Walmart Announces 'Audacious' Product Sustainability Index

At a company summit in Bentonville, Arkansas, the world's largest retailer announced Thursday plans and details for the most ambitious retail sustainability index in history.

During the last couple years Wal-Mart has been taking steps, some more significant than others, to become more sustainable. The company is experimenting with hybrid and biodiesel shipping trucks, stocks a line of clothing made with organic cotton, installed solar panels at many stores in California, and sells concentrated detergent only, which saves an enormous amount of resources: 400 million gallons of water, more than 95 million pounds of plastic resin and more than 125 million pounds of cardboard. Thursday's announcement by the company to develop a worldwide sustainability product index, however, is a step above its previous efforts to become more sustainable. The index will establish a single source of data for evaluating the sustainability of products. It is the first initiative of its kind in the world. Lifecycle analysis of products is not uncommon, but for a company of Walmart's size and scope, it is unheard of. According to the press release:

The company will introduce the initiative in three phases, beginning with a survey of its more than 100,000 suppliers around the world. The survey includes 15 questions that will serve as a tool for Walmart’s suppliers to evaluate their own sustainability efforts. The questions will focus on four areas: energy and climate; material efficiency; natural resources, and; people and community.

The survey will be sent to more than 100,000 suppliers around the world. Questions vary from relatively simple to complex:

- Have you measured your corporate greenhouse gas emissions?

- If measured, please report the total amount of solid waste generated from the facilities that produce your product(s) for Walmart for the most recent year measured.

- Do you know the location of 100 percent of the facilities that produce your product(s)?

"The survey will include simple but powerful questions covering familiar territory, such as the location of our suppliers' factories, along with new areas like water use and solid waste," said John Fleming, chief merchandising officer, Walmart U.S. "The questions aren't complicated but we've never before systematically asked for this kind of information. The survey is a key first step toward establishing real transparency in our supply chain." The second stage involves creating a "consortium of universities that will collaborate with suppliers, retailers, NGOs and government to develop a global database of information on the lifecycle of products." The third and final stage will be the task of translating the product information Wal-Mart receives from its suppliers into simple and meaningful information that consumers can use. The announcement was made during a live webcast from Walmart’s Sustainability Milestone Meeting in Bentonville, Arkansas. Consumers are not likely to see the "green" ratings on store shelves for at least 2-3 years. The labels will likely look similar to food labels with fat and calorie contents, but their design has not been finalized. Walmart's president and CEO Mike Duke said that the company is not seeking to create or own the sustainability index. He is hoping it can be applied universally to products from all companies, regardless of location, and be used as a kind of open source technology. “We want to spur the development of a common database," said Duke, " that will allow the consortium to collect and analyze the knowledge of the global supply chain. We think this shared database will generate opportunities to be more innovative and to improve the sustainability of products and processes.” Although United States locations plan to complete phase 1 by October 1, a timeline was not given during the webcast. Adrian Gonzalez of Logistics Viewpoints was pleased with Wal-Mart's announcement, but questioned some aspects of the initiative:

I applaud Walmart’s effort to work with various stakeholders to develop global sustainability standards and metrics. Without standards, broader adoption of sustainability practices is not possible. But as anyone who’s been involved with standards bodies knows, getting companies across different industries and geographic regions (as well as governments) to agree on anything is a very long and painful process. And when you consider that sustainability is such a politicized topic, the challenge is even greater. In my opinion, this step will take years (maybe a decade) to complete, if ever.

Many question whether Wal-Mart is pursuing sustainability initiatives only to cut costs or to truly benefit the environment. Walmart Watch writes:

There’s nothing wrong with Wal-Mart taking actions to benefit both the environment and the bottom line... However, what will happen if and when the company’s sustainability efforts become profit-neutral or its promises threaten to cost Wal-Mart money? Will Wal-Mart do the right thing for the earth--or merely the right thing for its shareholders?