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The influence of Walmart has long been acknowledged; as the world’s largest retailer, it can even drive suppliers to focus on their environmental impact. By mandating that suppliers measure the environmental footprint of each of their products, Walmart may change the way retail supply chains function.

Many companies talk a good game when it comes to sustainability, but no universal rating system exists to measure their impact or hold companies accountable for their claims. Walmart aims to create metrics that look like nutrition labels, such that consumers can compare two products side by side and determine which has more “fat.” The proposed index would balance various sustainability issues, including emissions, water conservation, and waste reduction.

To develop the metric, Walmart has sent its more than 100,000 suppliers a 15-question survey about their sustainability practices, asking, for example, “Have you set publically available greenhouse gas reduction targets? If yes, what are those targets?” These efforts should influence not only Walmart’s vendors, products suppliers, and customers but also the rest of the retailing industry, if history is any indicator. Ever wonder why detergents all seem to be concentrated? Walmart decided to sell only concentrated detergents, because they use less packaging and require less water per load. The trend exploded thereafter, essentially due to Walmart’s decision.

Younger customers already claim that they make purchase decisions based on the amount of harm the product causes to the environment. Walmart is working to plan ahead to keep this generation satisfied with its products’ prices, quality, and consideration for the environment.

Discussion Questions:

  1. Why is Walmart planning to require suppliers to attach labels that document the environmental impact of their products? 
  2. How might such labels affect your purchasing behavior?

Stephanie Rosenbloom, “At Wal-mart, Labeling to Reflect Green Intent,” The New York Times, July 16, 2009.