Enviromedia Social Marketing

I’ll admit, I don’t shop at Walmart too often. And for a long time, I’ve been personally critical of their practices. But one thing you can’t deny anymore is that Walmart is becoming the new champion on the environmental side of sustainability issues. Even more than that, they’re using their massive market share to nudge their immense supply chain toward joining them.

Walmart’s Sustainability Index will, in its time, be a game changer, but not for a little while. We were part of the first step – the sustainable packaging scorecard. When that launched, we were helping TetraPak USA. TetraPak had a lot to offer related to what Walmart called its “seven Rs of packaging.” From a very favorable packaging ratio and recyclability to its use of renewable resources, TetraPak (think juice boxes) scored very well.

At the time in 2006-07, it wasn’t clear where Walmart was headed. But with the new Sustainability Product Index, things are coming into focus.

For now, the Index looks like it will be based on a set of 15 simple questions, which made it to the public in July. They’re like a weed-out class in college – if you can’t hack it, you’re in a lot of trouble down the line.

So where is all of this headed? If you look at statements by insiders like Matt Kistler, the senior VP for Sustainability, the data from the index seems destined for two main purposes:

1. To move their supply chain to either get green or get out

2. To provide their customers with a simple system to understand what is green and what is not

On the first front, suppliers take note: it’s the answers behind your answers that interest Walmart. If you can’t address what they’re asking, you are going to be in some trouble. In fact, it’s happening already. Take the case of BPA. Walmart has stopped selling baby bottles that contain the endocrine disruptor, even though both US and European regulators still allow it.

On the second issue, time will tell. One solution may be for Walmart to simply eliminate such products from its shelves. That’s not good news for those who don’t score well.

Another approach might be to let the consumer choose by providing some sort of labeling. Stores already do a basic version of this – providing “green products” end-caps and the like, but the data Walmart will generate might relegate the also-rans to the back corner of the store.

Either way, Walmart is in a position to control the direction – not just for themselves, but likely for all retailers.

Tags: retail, supply chain, sustainability, sustainability index, TetraPak, Wal-Mart

This entry was posted by Steve Roberts on Tuesday, September 15th, 2009 at 11:10 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.