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11/14/2012 10:40 AM     print story email story  

Walmart Kicks Sustainability Up Another Big Notch

SustainableBusiness.com News

Last month we reported that Walmart would evaluate its buyers on the sustainable products they purchase as part of their annual performance review, in an effort to get more of those products to store shelves.

Now, Walmart has kicked that up a notch. At an event in Beijing, the company announced more initiatives that will green its supply chain worldwide.

By 2017, 70% of all products sold in the US will come from suppliers that use its Sustainability Index.

Right now, the Walmart Sustainability Index covers about 100 different categories such as apparel, electronics and toys, and  that number should double by the end of the year. Roughly 500 suppliers have gone through the evaluation process.

Next year, Walmart will start using the Sustainability Index to influence the design of its US private label brands.

That change will impact the company's supply chain partners and manufacturers around the world that contribute to the creation of those products, including China.

And the Walmart Foundation will grant $2 million to fund The Sustainability Consortium and assist it in launching in China. The independent research organization engages industries, universities and other experts to form a global network that improves sustainability in consumer goods and helps suppliers adopt those practices. Walmart will use the results to refine its Sustainability Index for use in China.

"The $2 million grant from the Walmart Foundation will support the Consortium and position us to help bring the best science and research to support the development of the green supply chain here in China and globally," says Kara Hurst, CEO of The Sustainability Consortium.

Since 2008, Walmart has been working to improve sustainability practices and the greenhouse gas footprint of its suppliers. Two examples of its success so far:

  • Nearly 95% its direct-import factories have received one of the two highest audit ratings for environmental and sourcing practices.
  • 195 factories have improved energy efficiency by 20%

"We will drive progress faster and scale our work to make factories more socially and environmentally sustainable, reduce energy and water usage, and eliminate harmful emissions into rivers and the air. We will also have deeper insight into how we can make manufacturing more sustainable for people and communities in China," says Mike Duke, President and CEO, Walmart Stores.

Walmart is also tackling packaging and its own energy consumption. 

With a goal of using 100% renewable energy, Walmart gets 4% of its energy from renewables right now and is the biggest corporate consumer of on-site solar energy. It has more than 150 solar installations and recently added its first on-site wind turbine. 

In September, Walmart switched on its biggest solar system to date, 3.3 MW on top of a million square-foot distribution center near Phoenix, Arizona and on parking canopies.

A 90 MW Texas wind farm supplies 15% of the energy for over 300 Walmart stores and Sam's Clubs, and in California, fuel cells supply energy to 26 stores.

The company has also made significant progress in waste management, keeping 80% of waste out of landfills last year. It saved $231 million through increased recycling and will save another $150 million this year.

Walmart is also promoting healthier foods and boosting purchases of locally grown produce, which will account for 20% of all produce in US stores within three years.

But these positive commitments continue to be overshadowed by the company's legacy of questionable labor practices. A strike is threatened next week for Black Friday.



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