GE, HP, Walmart Play Regulator in Their Own Supply Chains

Where regulation of environmental impacts is weak, what do big companies do? They take on the regulatory role themselves, according to Bloomberg.

The news outlet says government enforcement of environmental rules in some developing countries is struggling to keep up with a surge in manufacturing – so General Electric, Wal-Mart and Hewlett-Packard are increasing their training, to help suppliers manage EHS issues. They’re also using new tools to track performance.

Ann Condon, head of efficiency, stewardship and product environmental compliance programs for the GE supply chain, says the company found poor performance in China and India, among other countries.

GE partnered with NGOs to help build EHS management systems for suppliers. The company was a founding partner of the Environment, Health and Safety Academy, launched in China’s Guangdong Province in 2009. Pfizer, Honyewell and Walmart have also provided training materials for the organization, which has trained EHS managers and suppliers from hundreds of companies.

Walmart’s approach has centered on its Sustainability Index, launched in 2009 and since expanded to 700 product categories and 5,000 suppliers – up from the 200 categories and 1,000 suppliers announced last September.

That month, Walmart said it will work with suppliers to reduce fertilizer use on up to 14 million acres in the US by 2020. The company also said it’s working with suppliers to reduce or eliminate the use of about 10 chemicals in consumables products.

The Walmart Foundation gave a $2 million grant to launch The Sustainability Consortium in China as part of a number of supply chain initiatives it announced in 2012.

Meanwhile, HP says it has introduced a five-tier rating system based on audit results, and gives more business to suppliers that receive higher scores. The company is also working with the Electronic Industry Citizenship Coalition to develop an industry standard for reporting on supplier emissions.

Last September, HP announced plans to lower its first-tier manufacturing and product transportation-related greenhouse gas emissions intensity 20 percent by 2020, compared to 2010. It said was the first IT company to set a supply chain emissions goal.

Takeaway: Major companies including General Electric, Walmart and HP are innovating new approaches to managing the environmental impacts of their supply chains.

Tamar Wilner is Senior Editor at Environmental Leader PRO.