Wal-Mart to Measure Sustainability of its Products
July 18th, 2009
Wal-Mart is known for its rock-bottom prices, but customers soon will also be able to choose what products to buy on the basis of their social and environmental impacts – or at least that is the idea, according to the company. Wal-Mart announced today that it is launching a Sustainability Index – an electronic indexing system that will provide information about a product’s carbon footprint, the gallons of water used to create it, the air pollution left in its wake and social impacts related to production.
The company has recruited scholars, suppliers, and environmental groups to help it create the index – a universal rating system that scores products based on how environmentally and socially sustainable they are over the course of their lives. The goal is to have other retailers adopt the indexing system, which will be created over the next five years.
Wal-Mart has developed 15 questions that it will ask its US suppliers – overseas firms come later. The company will use the results of this questionnaire to assess companies – not products, at least at this point. The company plans to develop more sector-specific questions – say, for food products, electronics or clothing – in phase two of the index’s development. Eventually, the company hopes that the index will address individual products, but it is not an eco-labeling scheme and in any case, a product focus is off in the future.
The Index is a way to provide transparency about companies, allowing the comparison of companies with one another on performance. The information will be one of many factors used by Wal-Mart to assess companies. And, while it may make a difference – all other things being equal – the index will not insure a company it deals with is producing its produces sustainably.
The questions also don’t mention a number of important sustainability issues: whether toxic materials are used in the manufacturing process or are present in the products themselves. The energy efficiency of products or their recyclability, as well as the question of ultimate disposal are also not addressed.
But perhaps these issues will be included as the Index is developed. One of the reasons for the company’s concern is the concern – especially among younger consumers – about environmental impacts of consumption. A big groundswell of support for a robust index – accompanied with specific suggestions – may just make a difference.
The Oblates participate in a dialog with Wal-Mart on sustainability issues through the Interfaith Center on Corporate Responsibility. The company has taken several major steps to make its massive operation more environmentally friendly, including significantly reducing packaging, cutting energy use in its stores, and selling only concentrated laundry detergent that uses 50 percent less water in its manufacture.