Wal-Mart’s Sustainability Index: A World Changer?

Authors

• Ayesha Barenblat

  Former Director, Stakeholder Collaboration, BSR

The halls were abuzz with energy and excitement as some 2,000 Wal-Mart suppliers and associates gathered in their Bentonville, Arkansas, office auditorium (not to mention overflow rooms and offices worldwide via teleconference) for the official announcement of the much-leaked Sustainability Index (PDF).

I was a panelist at this Sustainability Milestone Meeting (led by new CEO Mike Duke), which unveiled what they hope will become the new retail standard of the 21st century and will push both transparency and innovation into all products.

Indeed, during the meeting Wal-Mart’s senior vice president of sustainability Matt Kistler reiterated that this is not a Wal-Mart or even a U.S.-led effort. The desire is for this to be a global effort used by retailers and suppliers in all countries around the world.

While I’ll skip the details of how the index works since it’s been covered exhaustively in the media, I will share some thoughts I gave at the meeting about how this new lifecycle assessment data can change the world in the coming decade.

In a world where consumers have easy-to-understand information at the time of purchase—much like nutrition labels—we would be empowered to buy products that respect the people that make them, factor in natural resource constraints, and allow us to become part of the solution.

What’s more, this data can create healthy competition and innovation among merchants, who would compete as much on sustainability attributes as other types of product innovation.

If this index is adopted across a broad range of products, it can lead to one standard way of calculating sustainability impacts. This will allow suppliers to not waste their time on different data questionnaires and requests from their customers, but instead allow time and resources to be focused on improving their sustainability performance.

As a result factories around the world could run their business more efficiently, save dollars by generating less waste and using less energy, do their part to respect workers in their communities, and save our limited resources for our future generations and families.

All of this information and data can close the loop—making long, linear, and wasteful supply chains circular and balanced. In this new picture, efficiency, profitability, and sustainability are one and the same.

Up next, Wal-Mart will be creating a consortium of universities, suppliers, NGOs, and other retail partners to start to collect the complex lifecycle assessment data needed to realize this bold goal.