Wal-Mart's CEO Announces Creation of Global Sustainability Index

by Worth Sparkman  on Thursday, Jul. 16, 2009 11:58 am  

Mike Duke, the new CEO of Wal-Mart Stores Inc., said the Bentonville retailer will lead in the creation of a global sustainability index with the end goal of greater transparency so consumers can make informed choices about the products they purchase.

Wal-Mart held a sustainability milestone meeting in Bentonville Thursday, the second one this year.
Duke was speaking to a group of its suppliers, associates and sustainability experts in a meeting that was broadcasted on the Internet Thursday morning.

The initiative will be a three-step progress process, Duke said, and take about five years to fully implement.

First, beginning almost immediately, Wal-Mart ask its top tier U.S. suppliers 15 questions about their business practices.

The questions, available here, will focus on four areas: energy and climate, natural resources, materials efficiency, and people and community.

For example, Duke said, the questionnaire will ask if suppliers know where 100 percent of their factories are and if they are measuring their greenhouse gas emissions.

“We see these questions as an important first step in assessing the sustainability of suppliers,” Duke told the group. “But for true transparency, we need an additional, much larger tool for assessing the sustainability of products.”

In the next step, Wal-Mart will help “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.”

Dubbed the Sustainability Index Consortium, Duke said Wal-Mart has provided the initial funding, but invites other retailers and suppliers to contribute.

The company will also partner with one or more technology companies to create an open platform to power the Index.  

 “It is not our goal to create or own this Index. 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,” Duke.

The third step and the ultimate goal of the index will be to translate the information and make it available to consumers.

“This will provide customers with the transparency into the quality and history of products that they don’t have today,” he said. “It will help put them in control and consume in a more sustainable way.”

“Our desire is for this to be a global standard,” he said. “Working together we believe we can shape the sustainability index into a very powerful tool” that will raise quality and lower costs.

“And it will make us even stronger businesses, bringing us ever closer to our customers and what they need to live better.”

 

 

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