Wal-Mart to Rank Supplier Products for Sustainability Based on Supply Chain Data

July 20, 2009
BENTONVILLE, Ark.—Wal-Mart announced plans to develop a “sustainable product index” that will evaluate the sustainability of products.

The announcement was made at a recent meeting with 1,500 Wal-Mart suppliers and associates at the retail giant’s headquarters.

“Customers want products that are more efficient, that last longer and perform better,” said Mike Duke, Wal-Mart’s president and CEO. “And, increasingly they want information about the entire lifecycle of a product so they can feel good about buying it. They want to know that the materials in the product are safe, that it was made well and that it was produced in a responsible way.”

Wal-Mart will begin the process by surveying its worldwide suppliers. The survey includes 15 questions that ask about supplier’s goals to reduce energy costs and greenhouse gas emissions, cut waste, enhance quality, responsibly source raw resources and produce products responsibly and ethically.

“The survey will include simple but powerful questions covering familiar territory, such as the location of our suppliers’ factories, along with new areas like water use and solid waste,” said John Fleming, chief merchandising officer at Wal-Mart. “The questions aren’t complicated, but we’ve never before systematically asked for this kind of information. The survey is a key first step toward establishing real transparency in our supply chain.”

Top-tier U.S. suppliers are being asked to complete the survey by Oct. 1.

In the second phase of the project, Wal-Mart will create a consortium of universities that will develop a global database of information on the lifecycle of products—from raw materials to disposal. Wal-Mart has provided initial funding for the Sustainability Index Consortium. The company will also partner with one or more technology companies to create an open platform that will power the index.

“It is not our goal to create or own this index,” said Duke. “We want to spur the development of a common database that will allow the consortium to collect and analyze the knowledge of the global supply chain. We think this shared database will generate opportunities to be more innovative and to improve the sustainability of products and processes.”

The final step in developing the index will be to translate the product information into a rating consumers can use to evaluate the sustainability of products.