Wal-Mart To Set Sustainability Standards

Retailer plans to set environmental standards for suppliers and give its customers a tool to rate how green products are.
Wal-Mart Thursday offered more details on the index it is developing that will measure the sustainability of all the products it sells.
The giant retailer plans to set environmental standards for suppliers and give its customers a tool to rate how green products are.

"Customers do want low prices, but not by sacrificing quality," said Wal-Mart CEO Mike Duke in remarks prepared for a meeting Thursday of 1,500 suppliers and other partners at company headquarters in Bentonville, Arkansas. "They want products that are more efficient, that last longer, and perform better. And increasingly, they want information about the entire lifecycle of a product so that 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."

Wal-Mart has over 100,000 suppliers around the world, and it will begin by asking them 15 questions about their greenhouse gas emissions, water and solid waste reduction efforts, and the practices and locations of their suppliers.

Top-tier U.S. suppliers are expected to answer these questions by October 1.

Wal-Mart will then work with universities to create a global database of information on product lifecycles, based on information from suppliers, retailers and governments, among others. The retailer does not plan to own the database, Duke said, but will make it open and available to others.

Finally, Wal-Mart will translate the data into a rating tool for customers to judge products on Wal-Mart's shelves.

Duke said Wal-Mart is concerned about the world's increasing population and decreasing natural resources. He also said businesses must become more transparent about what they do because customers are using social networks and other Internet tools to hold them accountable.

The retailer denied, to the Wall Street Journal, that Wal-Mart is trying to get ahead U.S. and worldwide environmental regulators.

One analyst said that while Wal-Mart's 15 questions to suppliers are a start, they omit critical details.

"They don't mention toxic materials used in manufacturing or in the products themselves," said Joel Makower, the executive editor of Greenbiz.com, in his blog. "They don't talk about the energy efficiency of products or their recyclability or other disposition at the end of their useful lives. One need only compare Wal-Mart's Index to Nike's Considered Index, which goes deep into product details, to see how relatively primitive it is. There are equally good examples from several other companies."

Makower, however, said Wal-Mart's plans are "a solid first effort" and "a bold move."


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