Road to Wal-mart Environmental Sustainability Index 2010

Walmart announced in July the creation of its Sustainability Index initiative, meant to measure the sustainability of its products in four areas: energy and climate, natural resources, material efficiency, and people and community.

Timeline: The initiative is broken into three phases.

• The first phase is the supplier assessment, a survey the company's 100,000 global suppliers with 15 questions. Walmart's top-tier suppliers in the U.S. must complete the survey by Oct. 1; timelines for the remaining suppliers have not been announced.

• The second phase involves the creation of a lifecycle analysis database by a consortium of universities that will work with suppliers, retailers, government and nonprofits.

• The third and final step calls for delivering the information to the consumer on how products rank, possibly through a numeric score, color code or other label.

Wal-Mart's Goals: Creating Value for Business and Society

At the heart of our business is the belief that Wal-Mart can save its customers money so they can live better. Consistent with this vision, Walmart is committed to working with its suppliers, associates, customers and communities to achieve three aspirational goals:

1. To produce Zero Waste
2. Supplied with 100% Renewable Energy
3. Sell Sustainable Products.

Wal-Mart recognizes these are challenging aspirations, yet they are also a tremendous business opportunity. Behind each goal are untold opportunities to reduce waste and cost, improve product quality, drive innovation and tap growing consumer interest in sustainable products.

The Sustainability Assessment
 
Working with a diverse group of stakeholders, Wal-Mart hopes to develop credible, transparent measurements that will help them  reward suppliers for innovative, affordable products that are more sustainable for people and the planet. Wal-Mart has found that these measures also help our suppliers identify both cost savings and opportunities for new revenue.

Our Journey Begins: The Initial Questions
 
Wal-Mart begins with a set of 15 basic questions that give its  suppliers the opportunity to highlight important steps they are taking toward sustainability. Wal-Mart developed the questions with input from suppliers, academia, non-profit organizations, government, and the retail community. The questions come from its discovery that taking steps to measure sustainability impacts, and setting targets to reduce those impacts lead to reduced waste and costs, as well as innovation and new revenue streams.

To that end, measurement and transparency into the supply chain are the focus of these initial questions. In some cases, we ask for data for verification purposes. Please note that any absolute numbers provided in the suppliers answers will not be used for comparison to another supplier, taking into account the variability of measurement methods.

Where Wal-Mart is Headed

Wal-Mart acknowledges that these first questions do not cover all aspects of sustainability. It is, however, helpful in identifying leadership. Over the course of the next several months, it will seek to highlight additional activities and product attributes that create value for business, the planet, and society. Wal-Mart intends to reward those suppliers who have measured impacts and shown progress toward meeting aggressive sustainability goals.