Blog: Walmart’s next green dream
Leonie Barrie | 17 July 2009
I wonder how Walmart suppliers feel when the invitation to one of the retailer’s sourcing summits comes through? Is it greeted with excitement at the new initiatives about to be unveiled, or perhaps trepidation at the thought of yet more rules and regulations for the companies making its products?
In Beijing last October the message came across loud and clear that responsibility for merchandise quality and social compliance at every factory feeding into the retailer’s supply chain rests firmly on the shoulders of direct suppliers. Walmart also raised the bar on the number of environmentally sustainable products on its shelves, and said it expects to see an end to returns on defective merchandise by 2012.
And yesterday at its headquarters in Bentonville, it rolled out plans to get its suppliers to calculate the full environmental costs of making their products as part of moves to develop an environmental labelling program for the items sold in its stores.
In its latest green vision of the future, clothing labels will not only display size, price and care instructions but also information like how much cotton was used and how many product miles were consumed to get an item such as a T-shirt into the store.
Take it forward another step, and shoppers will be able to point their smart phones at a product and see the field the cotton came from, and even a picture of the farmer who grew it, the retailer said.
And buyers, too, will for the first time be focused on entire product lifecycle management – where the raw materials come from, how products are manufactured, transported and distributed and ultimately, what happens at the end the cycle.
The plans might be ambitious, but where the world’s largest retailer leads, other retailers and their suppliers are likely to follow too. In fact, Walmart is actively encouraging their involvement in its new sustainable product index, which it hopes will evolve as a single global source of information that can be used by anyone trying to evaluate product sustainability.
The initiative could be a first step in redefining the way products are designed and made up – but there are also fears they could raise costs for suppliers and customers.
Reducing energy costs and greenhouse gas emissions, cutting waste, and sourcing responsibly are all commendable, but who will pay for investments in a cleaner supply chain?
Walmart, however, argues the index will drive higher quality and lower costs by providing an opportunity to drill deep into the supply chain and strip out unnecessary costs. It also hopes to cut down on waste by paying closer attention to the type of products its customers want.
Walmart isn’t the only retailer with green goals, of course – Marks & Spencer, for example, has been pursuing its Plan A initiative for around two and a half years – but this is probably the first time such a plan has required buy-in from other retailers to make it a success.
And this across-the-board support is crucial to prevent suppliers being burdened with a raft of competing audits.
Walmart’s president and CEO Mike Duke rightly believes that “demand for products that are more efficient, that last longer and perform better...that the materials in the product are safe and that it was produced in a responsible way” is not going to fade.
He adds: “At Walmart, we're working to make sustainability sustainable, so that it's a priority in good times and in the tough times.”
But whether one company has the influence to bring together competitors and suppliers across a range of products, not just clothing, remains to be seen. Walmart has certainly set itself an ambitious goal – but it may well be that this really is the next step in the sustainability journey.
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