On July 16th, Walmart announced plans to develop a worldwide sustainable product index during a meeting with 1,500 of its suppliers, associates, and sustainability leaders at its home office in Bentonville, Arkansas. Walmart claims the index will establish a single source of data for evaluating the sustainability of products, but a better way to think about it is as a starting point for evaluating the sustainability of the suppliers themselves. Walmart is going to do this through a series of 15 questions, w
Are the questions comprehensive enough to get down to the manufacturing process and individual product level? What do you think?
My take is not really, but change has to start somewhere. And Duke even said in his speech: "These are not complicated questions, but we have never systematically asked for this kind of information before". And that's where the change is coming from, the fact that Walmart, and soon other retailers, will ask the same questions.
Maybe my next thought comes from being a parent, but I think it makes sense to ask here - What do you do with the information when a supplier has behaved badly? What's the penalty and reward system? It's not clear that there is one today, but odds are, there will be one, maybe informally at first, but at some point it will definitely matter from a competitive standpoint. And this is why manufacturers have to be ready to answer these questions, and even more, because Walmart is just the beginning.
One of the phrases that is repeated over and over in the questions is "publicly available". This is a reflection of where sustainability is heading, providing a level of transparency to the business that companies haven't necessarily been prepared to give (or haven't necessarily known) in the past. Walmart asks companies if they have set publicly available targets for GHG, solid waste, and water reduction and sustainability purchasing guidelines. And Walmart refers to 3rd party certification and the Carbon Disclosure Project in two questions, giving a nod to the importance of externally defined and verified data. How about the question that gets right to the knowledge component – "Do you know the location of 100% of the facilities that produce your products?" Everywhere we look at this announcement, we see the expectation for better data and information related to environmental and social sustainability.
We've long stated that manufacturers need to make it easy for their customers to go green, and this means manufacturers need to take the responsibility for changing their products and processes. Having the data and information and being able to share it is an important first start. Walmart may be the push many manufacturers need to get going.
What's going to motivate your company? A retailer, the competition, the consumers? And what about the Carbon Disclosure Project - what do you think? Let me know.