Walmart Launches Sustainability Index
Few companies have the resources, capabilities, or necessary influence to elicit widespread environmental change. With bottom lines, deadlines, and ever-changing customer demands, sustainability concerns are often placed on a back burner, or if implemented internally, do not reach very far outside the organization. Although many mission statements include green components, few companies have taken definitive action to put their suppliers to work on achieving sustainability goals.
Last July the largest retailer in the world, Walmart, unveiled a plan that could become the new standard surpassing the vague and simple sustainability objectives of the past. The corporation announced the development and implementation of a Sustainability Index. The purpose seems rather simple: To measure the sustainability of every product it sells in addition to being 100 % energy efficient and reducing waste. Simple enough?
Phase One of the Sustainability Index will require Walmart suppliers to dig deep into the sustainability of their products, analyzing all aspects of each product and measuring its environmental footprint. To help suppliers embark on this journey, Walmart designed a 15-question assessment to evaluate supplier energy efficiency. The survey questions focus on four main themes: energy and climate, material efficiency, people and community, and natural resources. Top-tier suppliers were asked to complete the survey by October of 2009, while smaller suppliers were given longer timelines.
The second phase of the Index is the Lifecycle Analysis Database. It involves the creation of a consortium of universities to collaborate with key players, including suppliers, retailers, non-governmental organizations, and government officials. The objective is to establish a global database of product information, including commodity chains and cradle-to-grave—or, hopefully cradle-to-cradle—lifecycles. While Walmart provided the initial funding and resources for the consortium, it is not the company’s intention to administer it. That task will be shared by the University of Arkansas and Arizona State University.
The third phase of the Index is arguably the most important when words turn into actions. When the two phases are completed, the Sustainability Index should function as a valuable resource for customers, providing them with the necessary information to consume in a more sustainable way.
If all goes according to plan, this system will allow both wholesale purchasers (like Walmart) and retail purchasers to drive advances in sustainability by suppliers and manufacturers.