Last week
I received the following from Walmart that is
self-explanatory:
Walmart
Announces Sustainable Product Index
Index
will drive higher quality, lower costs, and measure sustainability of products
for first time
July 16,
2009—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.
“Customers
want products that are more efficient, that last longer, and perform better,”
said Mike Duke, Walmart’s president and CEO. “And increasingly they want
information about the entire life cycle of a product so they can feel good about
buying it. They want to know that the materials in the product are safe, that it
was made well and that it was produced in a responsible
way.
“We do
not see this as a trend that will fade. Higher customer expectations are a
permanent part of the future,” Duke continued. “At Walmart, we’re working to
make sustainability sustainable, so that it’s a priority in good times and in
the tough times. An important part of that is developing the tools to help
enable sustainable consumption.”
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 [see below] 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 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 US. “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.”
Fleming
also said the company will ask its top-tier US suppliers to complete the survey
by Oct. 1. Outside the United States, the company will develop timelines on a
country-by-country basis for suppliers to complete the
survey.
As a
second step, the company is helping create 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—from raw materials
to disposal. Walmart has provided the initial funding for the Sustainability
Index Consortium, and invited all retailers and suppliers to
contribute.
The
company will also partner with one or more leading technology companies to
create an open platform that will power the index.
But according to Duke, the initiative
doesn’t stop there. In his address to shareholders, he announced a third element
to the plan:
Let me say this clearly. It is not
our goal to create or own this Index. We want to spur the development of a
common database 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.
It will shift us from traditional
retail thinking that is centered around the things that we know we can
control….like transportation, packaging and sales…to the invisible impacts on
the environment. This will give us a much deeper understanding of the
opportunities to making consumption more sustainable.
The third and ultimate step of the
Index is to translate the information stored in the database into a simple tool
that informs consumers about the sustainability of
products.
This will provide customers with the
transparency into the quality and history of products that they don’t have
today. It will help put them in control and consume in a more sustainable
way.
The Question
is…
Will this affect sustainability as it
applies to solid waste management, as the news release suggests, or is the claim
hyperbole?
I have my own thoughts on this, but
rather than muddy the waters, I’m going to hold them in abeyance until next
week. I want to know (1) what you think about the plan itself and (2) your
thoughts on the following questions Walmart is posing in its
survey.
Sustainability
Product Index: 15 Questions for Suppliers
Energy
and Climate: Reducing Energy Costs and Greenhouse Gas
Emissions
Have you
measured your corporate greenhouse gas emissions?
Have you
opted to report your greenhouse gas emissions to the Carbon Disclosure Project
(CDP)?
What is
your total annual greenhouse gas emissions reported in the most recent year
measured?
Have you
set publicly available greenhouse gas reduction targets? If yes, what are those
targets?
Material
Efficiency: Reducing Waste and Enhancing Quality
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.
Have you
set publicly available solid waste reduction targets? If yes, what are those
targets?
If
measured, please report total water use from facilities that produce your
product(s) for Walmart for the most recent year measured.
Have you
set publicly available water use reduction targets? If yes, what are those
targets?
Natural
Resources: Producing High-Quality, Responsibly Sourced Raw
Materials
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?
Have you
obtained third-party certifications for any of the products that you sell to
Walmart?
People
and Community: Ensuring Responsible and Ethical
Production
Do you
know the location of 100% of the facilities that produce your
product(s)?
Before
beginning a business relationship with a manufacturing facility, do you evaluate
the quality of, and capacity for, production?
Do you
have a process for managing social compliance at the manufacturing
level?
Do you
work with your supply base to resolve issues found during social compliance
evaluations and also document specific corrections and
improvements?
Do you
invest in community development activities in the markets you source from and/or
operate within?