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Walmart Launches The Sustainability Consortium in China, Sets Supplier Targets

Walmart today announced a series of sustainable supply chain initiatives including a $2 million Walmart Foundation grant to launch The Sustainability Consortium (TSC) in China, and a target for suppliers to use the company’s Sustainability Index.

Walmart pledged that, by the end of 2012, it will buy 70 percent of the goods it sells in US stores and in US Sam’s Clubs only from suppliers that use the Sustainability Index to evaluate and share the sustainability of their products. This change will involve suppliers who produce goods in categories where the index is available.

Additionally, beginning in 2013, Walmart will use the Sustainability Index to influence the design of its US private brand products, the company said. Also beginning in 2013, Walmart says it will add specific sustainability objectives to its global sourcing merchants’ annual evaluations.

Today’s initiatives build on the sustainability goals Walmart set at its China Sustainability Summit in 2008, the company says. Since announcing those goals almost five years ago, Walmart says about 95 percent of direct-import factories have received one of the two highest audit ratings for environmental and sourcing practices. Additionally, 195 factories have improved their energy efficiency by 20 percent as of July 2012, and the top 200 factories are expected to improve their energy efficiency by 20 percent or more by the end of 2012, according to the company.

Walmart set a goal in 2009 to develop a sustainability index to improve sustainability across the consumer goods industry. TSC developed a reporting system and measurement tools for Walmart, and other members of the consortium, to evaluate products and determine supplier sustainability performance.

The company has since rolled out the index, which measures product sustainability using metrics developed by TSC, for more than 100 categories. More than 500 suppliers participate in the sustainability index, Walmart says, representing an average of 70 percent of sales within the categories the company is currently evaluating.

Last month, Walmart said it had already met its goal to roll out the scorecard to buyers in more than 100 categories, and will add another 100 categories by the end of the year, with an additional couple hundred next year. Its original goal was to have 100 categories by the end of 2012.

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