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Joel Makower, Executive Editor
OAKLAND, Calif. -- Wal-Mart has announced another step in its efforts to make its supply
chain more sustainable as a new report comes out explaining the
benefits, both environmental and other, of a greener supply chain.
The retailer is planning a meeting with about 1,000 Chinese
suppliers later this year to set environmental goals similar to or in
line with company-wide goals or initiatives it has started in the
United States.
"I'm very confident that we are going to see in China more
progress than any of us has imagined," Wal-Mart CEO Lee Scott told the
Financial Times. "Part of it is . . . because the Chinese government
has just now really got on the sustainability process as far as
understanding what it is going to mean for them in the long term. And
they're being really aggressive."
About 30 percent of all foreign purchases in China are made by
Wal-Mart, which is pushing its suppliers to reduce their impact on the
environment through using less resources and emitting less pollution
and greenhouse gases. The company plans to reduce the amount of
packaging used by products by 5 percent by 2013 and created a packaging
scorecard to help suppliers see where they can make improvements. At a recent talk
at University of California-Berkeley, Wal-Mart's Senior Vice President
for Sustainability Matt Kistler said its supply chain makes up 92
percent of its environmental footprint, and the company has direct
control over only 8 percent of its footprint.
Aside from the environmental benefits of less resources being used,
less waste being made and fewer emissions being produced, a greener
supply chain can affect the bottom line for businesses and consumers.
A report by Diamond Management & Technology Consultants, Inc.
makes the case that adding green practices throughout a supply chain
can reduce costs, make it more efficient and increase shareholder
value. Nestle, for example, has saved $510 million worldwide between
1991 and 2006 by reducing packaging.
"The Case for a 'Green' Supply Chain: Turning Mandate into Opportunity"
makes some recommendations on how to approach making a supply chain
more earth-friendly. A company must start with an overall, long-term
strategy and regularly analyze and prioritize different efforts and
programs.
See ClimateBiz.com