The Wal-Mart Sustainability Index: An Overview

[Zach Smith]

Retail giant, Wal-Mart, debuted their Sustainability Index in July. You can download Version 1.0 of the Index and the latest list of questions on the survey from my original blog post.

The survey is divided into four categories: Energy and Climate, Material Efficiency, Natural Resources, People and Community. In essence, it will function as an baseline measurement tool that sorts suppliers by having them demonstrate they are in control of their energy (GHG), waste (solid/water) management and reduction initiatives, material sourcing (production/certification), and community engagement (awareness of impact). At best, it points toward Cooperation. Basically, though, it sets a bar of Compliance for companies that want to do business with Wal-Mart

Though the first category is titled “Energy and Climate” a more appropriate heading would be “Greenhouse Gas Emissions.” The four questions in the category are focused completely through the lens of reporting and reducing greenhouse gas emissions.

The second category, “Material Efficiency”, is dedicated to reduction of solid waste and water use. Linked closely to Wal-Mart’s Packaging Scorecard and their Zero-Waste initiative, it is asking companies to demonstrate how they “reduce waste and enhance quality.”

Category three, “Natural Resources” focuses mainly on sourcing and certification, asking companies to report on origin of materials, purchasing guidelines and 3rd-party certification.

The fourth category is “People and Community” and centers on corporate awareness of and engagement with the communities in which they operate. The first question is telling. It asks if companies know where all of their production and manufacturing facilities are. It’s a start…

Relatively unexceptional in its content it still has very strong potential to be a game-changing move. The reason is simple: as a supplier, to do business with Wal-Mart means doing business their way. Though they are not setting any baseline requirements at the moment, nor are they auditing suppliers (answers to the 15-question survey are received in good faith) they are asking suppliers to complete the survey. To do so means you want (and really need) to have policies and controls in place or risk getting pushed out by companies that do.

Ultimately, this points to the development of an embedded system of and processes for sustainable business. The question suppliers for Wal-Mart have to answer is: “How far do we want to go?” Simple Compliance or Conformity? Cooperation? Collaboration and Coherence? Or, systemic Constellation?

Up next: How sustainable is the Wal-Mart Sustainability Index?