The Verdant 360 Blog

Professor Rosabeth Moss Kanter thinks so. Professor Kanter, who The Times of London describes as one of the “50 most powerful women in the world” holds the Ernest L. Arbuckle Professorship at Harvard Business School. In a blog post on The Harvard Business Review site, Walmart’s Environmental Game Changer, she expresses the view that by nature of it’s market clout, Walmart has “transformed green standards from nice-to-have, to must-have.”  Walmart’s announcement puts pressure on their suppliers and their competitors. In the process it moves the consumer products marketplace towards a future in which consumers can make comparative buying decisions based on the knowledge of the product’s environmental and social impact. Here is how Professor Kanter describes Walmart’s decision,

Wal-Mart’s unilateral decision to put its purchasing and communication power behind going green also shows that a single company using its unique clout can accelerate public action to reduce greenhouse gases and reverse climate change. By rolling out an environmental labeling program disclosing to consumers the environmental costs of making products sold at Wal-Mart, the $401 billion retail behemoth has transformed green standards from nice-to-have to must-have.

It marks a change in how products will be labeled, how supply chains communicate their activities and in the information that will inform consumers make purchasing decisions. This is how Green To Gold author Andrew Winston describes it in a post How The Wal-mart Eco-Ratings will Save Money, also on the Harvard Business Review.

And this is the larger trend that’s coming. The combination of technology and rising consumer demands is creating a powerful movement toward greater transparency  about how a product is made, where it comes from, how much energy is used, and so on. Consumers are already starting to get a taste of this data — you can already download a number of iPhone apps and/or check websites like GoodGuide.com  to find product sustainability scores. Consumers will certainly want more, and they’ll want more coordination between all the groups starting to collect it. The world’s biggest retailer kicking off this initiative is a good start at harmonizing all these sources.

Sounds like a game changer to me.

-FR

Supply Chain, Sustainability Andrew Winston, Harvard Business Review, Professor Rosabeth Kanter, supply chain sustainability, Sustainability, Wal-mart, Walmart, Walmart's Sustainability Index

Leave it to Walmart to up the ante. Today the world’s largest retailer released a statement that should catch everyone’s attention. They have announced plans to create a product sustainability index that will eventually (they believe) be included on all products that are sold in Walmart stores. According to Walmart the index will give consumers a single source of data for the evaluation and comparison of a product’s sustainability. It reinforces Walmart’s commitment to leadership in the area’s of both sustainability and corporate social responsibility.

According to Mike Duke, Walmart’s President and CEO:

Customers 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 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.

We do not see this as a trend that will fade. Higher customer expectations are a permanent part of the future.

At Walmart, we’re working to make sustainability sustainable, so that it’s a priority in good times and in the tough times. An important part of that is developing the tools to help enable sustainable consumption.

The Walmart plan calls for a 3 phase approach to the development and implementation of the index. The first step is creation of a survey (sounds a little like the Verdant 360) that will ask questions around 4 areas.

1. Energy and Climate
2. Material Efficiency
3. Natural Resources
4. People and Community

Walmart will be asking it’s over 100,000 suppliers to respond to the survey. It is asking it’s U.S. base suppliers to respond by October of this year.

The second phase will be to create a consortium of universities to collaborate with suppliers, retailers, NGO’s and governments to create a global database of information of the cradle to grave impact of the products that are sold in Walmart stores. They intend to engage a software company create an open platform to power the index.

The Third and final phase will be to translate the data captured in phase two into a standard that informs consumers about the sustainability of products.

This is how the statement was reported in bloomberg.com today,

Wal-Mart’s unilateral decision to put its purchasing and communication power behind going green also shows that a single company using its unique clout can accelerate public action to reduce greenhouse gases and reverse climate change. By rolling out an environmental labeling program disclosing to consumers the environmental costs of making products sold at Wal-Mart, the $401 billion retail behemoth has transformed green standards from nice-to-have to must-have.

We will be discussing this for some time to come.

-Fred

Corporate Social Responsibility, Supply Chain, Sustainability Add new tag, Corporate Social Responsibility, supply chain sustainability, Walmart