Should We Believe Wal-Mart?

Last month, Wal-Mart announced its plan to role out a sustainability index: a measure of how green its products are using a 15-question questionnaire (see the questions after the jump). You know that if the same store where a shrieking mob of holiday shoppers trampled an employee to death is talking this seriously about sustainability, then 1) we must really be in a pickle and 2) we must really be on the lookout for extreme greenwashing. Is Wal-Mart looking to improve its reputation? If so, is it doing so through deceptive or legitimate commitments? How can it reconcile profit with sustainability? How transparent will this process be?

I am reminded of Wal-Mart's commitment back in February 2006 to source all wild-caught seafood from sustainable sources by 2010 and the great press that announcement received. Yet, it's a goal Wal-Mart will utterly fail to meet. The New York Times just ran an editorial praising the sustainability index. Will it commit to following the story?

The 15 questions Wal-Mart intends to have its suppliers answer:

Energy and Climate: Reducing Energy Costs and Greenhouse Gas Emissions
1. Have you measured your corporate greenhouse gas emissions?
2. Have you opted to report your greenhouse gas emissions to the Carbon Disclosure Project (CDP)?
3. What is your total annual greenhouse gas emissions reported in the most recent year
4. Have you set publicly available greenhouse gas reduction targets? If yes, what are those targets?

Material Efficiency: Reducing Waste and Enhancing Quality
1. If measured, please report the total amount of solid waste generated from the facilities that produce your product(s) for Walmart for the most recent year measured.
2. Have you set publicly available solid waste reduction targets? If yes, what are those targets?
3. If measured, please report total water use from facilities that produce your product(s) for Walmart for the most recent year measured.
4. Have you set publicly available water use reduction targets? If yes, what are those targets?

Natural Resources: Producing High Quality, Responsibly Sourced Raw Materials
1. Have you established publicly available sustainability purchasing guidelines for your direct
suppliers that address issues such as environmental compliance, employment practices and
product/ingredient safety?
2. Have you obtained 3rd party certifications for any of the products that you sell to Walmart?

People and Community: Ensuring Responsible and Ethical Production
1. Do you know the location of 100 percent of the facilities that produce your product(s)?
2. Before beginning a business relationship with a manufacturing facility, do you evaluate the quality of, and capacity for, production?
3. Do you have a process for managing social compliance at the manufacturing level?
4. Do you work with your supply base to resolve issues found during social compliance
evaluations and also document specific corrections and improvements?
5. Do you invest in community development activities in the markets you source from and/or operate within?

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Nothing speaks like prices. It's the one datum about a good that consumers best understand, and one of the few involved in the transaction. I think it's pretty futile to think that external costs -- such as those to the environment -- can be countered by providing information about them attached to the products. The only effective routes to countering external costs are either regulation or some effective way to incorporate them into the price, i.e., internalizing them.

Do you think WalMart is really going to act on this? If Supplier A score lower than Supplier B, but supplies products at a cheaper cost than Provider B, do you really think WalMart is going to go with the more expensive supplier?

WalMart can do things that no other commercial entity can do by throwing its weight around. They certainly have done it in other areas with their suppliers. **IF** they do it honestly, some good can come out of their power over the market. Talk is cheap, and WalMart knows cheap.

By natural cynic (not verified) on 10 Aug 2009 #permalink

What bothers me about this is that regardless if Walmart ends up doing, people may now think of Walmart and sustainability together in the same sentence. I'd like for Walmart to fill out one of those questionaires and see how sustainable they are and have been; where did they get their building supplies to build all of their giant complexes, what sort of natural resources have they had an impact on, how do they support communities, workers, healthcare, and what percentage of their products are made overseas? It stinks that a big box that made a negative reputation for themselves is now getting patted on the back for "trying" to change their ways.

Wally World is quite serious about greening it's own environment as they've proved to themselves that it pays. I'm the last person on this planet to give then kudos but on the green front one should acknowledge they have gone to great lengths in the later stores to be as energy efficient as they can be.

This latest endeavour is not about anything other than letting customers choose which product they want to buy based on the responses to those questions. Certainly if, as a result, a product stops moving successfully Wally World will drop it. Additionally if a product takes off because of those questions they'll know they can up the price on it. There is nothing altruistic about this - it is pure business, but very smart business and in the end it does do some good.

The people in this country want to buy stuff dirt cheap and then they complain because it is poorly made, exploits labor, and destroys the environment. No free lunch, people. You want fair trade, bird friendly coffee? Gonna cost you $9 or so per 12 oz. You want pole-caught tuna? Guess what? It costs like three times as much as a can of Starkist. You want labor to make minimum wage or more, and have health benefits? Are you willing to pay for it?

Yeah. I didn't think so.

Middle-class and upper-class people who can afford to support their choices when they buy don't and lower-class people can't afford to do so.

Stop blaming Wal-Mart. The problem is the customer, not the merchant.

Marketing strategy -

Walmart purchases cheap items using cheap labor, non-green suppliers, etc., charges extremely low prices for them. People who are most concerned with saving money buy them.

Walmart also purchase green items from green suppliers, massively overcharges for them to get a huge amount of profit because people who are that concerned about the environment aren't thinking about money as much.

Profits from the green stuff enable Walmart to sell the cheap stuff even more cheaply, undercutting competitors who are selling on price.

No, we should not trust Walmart... that was a pretty easy conclusion for me to make. Here is a tougher one: Should we trust MSC as their certification of certain fisheries become more contentious among other NGOs...