Walmart sustainability index to put suppliers under spotlight

By Rory Harrington

- Last updated on GMT

Walmart sustainability index to put suppliers under spotlight
More than 100,000 suppliers to Walmart will be asked to prove their green credentials after the company unveiled plans yesterday to develop a world-wide sustainable product index.

The goal of the ambitious scheme, which is expected to take years to complete, could see each and every item sold by the retail giant given an eco-rating that will tell consumers how green and sustainable it is. Walmart CEO Mike Duke declared it would make the company’s supply chain “more transparent”.

Impact on suppliers

The initial impact of the proposals will fall on the company’s suppliers – many from the food and beverage industries – and, as the world’s largest retailer, Walmart is seen as one of the very few companies with the clout to persuade its suppliers to modify or change their practices. According to reports in the US media, the company will not grant suppliers exemptions to their eco-standards. When asked what relationship Walmart would maintain with suppliers that don’t supply the data, chief merchandising officer John Fleming is reported as saying: “We probably don’t have one.”

The first part of the global initiative will see Walmart ask 15 “simple but powerful​” questions to each of its suppliers on the sustainable practices in their companies. In launching the initiative, Duke said the company now expected more of its 100,000 suppliers around the world.

Eco info

Firms will be obliged to provide details around four areas; energy and climate; material efficiency; natural resources and people and community. As an example, the Walmart chief said suppliers would be asked to reveal the location of all their factories, if they are measuring greenhouse gas emissions, as well as information on water use and solid waste.

So-called top tier suppliers in the United States will be expected to complete the survey by October 1 while country-by-country deadlines will be set for oversea firms.

As a second step, Walmart said it will work with a consortium of universities to collaborate with suppliers, retailers, Non-Governmental Organisations (NGO) and governments to “develop a global database of information on the lifecycle of products – from raw materials to disposal’​” said the company. Walmart would provide the initial funding but said it would not “create or own the index”.

Transparent supply chain

The final stage of the index would be to provide customers with an eco-rating to help them make “choices and consume and a more sustainable way​”. How that information will delivered is still unclear, said a Walmart statement, but could take the form of a numeric score, colour code or some other label.

Duke concluded: “The Index will bring about a more transparent supply chain, drive product innovation and, ultimately, provide consumers the information they need to assess the sustainability of products.”

Related topics: Sustainability, Markets

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