AUGUST 2009

Retailer to encourage use of eco-friendly manufacturing
Index will drive higher quality, lower costs and measure sustainability of products

Wal-Mart 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. The index will establish a single source of data for evaluating the sustainability of products.

For survey questions, photos and a fact sheet, click here.

“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.

The company 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 Wal-mart’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, Wal-mart 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 United States suppliers to complete the survey by October 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. Wal-mart 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.”

The final step in developing the index will be to translate the product information into a simple rating for consumers about the sustainability of products. This will provide customers with the transparency into the quality and history of products that they don’t have today.