Wal-Mart Sustainability Index Ups the Ante for Suppliers

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Fresh off the presses, and addressed in The New York TimesTreehugger, GreenBiz and Slate’s business site The Big Money, is Wal-Mart’s new sustainability index – an effort to assess the sustainability of every single product that Wal-Mart sells. The corporate giant will formally announce the index on Thursday, July 16.

The index will be overseen by the Sustainability Consortium, which includes representation from the Environmental Defense Fund and leverages the expertise of several university partners including Duke University’s Corporate Sustainability Initiative, which has already published on the knotty challenges of eco-labeling. Products will be evaluated via a Life Cycle Assessment, which traces products from their raw materials through production, transportation, consumption and disposal. According to the consortium (and of particular interest to those of us at Green Plus), the sustainability index will cover not just the environmental impact of a product but also its social impact:

“Measurements of sustainability will be holistic and account for both environmental and social imperatives throughout the entire life cycle of the product including manufacture, distribution, consumer use, and post-use. These measurements will be derived from four areas: energy and climate, material efficiency, natural resources, and people and community.”

Wal-Mart’s deep supply chain means that any environmental initiatives it undertakes have far-reaching implications. According to the New York Times, “Wal-Mart plans to begin by asking its more than 100,000 suppliers around the world to answer 15 simple questions about the sustainable practices of their companies.” And the third-party nature of the consortium serves to legitimize the index itself, which will ultimately encourage better purchasing decisions by consumers (who will be able to navigate through the eco-labeling landscape) and better production decisions by suppliers (who will likely respond to consumer demand for better products, and will have better insights into their own supply chain and its impact through the assessment process itself). And aided by the index itself, other retailers will have the opportunity to target their purchasing in a more sustainable way.

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Elizabeth Liedel is a joint degree candidate at Duke University, pursuing an MBA at the Fuqua School of Business and a Master of Environmental Management at the Nicholas School for the Environment. She is on the Executive Committee of the Duke Microfinance Leadership Initiative and is active in...
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