The Product Sustainability Index: It's Not just for Walmart Suppliers
<p>Walmart's Product Sustainability Index will have a dramatic influence that will be felt well beyond the company's 100,000 or so suppliers.</p>
Years ago when I worked for EPA, I recall a conversation I had with my dad who said, "Gee, if I only knew the impacts of the products I buy, it would change my habits. If this information were as widely available as nutrition labels … now, that would benefit the environment." That conversation happened in the 1980s (I know…ancient history), but has stayed with me ever since. (The rest of this story helped launch the EPA lifecycle assessment program, but that is topic for another article).
Fast forward 20-plus years and now Walmart, the world's largest retailer, is collecting sustainability information from all their vendors.
While not quite lifecycle assessment, the Product Sustainability Index will go a long way toward understanding the impacts of the products Walmart sells and -- ultimately -- will lessen these impacts.
With 2008 sales topping $400 billion, Walmart's actions will have a dramatic influence. And this influence will be felt well beyond the 100,000 or so Walmart suppliers. When it was released in July, Walmart's 15-question Product Sustainability Index was called "fiendishly complex" by Treehugger.com (the same article proclaimed that "it is getting harder and harder to hate Walmart" -- this from treehugger.com!!).
How can a 15-question survey be complex? Each of the questions encompasses an entire program that, in many cases, may be completely new for companies. For example, the first question is: "Have you measured and taken steps to reduce your corporate greenhouse gas emissions?" While climate change is an issue of critical importance, many companies are just now learning how to measure their greenhouse gas emissions, much less how to take steps to reduce them. The index also covers a lot of ground. In addition to environmental impacts, the survey asks how vendors police labor and human rights issues in their supply chains.
During a recent webcast hosted by GreenBiz.com, Walmart discussed the Product Sustainability Index and how the results would be used in its buying decisions. While admittedly Walmart is very early in this process, its buyers will have access to this information and will factor it into decisions. In describing a vision of the future, Rand Waddoups (Walmart's senior director of sustainability), presented a graphic with red on one side and green on the other as one example of how this information may be used by consumers.
Only time will tell how this index will ultimately be utilized and the impacts it will have, but it is a great start. When your customer -- in most cases your largest customer -- begins to ask you about sustainability issues, it quickly becomes a top business priority. Undoubtedly, there are new conversations happening in companies across the globe that were spurred by the index. For many of these companies, it may be their first encounter with the concept of sustainability. After a quick crash course and a gap assessment, these companies will likely start putting programs in place that are needed to score top marks on the index.
The index has tremendous value even beyond the vast world of Walmart suppliers. Having worked in the sustainability arena for years, the best analogy for describing what I do is "it's like nailing Jell-O to the wall." In other words, the concepts are too vague and hard to define for people to easily grasp. The index will change this. It not only boils the issues down to a short survey, but it puts sustainability squarely in the middle of commerce. The business value of treating people and the planet with respect just got a whole lot easier to describe …
Ultimately, the index is a useful tool for all companies and institutions for evaluating their sustainability efforts. Backed by the force of Walmart's purchasing power, it will quickly become a benchmark for defining robust sustainability programs.
Recently, my employer -- Environmental and Occupational Risk Management (EORM) -- developed a self-assessment tool based on the index. While not endorsed by Walmart, this tool will allow companies the opportunity to test out the approach, identify gaps and understand the steps needed to optimize their sustainability programs.
Walmart vendor or not, the Product Sustainability Index, will spur positive changes at companies around the world. And, maybe someday soon, my dad will get his wish of knowing which products he should buy.
Tim Mohin is a principal consultant and team leader for EORM's growing sustainability and corporate social responsibility practice. Formerly, Tim was Apple's senior manager for supplier responsibility and led Intel's environmental and sustainability efforts. He also led the development of national environmental strategy (including lifecycle assessment) at the Environmental Protection Agency and the U.S. Senate including the development of the National Environmental Technology Act. Email him by clicking here.
Image courtesy of Walmart.
Editor's note: For more coverage of the Product Sustainability Index, visit GreenBiz.com's Sustainability Index page.