An up-close assessment of Walmart’s sustainability index
In Marc Gunther’s recent article about Walmart and its efforts to make toy production more sustainable, he calls the Walmart supplier Sustainability Index "the biggest environmental initiative in the company's history," and Environmental Defense Fund (EDF) agrees. He also questions whether "Walmart is taking this too far”"and "how the world's largest retailer is exercising its market power."
With a 25-year track record challenging companies to make decisions that are good for the environment and the economy, we at EDF are used to asking such tough questions.
That's precisely why we have an EDF office based in Bentonville, Ark., dedicated solely to working together with Walmart to advance sustainability. Because we don't take money from the company, we can push hard to achieve the kinds of transformational change of which it is capable.
When it comes to the Sustainability Index, we're on board. And here’s why:
With over 100,000 suppliers, Walmart has the ability to use the Sustainability Index to move entire industries to go beyond what is required by law, benefiting consumers, workers and the planet.
The recent launch of the Index marks a highly anticipated milestone three years in the making for Walmart. Put it this way, if Walmart's sustainability journey were a bestselling trilogy, we'd be starting the second book. In the first book, the goals were set, the groundwork built, some smaller battles were won and lost. But now we're getting to the real action. As the environmental advocate in the room, this is a book I don't want to put down.
If you missed the first book (where were you?), Gunther gives a nice recap here.
For the first time, environmental outcomes truly worthy of Walmart's scale seem achievable: Major reductions in greenhouse gas emissions. Improved efficiency across supply chains and sectors. Improvements in water quality and human health. The list goes on.
Beginning this year, Walmart will use The Sustainability Index to influence the design of its U.S. private brand products and will require its buyers to set specific sustainability objectives that will be tied to their annual reviews. For example, Gunther zooms in on Walmart’s senior buyer for baking commodities, Tim Robinson, in another recent story about the index to show how this is happening in real time. Of course, Robinson's story is one of many.
By the end of 2017, Walmart will buy 70 percent of the goods it sells in U.S. stores and U.S. Sam’s Clubs from suppliers who use The Sustainability Index to evaluate and share the sustainability of products.
And while we see the Index moving in the right direction, EDF continues to ask the tough questions. How do we keep the momentum going across hundreds of buyers and thousands of suppliers? How do we avoid unintended consequences? How do we track and measure the true impact of progress on the ground? What is the full potential of the Index? Is incremental change enough to get us where we need to be by when we need to be there?
These are the questions to be answered in the second part of this sustainability story, and I have my fingers crossed for something truly epic.
This blog has been reprinted with permission by EDF.