Ethical Performance
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Walmart unveils plan for social labels on goods

September 2009

The world’s largest retailer has announced plans to develop a sustainability labelling system for all the products it sells.

Walmart is undecided what form the labelling will take, but it could be based on scores from one to ten or some kind of colour coding, and it’s main aim will be to make it easier for customers to factor social and environmental issues  into their purchasing decisions.

It says the system may take several years to fully develop, but will ‘provide customers with product information in a simple, convenient, easy to understand rating, so they can make choices and consume in a more sustainable way’.

A consortium of universities, suppliers and non-government organizations is to be set up to help devise the scoring process. The first step will be to send out assessment forms to each of Walmart’s 100,000 global suppliers asking 15 basic questions about their sustainability.

Among topics to be addressed will be greenhouse gas emissions, the location of factories, water use, evidence of ‘social compliance’ systems at supplier factories, and figures on community investment.

Walmart, which runs 7900 stores in 15 countries and has an annual turnover of more than $400billion (£248bn), will ask its top tier US suppliers to complete the survey by 1 October, with other deadlines to be decided for suppliers outside the US on a country-by-country basis.

Once the survey answers are collated, the advisory consortium, to be jointly administered by Arizona State University and the University of Arkansas, will work on developing a database of information on product lifecycles.

Walmart will provide the initial funding for the consortium, and will look for ‘one or more leading technology companies’ to collate the data into a ‘sustainability index’ of the products it sells.

The index will then be used as the basis for drawing up a labelling system for products sold in Walmart stores. ‘How that information is delivered to consumers is still undetermined, but it could take the form of a numeric score, colour code or some other type of label,’ it said. ‘The consortium will help determine the scoring process in the coming months and years.’

It is understood that other US retailers, including Best Buy, Costco, Kroger, and Target, are being encouraged to get involved.  

Joel Makower, senior strategist at GreenOrder, a US-based sustainability consultancy, said Wal-Mart could be credited with engineering ‘a bold move, one that stands to raise the bar on sustainability and transparency’. But he cautioned that the process will mean a lot of work and that a labelling system will take several years to develop.  

‘Some Walmart staff have told me privately that the company wanted to get something out there, however imperfect, and improve it as it got real-world use,’ he said. ‘That’s admirable, albeit risky, [and] underscores how the company has been addressing most sustainability issues over the past three years: set a big goal, rally the best minds, make some choices, put it out there, and refine.’

Walmart | Global | Product Responsibility

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