate change or racial equity or digital citizenship fairness, et cetera the work that you guys and the analysts in the room need to do is at the same level as it would be analyzing any company for their kind of core business. This is not -- there's no easy button. There's no like, oh, let's see. Their revenue went up. That means we should buy them. It doesn't work that way. And it's the same thing for these topics. In fact, maybe it's even more complicated to say, well, what is a good expectation on emissions and is Walmart doing what they should be in supply chains. And what I worry about a little bit is because there isn't great data out there sometimes, like our answer is, okay, we're going to disclose. We're going to be that we'll try to lead on disclosure. We would love our competitors to disclose the way we do. We would ask you to ask them to do that. We think more information is better as long as it's remain relevant, focused on the things that matter. What I worry about, though, is some of the push to you know as I was mentioning before, like on emissions, Scope 3, report your whole footprint. It's a good thing to work. We need to do that like everybody, we need to get there, but we're probably decades away from having excellent information at that level that you can compare from one item to another, let alone one company to another. So that's one challenge. I don't know how decision-useful that's going to be. And our numbers go up or down as methodologies change, using industry spend method, unit method, it doesn't actually necessarily reflect the emissions change. And that's why we do this detailed disclosure to try to explain that part. I don't think you'd ever find that in the 10-K. It's too complicated. So that's one. And then the second is things like MSCI, Sustainalytics, those kind of ratings, they're highly susceptible to manipulation by activists or people who are launching PR campaigns or have some other points they're trying to make on whatever their topic is, whether it's fishing gear or labor issues or what have you. And we're a great example of that. If you look at some of our scores of Sustainalytics or MSCI, you would see high risk on this. And then you say, well, what's the basis for that? Like human capital. Let's look at wage rates comparatively. Let's look at benefits. Let's look at advancement rates. Let's look at development. Let's look at prosperity like the actual facts of the case, don't bear out. And what you come to realize is a lot of it is based on like rep risk and broad social media sentiment and so on. And there are people who have kind of PR campaigns going at any given time on their issue, which then they're targeting certain retailers often we're one of them just because we're a big retailer and you're going to get more airtime targeting a big company versus a small one. So that's a challenge for us because we spend a lot of time then sort of litigating every little you know why is this considered high risk, here's the actual facts. And I can't imagine it makes your guys this job easier either. So that's a challenge.

Kate McShane

Maybe if we could just focus our last question because we're getting close to the end of our conversation. This has been fascinating. It's gone very fast. Walmart International represents about 20% of the enterprise, 25% of the square footage, what are you seeing internationally from a customer demand perspective? And what is the ease in deploying your sustainable goals?

Kathleen McLaughlin

It's interesting because in our markets like Mexico, India, Canada, Central America, the average citizen, the average kind of customer is still much more tuned in to some of the things we're talking about now. Whether it's climate change, nature, waste issues, human capital, human rights, it's just more natural. And we actually did some research recently just to understand what's the awareness or perception of these issues and the scores in, for example, Costa Rica through the roof, in fact, when I visit colleagues in Costa Rica, they're presenting to me on regeneration and they're like things about, well, when we started Hortifruti 40 years ago, we worked on the vegetables, here's what we learned that they're so far ahead. And you see it even in some of the things like the Mexican taxonomy that just come out. India is taking a look at something similar. Canada on the international stage has really been leading on things like plastics and nature. They're one of the few developed countries that has quite a big portfolio of these conservation zones, what people call other effective conservation management zones. So in some ways, there's more receptivity to it. And our goals for the most part are global, right? So our emission goal is global, our sourcing goals around nature, packaging and so on, those are global and our international colleagues are making great progress. Where I think it's going to be trickier over time is in some of the things that rely on the evolution of the grid. So in some markets, in terms of renewable energy versus coal or what have you, it's just going to be a different time line for progression. And that's going to be a challenge. But in terms of the psyche and the receptivity of associates and customers in some of these places, I'd say they're out ahead.

Kate McShane

That's great. I said that was going to be my last question. But we actually have a couple of more minutes. I'll sneak another one. And just with regards to some of the macro and the policy initiatives such as the Inflation Reduction Act and the bipartisan infrastructure bill and others impacting your business. How do you see those initiatives? And what, if any, impact is higher interest rates may be having to your capital allocation and your customer preference?

Kathleen McLaughlin

Well, we were supporters of the IRA and the infrastructure bill because it puts policy emphasis on incentives that are going to help accelerate the kind of shifts that we're leaning into and that we think will benefit our customers. And that's always our starting point on policy is what's the implication for customer there for our business. And those are the kind of things that we'll get behind. We do a fair amount of work as well through consortia and working with other companies and trying to make cases there around some of these things. And it's not just on that topic, it would be things like food systems, food security, health care, digital citizenship or guidelines any of those topics. Our starting point is always, okay, what's that policy? What's it going to do to the broader ecosystem and how is that going to help shift things in favor of what we think is in service of the customer now.

Kate McShane

With that we will end our fireside chat. Thank you so much for joining us, Kathleen. Thank you, everyone.

Kathleen McLaughlin

Thank you.