Wal-Mart Announces Sustainability Index

The mega-retailer's index will make it easier for consumers to make green choices when they shop.

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When so many products come labeled as "green" or "natural," finding the most sustainably-made stuff can be as tricky as comparing apples to oranges. But Wal-Mart will one day be able to tell you which of the two fruits is greener - along with every other product, from tennis rackets to telephones, in every Wal-Mart store. The company's sustainability index, announced today at a meeting with suppliers and environmental leaders, will evaluate every Wal-Mart product's environmental impact throughout its entire lifecycle, and will condense the data into an easy-to-understand rating for shoppers. Needless to say, it is a major undertaking.

Anything that Wal-Mart does has a huge impact. Look at the documentary " Food Inc." (in theaters right now) to see the ripple effect that the company's decision to only sell hormone-free milk has had on the supply chain. Same goes for their refusal to sell baby bottles made from Bisphenol-A. So you can bet that suppliers are going to care about their product's eco-rating on Wal-Mart's shelves. As The Big Money's Marc Gunther said, the plan "has the potential to transform retailing by requiring manufacturers of consumer products to dig deep into their supply chains, measure their environmental impact, and compete on those terms for favorable treatment from the world's most powerful retailer." And if it's adopted by other retailers, which Wal-Mart hopes it will be, it could change our big-box experience for good.

So how will Wal-Mart be able to tell us which brand of socks is the greenest? According to a company press release:

The company will introduce the initiative in three phases, beginning with a survey of its more than 100,000 suppliers around the world. The survey includes 15 questions that will serve as a tool for Walmart's suppliers to evaluate their own sustainability efforts. The questions will focus on four areas: energy and climate; material efficiency; natural resources, and people and community.

You can find the full questionnaire here. Though questionnaires are expected to be completed quickly - by Oct. 1 for top suppliers, to be precise - they are just one part of a process that the company expects will take several years. The sustainability index will be overseen by a consortium of universities, which will accurately measure each product's lifecycle impact, from raw materials to disposal. Though Wal-Mart is providing the initial funding for the project, President and CEO Mike Duke has stated that they will offer the index to collaborators on an open platform.

Though environmentalists are salivating at the thought (Treehugger's seemingly faint praise, "It's getting harder and harder to hate Wal-Mart," is actually a big wet kiss), the Wall Street Journal has pointed out one downside:

The most immediate impact will be felt by Wal-Mart suppliers, who will bear the costs of the company’s environmental mandates once again, at a time in which many are struggling economically due to the global downturn. Some advisers to Wal-Mart concede that the index is likely to raise supplier costs and thus affect the price consumers pay.

Though some of the cost may be passed along to the consumer, the index will not be fully implemented for at least five years.

Wal-Mart is the largest company to attempt a green labeling system for products, but it isn't the first. British supermarket chain Tesco has experimented with carbon labeling, and Japan and Australia have announced plans to label their products, as well. In the meantime, consumers who are looking to make greener choices as they shop can rely on the Good Guide, which rates food, personal care and household items by their sustainability, and is also available as an iPhone application.


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Walmart
environment

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