First thoughts about the Wal-Mart sustainability index #WMTSust

Last week Wal-Mart announced during a webcast they will initiate a global sustainability index. Not only for Wal-Mart but open for competitors, suppliers, NGO’s and governments to join. The model hasn’t been revealed yet. Although the openness of the sustainability index suggest it might look like the Marine Steward Council or the Roundtable on Sustainable Palm Oil.

During the webcast Wal-Mart showed some interesting examples how they helped suppliers with the turn-around to become a more sustainable company, with a positive value proposition for all parties involved: Wal-Mart, the supplier, the customer and the environment.

  1. The Wal-Mart initiative will consist of 3 steps:Walmart will provide each of its 100,000 global suppliers with a survey of 15 simple, but powerful, questions to evaluate their own company’s sustainability. The questions are divided into four areas:
    – Energy and Climate
    – Natural resources
    – Material efficiency
    – People and Community
  2. Lifecycle Analysis Database
  3. A Simple Tool for Consumers to access and interpretate the data of the Lifecycle Analysis Database

Reactions on Wal-Mart sustainability index

Traditional Dutch media haven’t picked up the story yet, accept for Elsevier and De Telegraaf. Both did cover the story which led to a news items on FoodHolland news and MD Weekly.

I posted the news about the Wal-Mart initiative on several Dutch online communities where I’m active. The reactions until now are mixed. Although positive about the announcement, most reactions are skeptical on two points:

  1. Will Wal-Mart really become sustainable, they are not in any sustainable index themselves?
  2. Will Wal-Mart make the sustainability data really available in a reusable format?

Reactions on the sustainability claim

Wal-Mart isn’t in the SAM Sustainibility Index 2009. Also ASN-bank (one of the biggest Dutch ethical banks) decided a few years ago to sell their investment in Wal-Mart and remove it from their list of potential investments because of, amongst others things, the selling of fire arms. As far as my knowledge goes this decision sill stands.

Also there has been protests against the opening of new Wal-Mart stores and about labour conditions for Wal-Mart staff. After all, in a sustainable world shopping isn’t only about the best product for the cheapest price, it’s also about knowing that people working for a company and their suppliers all can earn a decent living.

So it will be very interesting to see if and when Wal-Mart expands it’s supply chain management to their own stores and live up to the standards they set for their suppliers.

Reactions on the open data

The data Wal-Mart wants to release to customers worldwide in the future is considered as very helpful and wanted. But it will depend on the way their consortium publishes the data it will live up those expectations. The data should be available in an open standard (like XBRL or XHTML) and reusable (through an open application interface (API), so web-companies can compete to make the best userinterface to serve customers worldwide.

This doesn’t have to take years to come to the market, as several mobile apps and augmented reality browsers are already coming to the market as we speak. Some futuristic looking concepts are discussed on sites like ReadWriteWeb. For example the wearable internet.

It will be interesting to see if Wal-Mart is able to take advantage of the innovation power of the social web community and people like Tim Berners Lee and his quest for raw data now to provide a web of linked data. If so that might speed up the realisation of Wal-Mart’s sustainability ambitions and earn them a place in indexes like the SAM Sustainability Index or other sustainable indexes.

What’s my verdict?

In my opinion the announcement by Wal-Mart is a major one and one that I’m very positive about.

The idea that it may take another 3 to 10 years to get labels on consumer products sounds pretty slow to me. On the other hand: Wal-Mart is a huge company and change takes time. They are in a very good position to reform their supply chain, as they are huge in terms of revenues and customers served. Giving them the market power to really transform their supply chain to a more sustainable one. I do hope other retaillers will join the initiative and that the data will be available to consumers faster.

So what do you think of Wal-Mart’s sustainability ambitions?

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