VIEWPOINT: Has Walmart lost sight of its green vision?
15 March 2012 | Features & Interviews | Source: Leonie Barrie
Walmart created a stir back in 2009 when it announced an ambitious programme for sustainability reporting. Its goal was to develop a Sustainability Index to assess the environmental impacts of every item on its shelves and provide an easy rating system to help shoppers make greener choices.
While the world's largest retailer admitted it was years away from achieving its goal, and was vague about what exactly manufacturers would be reporting on, its green vision of the future was widely hailed as a first step in redefining the way products are designed and made.
Suppliers would be required to calculate the full environmental costs of making their products and the ultimate vision was to see clothing labels that would 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.
And buyers, too, would 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.
But fast-forward nearly three years and questions are being asked about what happened to Walmart's promised green product rankings?
The company set a five-year timetable, but its ambitious project doesn't yet have much to show, according to a new report on 'Walmart's Greenwash', prepared by the US-based non-profit Institute for Local Self-Reliance.
A consumer label "is really far off and maybe not a reality," according to Elizabeth Sturcken, a managing director at Environmental Defense Fund, which has partnered with Walmart on its sustainability initiatives.
Still, she thinks the project could produce valuable information for Walmart and manufacturers, and drive product improvements.
Even that seems to be proving elusive though. To do the necessary product analysis, Walmart founded the Sustainability Consortium, a university-hosted group that has since attracted 75 corporate members.
But the consortium recently admitted it is not developing a rating system or even product-specific information. It is assembling general lifecycle data for types of products, but not for specific brands within those categories.
So far, the consortium has finished just 10 assessments, the report says - noting that a Walmart supercentre carries roughly 140,000 items across thousands of product types.
Although the Sustainability Index may never materialise, Walmart has been taking environmental issues to manufacturers in other ways. The company sent all of its suppliers a "sustainability assessment" in 2010, asking them to answer 15 questions about their practices.
But that survey has been criticised as "superficial at best, voluntary in nature, and the answers are largely yes-or-no, self-reported, and unverified."
Some suppliers have also grumbled that the survey was merely a tool for Walmart to better understand their cost structures and use that knowledge against them.
In China, where Walmart sources roughly 70% of everything it sells, a Sustainability Summit for its Chinese suppliers in 2008 outlined new goals for suppliers to demonstrate their compliance with Chinese environmental laws and regulations.
It also wanted the top 200 factories where it sources directly in China to achieve 20% greater energy efficiency.
But the top 200 factories in China constitute less than 1% of the 30,000 factories in the country supplying Walmart, so a key question going forward is whether the others will follow.
"So far, there's no evidence that Walmart's purchasing patterns have been changed at all by the answers it's received to its questionnaire, by its energy-efficiency efforts with Chinese suppliers, or by the Sustainability Index program," the ILSR says.
"It doesn't appear that greener products are edging out more damaging ones on Walmart's shelves. The company has not established incentives for its buyers to favour more environmentally friendly products; their performance continues to be measured on sales volume and profit margins.
"Walmart also refuses to make longer-term purchasing commitments to its suppliers, which leaves many wary of investing in new technologies that may take years to pay off.
"While Walmart may have made sustainability part of its conversation with manufacturers, so far this has done little to alter business as usual."