Walmart to Drive Sustainability Deeper into Global Supply Chain

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October 25, 2012

Walmart has depended its commitment to a sustainable global supply chain through a series of initiatives in the United States, China, and around the world.

Mike Duke

At an event in Beijing with government officials, non-governmental organizations (NGOs), academics, suppliers and company associates, Walmart said it will use the Sustainability Index to design more sustainable products, make its global supply chain more socially and environmentally accountable and responsible, and encourage merchants to make sustainability a bigger part of their day-to-day jobs.

“The impact of these commitments will be global and make a difference with products sold around the globe,” said Mike Duke, President and CEO, Walmart.

The additional initiatives announced at today’s event will build on the broader sustainability goals Walmart set at the China Sustainability Summit in 2008. The commitments outlined today include:

• By the end of 2017, Walmart will buy 70 percent of the goods it sells in U.S. stores and in U.S. Sam’s Clubs only from suppliers in the United States, China, and around the world who use the 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.
• Beginning in 2013, Walmart will use the Sustainability Index to influence the design of its U.S. private brands products.
• Walmart will change the way its key global sourcing merchants are evaluated so that sustainability becomes an even more important part of buyers’ day-to-day jobs. Beginning in 2013, these buyers will join key buyers in Walmart U.S. and Sam’s Club who already have specific sustainability objectives on their annual evaluations.

In addition, The Walmart Foundation will grant $2 million to fund The Sustainability Consortium (TSC) and assist in its efforts in launching TSC in China. TSC is an independent research organization.

Using the Walmart Foundation grant, TSC China will engage industries, universities and other experts to form a global network of leaders improving sustainability in consumer goods, and will provide tools and resources to help suppliers become more sustainable and competitive. Walmart will use the results of TSC's independent work to refine its Sustainability Index for use in China.

At the 2008 Sustainability Summit, Walmart announced ambitious goals to improve sustainability practices in its operations in China that would have benefits throughout the supply chain. Examples of the success of that work include that nearly 95 percent of direct-import factories have received one of the two highest audit ratings for environmental and sourcing practices. Furthermore, 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.

“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,” Duke said. “We will also have deeper insight into how we can make manufacturing more sustainable for people and communities in China.”

Sustainability Index Update
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.

Walmart has rolled out the Sustainability Index, which measures product sustainability using metrics developed by TSC, to more than 100 categories. Merchandise buyers from Walmart U.S., Sam’s Club, Walmart.com and Walmart Canada are now using the Sustainability Index in regular buying decisions.

More than 500 suppliers are participated in the Sustainability Index, representing an average of 70 percent of sales within the categories. Walmart expects to expand the use of the Index to an additional 100 product categories by the end of 2012.

Read These Related Articles:

• Walmart Passes 2012 Sustainability Index Goal
• Target and H&M Added to Dow Jones Sustainability Index
• Major Retailers and Clothing Brands Launch Sustainable Apparel Coalition
• Walmart Sustainability Exec Shares His Company's Vision

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