Wednesday, July 22, 2009

Walmart to develop sustainable product index

Walmart is sending its 100,000 global suppliers a short survey to evaluate each company's sustainability. The 15 questions are divided into four areas: Energy and Climate, Natural Resources, Material Efficiency and People and Community.

The retail giant will ask its top tier American suppliers to complete the survey by October 1. Outside the U.S., the company says it will develop timelines on a country-by-country basis.

"The index will bring about a more transparent supply chain, drive product innovation and, ultimately, provide consumers the information they need to assess the sustainability of products," Walmart CEO Mike Duke said in a statement. "If we work together, we can create a new retail standard for the 21st century."

Given the company's history, particularly in the areas of labour relations and human rights, some critics are questioning Walmart's motives. Joel Makower of GreenBiz tells that Walmart scores points for including social issues under the sustainability umbrella, but says the five questions in the People and Community section "barely scratch the surface."

"For example, they don't address most worker issues, like wages, health-care and the right to air grievances," Makower says. "Not to mention the right to unionize, an area where I witnessed the company vacillate back and forth before taking a clear stance."

Others aren't quite so skeptical. Bill Baue, who wrote Walmart's first sustainability report in 2007 and also writes for CSRwire, notes that some people will welcome Walmart using its market muscle as a "bully pulpit" to push sustainability from the top-down - which arguably produces change more quickly than grassroots, bottom-up sustainability advances.

The complete list of questions is available on the Walmart website.

What do you think? Would a sustainability index be enough to convince you to include Walmart in your portfolio? Please share your comments.

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