Setting Standards: Walmart Makes A Move

The media was abuzz with industry-changing news from retail giant Walmart this week. The company has begun the tricky process of establishing a worldwide “sustainable product index” for its suppliers, with the goal of eventually displaying this on all products it carries. The concept is not new – other companies such as Timberland and Nike have already created their own product evaluation systems – but the goal is to develop the first comprehensive source of data for evaluating sustainability across all products. In the final phase of the process, the company intends to equip consumers with a simple rating system that will disclose product sustainability, allowing consumers to make more informed purchase decisions. As Walmart CEO Mike Duke stated, the company wants to “create a new retail standard for the 21st century.”

Although the consumer-facing label will take a few years to develop, the company will begin the process by first surveying its more than 100,000 suppliers on current practices using a 15 question survey focused on energy and climate, material efficiency, natural resources and people and community. Walmart chief merchandising officer John Fleming explained, “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.” Following this, Walmart will collaborate with several universities, governments, suppliers and other retailers to develop a global sustainability index.

Suppliers whose products are currently on Walmart shelves will no doubt be scrambling to shine light on their sustainability initiatives. This will be an exciting opportunity for those companies already working to reduce their impacts to display their environmental stewardship. Those not already operating with the environment and society in mind, and/or those not measuring such data, will have a lot of work to do in the coming months. And yet, the generality of Walmart’s questionnaire, which doesn’t delve into product-specific or even industry-specific nuances, just skims the sustainability surface. It leaves lots of room for interpretation, and it is not clear how – or if – Walmart will verify the data.

That said, Walmart’s vision is a worthy one and establishing a shared baseline for the industry is a monumental step indeed. The retailing giant, already credited with helping set the standard for items like concentrated laundry detergent, likely has the wherewithal to bring something this complex to life. If the rest of the retail industry joins this effort, it could be gamechanging.

 

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