Wal-Mart cranks up pressure on suppliers to deliver greener products

Wal-Mart yesterday launched a major new green initiative that will eventually see the retail giant provide sustainability rankings for all its products worldwide.

Announced at a major meeting of 1,500 of its suppliers and staff at the company's headquarters in Bentonville, Wal-Mart said the new Sustainable Product Index will aim to provide a single source of data for assessing the environmental performance of different products.

The company's president and chief executive Mike Duke said the initiative was in response to increased demand from customers for information about products' sustainability.

"Customers want products that are more efficient, that last longer and perform better," he said. "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."

The company said it will implement a three-phase plan to develop the new index, starting with a detailed survey of its supplier base of more than 100,000 firms.

Suppliers to the company will receive a 15-question survey requesting information on a range of sustainability issues, including energy use, material efficiency, and use of natural resources.

Questions include whether firms measure their carbon emissions, whether they report their carbon footprint through the Carbon Disclosure Project, and whether they have set waste-reduction targets.

"The survey will include simple but powerful questions covering familiar territory, such as the location of our suppliers’ factories, along with new areas such as water use and solid waste," said John Fleming, chief merchandising officer at Wal-Mart US. "The questions aren't complicated but we have never before systematically asked for this kind of information. The survey is a key first step towards establishing real transparency in our supply chain."

US suppliers have until the start of October to respond to the survey, while deadlines for firms in other countries will be set shortly.

The company said it will also set up a new consortium of universities to work with suppliers, retailers, NGOs and government to develop a global database of information on the life cycle of products that the answers to questionnaire can feed into.

The final phase of the initiative will see Wal-Mart collect further data on its suppliers' products and translate the product information into a sustainability rating for consumers which will allow them to quickly assess the environmental credentials of different products.

Duke also hinted that the company could seek to establish the index and the sustainability ranking as something of an industry standard, providing a wide range of firms with a means of reporting on their products' environmental credentials.

"It is not our goal to create or own this index," he said. "We want to spur the development of a common database that will allow the consortium to collect and analyse 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."

However, the initiative could put the company in competition with the UK's Carbon Trust, which has pioneered its own carbon footprinting methodology which is becoming increasingly popular as a means of reporting on consumer products' embedded carbon emissions.