Friday, August 7, 2009

Can Wal-Mart Be Sustainable?

Recently, Wal-Mart has been rolling out plans for what it calls a sustainability index — a measure of how green the products it sells really are. It is asking each of its suppliers, an enormous list of businesses, 15 questions about the life of their products from manufacturing through disposal: questions about greenhouse gas emissions, social responsibility, waste reduction initiatives and water use.

It is a sound idea. And probably a very good marketing tool. Given Wal-Mart’s huge purchasing power, if it is done right it could promote both much-needed transparency and more environmentally sensitive practices.

Wal-Mart has already created a Sustainability Index Consortium, which will include environmental groups and other nonprofits, universities and businesses. The consortium will create the criteria for the index, and will share with Wal-Mart the task of building a product-by-product database measuring the environmental impact of each product’s life cycle.

Wal-Mart seems aware that the success of its effort to reveal the environmental transparency of its suppliers will depend on the transparency of its own efforts — including the degree to which it collaborates with critics.

The company plans to do more with the index than simply using it to guide its own purchases from suppliers. This database could inform consumers as well. To that end, Wal-Mart hopes to put a readable version of it in every aisle so that consumers can gauge the environmental impact of their purchases.

Wal-Mart has done consistently well by selling at low prices. Historically, however, cheap goods have often reflected careless and unsustainable environmental practices — clear-cutting entire forests, for instance, which is cheaper than selective logging. If Wal-Mart successfully combines cut-rate prices with high-class environmental stewardship, other businesses should follow.

Source: The New York Times - Editorial - August 7, 2009