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Will Walmart's Drive Toward Sustainability Work?

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Walmart, the world's largest retailer, announced this week that they are planning to put green/sustainability labeling on all of their products within the next five years, stating:

Walmart today announced plans to develop a worldwide sustainable product index during a meeting with 1,500 of its suppliers, associates and sustainability leaders at its home office. The index will establish a single source of data for evaluating the sustainability of products..

The company will ask their suppliers (all their suppliers) to answer fifteen questions:

  1. Have you measured your corporate greenhouse gas emissions?
  2. Have you opted to report your greenhouse gas emissions to the Carbon Disclosure Project (CDP)?
  3. What are your total greenhouse gas emissions reported in your most recently completed report?
  4. Have you set publicly available greenhouse gas reduction targets? If yes, what are those targets?
  5. If measured, please report total amount of solid waste generated from the facilities that produce your product(s) for Walmart Inc for the most recent year measured.
  6. Have you set publicly available solid waste reduction targets? If yes, what are those targets?
  7. If measured, please report total water use from the facilities that produce your product(s) for Walmart Inc for the most recent year measured.
  8. Have you set publicly available water use reduction targets? If yes, what are those targets?
  9. Have you established publicly available sustainability purchasing guidelines for your direct suppliers that address issues such as environmental compliance, employment practices, and product/ingredient safety?
  10. Have you obtained 3rd party certifications for any of the products that you sell to Walmart? If so, from the list of certifications below, please select those for which any of your products are, or utilize materials that are, currently certified.
  11. Do you know the location of 100% of the facilities that produce your product(s)?
  12. Before beginning a business relationship with a manufacturing facility, do you evaluate their quality of production and capacity for production?
  13. Do you have a process for managing social compliance at the manufacturing level?
  14. Do you work with your supply base to resolve issues found during social compliance evaluations and also document specific corrections and improvements?
  15. Do you invest in community development activities in the markets you source from and/or operate within?

The company will apply a rating to the products based on an algorithm yet to be announced. It is unclear how they will determine the accuracy of the replies -- what oversight, if any, will be instituted and applied. Also yet to be announced will be how that rating will be displayed. It may be as simple as a green tag or as complicated as a link on the product to a customer's smart phone which will then give the customer detailed information about the product's sustainability.

Environmental groups laud this attempt to go green at the corporate level and point out that, as the world's largest retailer, Walmart may be best positioned to pull this off. Corporate associations and academics have raised concern of increased costs. Walmart's spokesman disagrees and says that with less packaging there will be less cost (concentrated detergent is cited as an example).

"Nobody else could pull this off," said Michelle Harvey at Environmental Defense Fund, one of the groups involved in the creation of the index.

The question, of course, is whether even Walmart can make it happen.

"I think it's going to be a lot of work for a lot of people," said Jon Johnson, a professor in the Sam M. Walton College of Business at the University of Arkansas, whom the company asked to help create the index, along with Jay Golden at Arizona State University. "But obviously we're optimistic about the prospects."

The idea of an index, a single sustainability standard across the corporate world that companies and suppliers could follow raises the ante for other large corporate retailers (i.e. Costco, Target, Kmart, etc) to participate or loose out on environmentally conscious consumers. It also puts pressure on manufacturers and suppliers of all stripes to change their business model to the index or lose out as environmentally conscious consumers choose other products over theirs.

Walmart is projecting a five year span to (figure out how to) implement this. It will be interesting to see if the sheer size and influence of the 'big box' retailer can make this a tipping point toward sustainability.

Cross-posted on Green Office Blog. More on this topic at The Environmentalist.

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