Wal-Mart is planning to develop a global sustainability index in a bid to establish a single source of data for evaluating the effects the products it sells has on the environment.
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The scheme, which was unveiled at a meeting with suppliers at Wal-Mart’s Bentonville home office, comes in response to growing consumer demand for sustainable products.
“Customers want products that are more efficient, that last longer and perform better,” said Mike Duke, Wal-Mart’s president and CEO.
“And increasingly they want information about the entire lifecycle of a product so they can feel good about buying it. They want to know that the materials in the product are safe, that it was made well and that it was produced in a responsible way.
Duke added: “We do not see this as a trend that will fade. Higher customer expectations are a permanent part of the future.”
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By GlobalDataWal-Mart plans to bring in the initiative in three phases, beginning with a survey asking suppliers to evaluate their own sustainability efforts. The questions will focus on four areas: energy and climate; material efficiency; natural resources, and people and community.
“The survey will include simple but powerful questions covering familiar territory, such as the location of our suppliers’ factories, along with new areas like water use and solid waste,” said John Fleming, chief merchandising officer, Wal-Mart US.
“The questions aren’t complicated but we’ve never before systematically asked for this kind of information. The survey is a key first step toward establishing real transparency in our supply chain.”
Fleming said the company would ask its top-tier US suppliers to complete the survey by the beginning of October. Outside the US, the company will develop timelines on a country-by-country basis, Fleming added.
The second stage of its scheme will see Wal-Mart help create a “consortium of universities” that will collaborate with suppliers, retailers, NGOs and government to develop a global database of information on the lifecycle of products.
The retailer has provided the initial funding for the Sustainability Index Consortium, and inviting all other retailers and suppliers to contribute.
Wal-Mart will also partner with one or more leading technology companies to create an open platform that will power the index.
“It is not our goal to create or own this index,” said Duke. “We want to spur the development of a common database that will allow the consortium to collect and analyse the knowledge of the global supply chain. We think this shared database will generate opportunities to be more innovative and to improve the sustainability of products and processes.”
The final step in developing the index will be to translate the product information into a simple rating system to communicate the sustainability of products to consumers.
