![]()
While manufacturers might have expended hundreds of millions of
dollars in lobbying or campaign contributions to fight similar
efforts by governments, they haven't been complaining publicly at
all about such mandates from earth's biggest retailer.
Andrea Thomas, senior VP-sustainability for Walmart, the
flagship U.S. retailer of the Walmart Stores, which also includes
Sam's Clubs and numerous chains overseas, said it's really
consumers setting the agenda, not the retailer. "Our customer is
becoming much more articulate about needs in this space," she said.
"The best way to do it is to work together as an industry."
Walmart, however, clearly has been out in front of the rest of
the industry on many issues. And unlike a government, it isn't
bound by constitutional due process that bogs regulations sometimes
for years. No Tea Party representatives are trying to withhold
funds for its greenhouse-gas reduction plans. And with billions of
dollars at business at stake for its biggest customers, Walmart
wields a bigger stick than any fines a government can impose.
To be sure, Walmart notes that its supplier-sustainability
assessment, for example, isn't mandatory. Then again, it also
notes: "We do intend to reward those suppliers who have measured
impacts and show progress toward meeting stated reduction
goals."
But for all the advantages of being the biggest retailer, even
Walmart faces some challenges, particularly on what may be its most
ambitious effort-a Sustainable Product Index that distills the
complexities of determining which products and companies are the
greenest into comprehensible ratings for consumers.
More than 19 months into the process, the index remains a work
in progress. The retailer at the outset turned development of the
Sustainable Product Index over to the Sustainability Consortium,
led by academics at Arizona State University and the University of
Arkansas and now with 65 members in total, including most of the
major packaged-goods marketers, a couple of other retailers
including Ahold and Marks & Spencer, and the U.S. Environmental
Protection Agency and World Wildlife Fund.
Committees are developing pilot indexes for laundry detergent,
laptop computers and strawberry yogurt among other things. But
while some pilots are expected to begin this year, in a December
Q&A on the Facebook page of the Business Civic Leadership
Center, Walmart Sustainability Director Jeff Rice said some
categories may not have indexes for consumers for at least five
years because of the complexity of getting, analyzing and reporting
data.
"I'm feeling pretty good on the progress," said Ms. Thomas. "We
really took the approach that we needed to have not just the
retailers and manufacturers but also a place for academics and
[non-government organizations]. If we can get all the right people
around the table to begin with, it may be slower upfront but it
won't be so rough as we start to get the data in."
Walmart in January also sharpened its focus on nutrition,
aligning itself with Michelle Obama's anti-obesity efforts and
pledging to reduce sodium, sugar and fat by 2015 while developing
criteria for a front-of-the-package seal to identify healthful
foods. There, however, the retailer raised some questions about
whether it's really going much beyond what was already being
done.
Ms. Thomas acknowledged that many of the targets are similar to
those set by major suppliers in recent years, but said not all
industry players had set such targets.
With the healthful-food seal, Walmart rankled some other members
of a Food Marketing Institute committee it has served on, which,
along with the Grocery Manufacturers Association, proposed a
similar seal in October, said Burt Flickinger, principal of the
consulting firm Strategic Resource Group.
The FMI/GMA seal was set to appear early next year. Walmart
plans to get is out by the end of this year.
"We're not trying to create a proprietary solution," said Ms.
Thomas. "We're just trying to solve a problem that our customers
have articulated to us." She said Walmart's effort is meant to be
complementary to the industry effort.
While Walmart has led the sustainability charge, almost every
major company now has sustainability criteria in its procurement
guidelines and is subject to similar criteria from customers, said
Jim Nail, principal analyst with Verdantix, a market-research firm
that focuses on sustainability, and principal of Speaking
Sustainably, a sustainability communications firm.
"And it's driving the companies nuts," he said, "because every
company has a different way of approaching it."
Clearly without Walmart acting as referee, though, some things
would be less likely to happen. When Procter & Gamble Co.
concentrated some of its cleaning products in the 1990s, it lost
significant share when competitors didn't follow suit and its
products looked more expensive on the shelf as a result. Walmart
has prevented that in recent years, pushing compaction of liquid
and powdered detergents first by giving triple-concentrated All
detergent favorable merchandising treatment and later by saying it
won't buy the non-concentrated versions after a cutoff date,
generating major material and energy savings.
Environmentalist Paul Hawken envisioned such moves in his 1993
book "The Ecology of Commerce" where he argued that corporations,
not governments, would have to drive environmental change because
governments lack the resources or global scope for the job.
"That was probably the most depressing book I'd ever read," Mr.
Nail said, because at the time companies defined environmental
responsibility mainly as compliance with government regulations.
"But Hawken was quite visionary," he said, "and businesses are
starting to catch up."
Most major marketers in the Fortune 1000 now are on the
sustainability bandwagon, but echoing recent statements by an
Environmental Defense Fund executive, he said, "the thing we now
have to worry about is the next 50,000 companies."
Influencing them, he said, may be where Walmart's efforts are
most useful.
