July 16th, 2009

From Green Right Now Reports

Wal-Mart Stores Inc. today will unveil an ambitious plan to put an eco-label on the thousands of products in its stores that essentially tell consumers how “green” a product is. The program, if successful, could ultimately have a cascading impact across the entire retail landscape.

The worldwide sustainable product index was announced during a meeting with 1,500 of its suppliers, associates and sustainability leaders at its home office in Bentonville, Ark.

The eco-labeling program is the latest step in the evolution of the world’s largest retailer from a company once viewed as chief offender to the global leader on sustainable practices. Wal-Mart has long been known for its ability to force its suppliers to meet strict price points and other guidelines.

Now the giant retailer will tell it suppliers they must calculate and disclose the full environmental costs of making their products. Wal-Mart will then create a rating system for product sustainability similar to nutritional labels on food.

The program will go beyond existing product labels such as “natural” and “organic” to paint a larger picture of a product’s carbon footprint. For example, a particular product could be made of organic materials, but originate thousands of miles a way in manufacturing facility that has poor sustainability practices. Wal-Mart will force its suppliers to disclose their water use, among other environmental factors.

“Customers want products that are more efficient, that last longer and perform better,” said Mike Duke, Walmart’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.

“We do not see this as a trend that will fade. Higher customer expectations are a permanent part of the future,” Duke continued. “At Walmart, we’re working to make sustainability sustainable, so that it’s a priority in good times and in the tough times. An important part of that is developing the tools to help enable sustainable consumption.”

The company said it will introduce the initiative in three phases, beginning with a survey of its more than 100,000 suppliers around the world. The survey includes 15 questions that will serve as a tool for Walmart’s 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, Walmart U.S. “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 also said the company will ask its top tier U.S. suppliers to complete the survey by Oct. 1. Outside the United States, the company will develop timelines on a country-by-country basis for suppliers to complete the survey.

As a second step, the company is helping 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 — from raw materials to disposal. Walmart has provided the initial funding for the Sustainability Index Consortium, and invited all retailers and suppliers to contribute.

The company 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 analyze 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.”

A similar rating system has grown from a project at the University of California – Berkeley. The GoodGuide, which launched last September, already boasts a library of 70,000 products and is getting daily queries from the public for more, says Jodie Van Horn, director of partnerships for GoodGuide.