There was a lot of buzz yesterday about Walmart's launch of its Sustainability Product Index but some are already addressing it as just a hype as doubts about its feasibility lingers especially within the supply chain community.
The goal of the index is to set standards and metrics on the sustainability of each product Walmart sells, from how they're made, how they're distributed to how they're disposed, so Wal-Mart in the long run can calculate and post an eco-rating for each item.
Wanna know how much greenhouse gas emissions your computer (that you bought from Walmart) emitted during its manufacture? You'll probably know in the next few years.
The company will introduce the initiative in three phases, beginning with a survey of its more than 100,000 suppliers around the world. Questions in the survey will focus on energy and climate; material efficiency; natural resources, and; people and community.
An example: What are your total greenhouse gas emissions reported in your most recently completed report?
It's a huge undertaking for suppliers from chemicals to product manufacturers. Suppliers are expected to provide lifecycle analysis of their products if Walmart wants a thorough sustainability data for their ecolabels.
Walmart will ask its top tier U.S. suppliers to complete the survey by Oct. 1, while suppliers outside the US will have a deadline on a country-by-country basis that are still being developed. To help set up the metrics and standards on how suppliers should comply, Walmart also established a consortium that will collaborate with suppliers, retailers, NGOs and government to develop a global database of information on the lifecycle of products.
The company will initially fund the consortium but expects retailers and suppliers to contribute the rest. The company said it does not intend to own the index but to share the database to generate innovation opportunities to businesses.
And that's the crux of the matter, right? Who will bear the costs of all of these undertakings? Walmart expects that in the long run, this index will lower costs of the products by improving suppliers' effiencies and reducing their energy use.
As I've said, this is a very ambitious project but guess what? The chemical industry is already half way there what with the European Union's chemical legislation Reach, and with chemical companies' voluntary initiatives under the American Chemistry Council's Responsible Care program. Many chemical companies are already doing their sustainability reporting, which will help ease the burden of product manufacturers.
Walmart is bold enough to change the retail landscape before and maybe it will be able to do so again.
More analysis on Walmart's announcement:
Tagged: Wal-Mart's Big Push for Eco-Labels - Environmental Capital - WSJ