Wal-Mart Taps CDP for Emissions Reporting in Sustainability Index

July 16, 2009

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As Wal-Mart goes, so goes the world. When it comes to carbon emissions reporting, the $406 billion retailer appears to be suggesting that suppliers go through the Carbon Disclosure Project.

Additionally, Wal-Mart sees its new sustainability index leading to a universal standard that can be applied across “all retailers, all suppliers,” said Wal-Mart chairman and CEO Mike Duke.

“We see this as universal — this is not a U.S. standard,” Duke said during a July 16 meeting to unveil the firm’s new sustainability index.

It may be several years before shoppers see “green” ratings on product shelves, reports Associated Press.

In the meantime, Wal-Mart aims to ask 15 questions (download the PDF) on the sustainable practices of its some 60,000 suppliers. The questions will be in the following four areas: energy and climate; material efficiency; natural resources; people and community.

Of the 15 questions, one will ask suppliers if they respond to the Carbon Disclosure Project (CDP), said Lisa Lee of CDP.

Lee notes that Wal-Mart was the first corporation to work with CDP in order to request climate change data from its suppliers.

Responding to criticisms that the sustainability index will add costs to the supply chain, Wal-Mart said it hopes to add efficiencies and drive costs out of the system.

Duke indicated that suppliers into the Wal-Mart system would not be asked to divulge proprietary information that might give competitors an edge.

Wal-Mart is providing the seed money for a consortium of universities, NGOs and other parties who would define the paramaters of a forthcoming sustainability index. Wal-Mart also invited competitors Costco, Target and Kroger to join the consortium.

The consortium will be led by Jon Johnson, who holds the Walton professorship in sustainability at the University of Arkansas, along with Jay Golden, an assistant professor in the school of sustainability at Arizona State. Among major suppliers said to be involved are Unilever, Procter & Gamble, Tyson, General Mills and Tyson, among others.

Wal-Mart said it will make available a replay of the Webcast of the July 16 meeting at this site.

Here are the 15 questions Wal-Mart will ask of suppliers:

Energy and Climate: Reducing Energy Costs and Greenhouse Gas Emissions

1. Have you measured your corporate greenhouse gas emissions?
2. Have you opted to report your greenhouse gas emissions to the Carbon Disclosure Project (CDP)?
3. What is your total annual greenhouse gas emissions reported in the most recent year measured?
4. Have you set publicly available greenhouse gas reduction targets? If yes, what are those targets?

Material Efficiency: Reducing Waste and Enhancing Quality

1. If measured, please report the total amount of solid waste generated from the facilities that produce your product(s) for Walmart for the most recent year measured.
2. Have you set publicly available solid waste reduction targets? If yes, what are those targets?
3. If measured, please report total water use from facilities that produce your product(s) for Walmart for the most recent year measured.
4. Have you set publicly available water use reduction targets? If yes, what are those targets?

Natural Resources: Producing High Quality, Responsibly Sourced Raw Materials
1. Have you established publicly available sustainability purchasing guidelines for your direct suppliers that address issues such as environmental compliance, employment practices and product/ingredient safety?
2. Have you obtained 3rd party certifications for any of the products that you sell to Walmart?

People and Community: Ensuring Responsible and Ethical Production
1. Do you know the location of 100 percent of the facilities that produce your product(s)?
2. Before beginning a business relationship with a manufacturing facility, do you evaluate the quality of, and capacity for, production?
3. Do you have a process for managing social compliance at the manufacturing level?
4. Do you work with your supply base to resolve issues found during social compliance evaluations and also document specific corrections and improvements?
5. Do you invest in community development activities in the markets you source from and/or operate within?

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Reader Comments

It was a very interesting webcast to view yesterday. It will be very interesting to see if and when Wal Mart’s consortium will be expanding beyond US retailers borders. Also the details about their collaboration platform, for which they will be looking for technology partners, will be of importance. If Wal Mart is really going to put the customer in the driving seat I do hope they’re gonna use concepts like open data, creative commons, open standards, API’s and mash-up technology for the web. So IT-companies can compete in building applications that serve users best.

The remark that they won’t ask for information which might give competitors an insight is a tricky one, in my personal opinion it is sometimes abused as an argument for non-disclosure.

krispijn beek | July 16th, 2009