2. Walmart Sustainable Product organizations, GHG targets, and reporting
Index to CDP. Carbon Disclosure Project has
Walmart, a retail giant and largest become one of the largest platform in the
world for the organizations to disclosure
company in the world by any standards,
announced plans to develop a worldwide climate change related information. Thus
Walmart urges its suppliers to share their
sustainable product index. It is expected
climate change related strategies through
to lead to higher quality, lower costs, and
measure the sustainability of products. CDP. Scoring is done based on the
responses by the organizations on
Walmart states that the need for such
index is due to the increasing pressure on aforementioned fronts.
- Natural resources use
natural resource, upcoming environmental
Natural resource section stresses on
regulations, and impact on supply chains
by climate change will increase the cost of whether suppliers have established
sustainable procurement mechanism and
the products in future. Working together
with supplier in product design, third party certification of products and
systems for sustainability assurance.
development, manufacturing, and
- Material efficiency
transportation by adopting sustainable
practices can make them future ready. Material efficiency section contains
questions on amount of solid waste
Since Walmart is known for selling the
huge range of the product at affordable organization generates and steps taken to
reduce it. Also it asks about the water
prices, it is indeed necessary for them to
footprint of the organization and how it is
look at the sustainable sourcing of the
product in future. working towards reducing the same.
- People and Community
Walmart has envisaged 3 steps in this This section focuses on social
compliances by suppliers, community
direction. These steps are
development activities in the market they
1) Supplier Sustainability Assessment operate, and knowledge about their own
suppliers.
The firs step is reaching out to its 100,000
global suppliers and urging them to adopt
2) Life-cycle Analysis Database
sustainable practices in their value chain.
Second step is creation of global database
Walmart will send survey questionnaire
annually to evaluate these supplies. The of information on the life-cycle analysis of
products - from raw material to disposal.
questions will be grouped in -
- Energy and Climate This will be achieved through creation of
consortium of universities that collaborate
This section contains questions that are
with suppliers, retailers, NGOs, people,
centered on the GHG footprint of the
3. and governments to develop this through cost cutting, meeting the growing
database. Such database helps in regulatory requirements, offering wide
identifying the environment, social and range of products to its customers, and
economic impact of the product during is managing suppliers more effectively.
lifetime. Information collected through this survey
on continual basis helps Walmart
3) Simple tool for customers understand how its suppliers are stacked
The final step of the index is to provide up. Survey data can highlight the
customers with product information in a inefficiencies in supplier’s the system and
simple and convenient way to understand value chain. For example, GHG footprint
the product’s sustainability rating and and energy intensity can show the
about LCA of the product. Walmart is supplier’s energy bills. Now Walmart can
developing various tools for this purpose. compare the data from two different
Customer can use these tools to make suppliers who supply similar product and
right buying decisions and consume the assess who is more efficient in terms of
product in more sustainable way. energy intensity. Walmart can then work
with the less efficient supplier to adopt
Beyond Sustainability best practices from its peers and invest in
Though the sustainability initiatives help energy efficiency, thereby reducing the
restore or sustain social, economic, and cost of the product. Same logic can be
environmental balance, its futile exercise applied in case of waste generation, water
for a profit making organization unless it usage, packaging, and material efficiency.
doesn’t not bring in tangible commercial Eventually Walmart can reduce the waste
benefits or long run intangible benefits in its value chain and thereby reduce the
which eventually help organization make cost of the product and thus remain
more profits in sustainable way. In long competitive. Also people and community
run, sustainability initiatives should help engagement earns social goodwill and
the organization consolidate its position in trust.
the market, gain goodwill of the
stakeholder, assure investors about long Road ahead for the suppliers
term business viability, and help increase Suppliers need to gear up for this
profits. The initiatives at Walmart are challenge and become more efficient
designed keeping the same objectives in within the framework set up by Walmart.
mind. Ongoing engagement with suppliers There is proposed reward for the suppliers
under sustainability programme helps who have better sustainability index.
Walmart sustain the market share in long Besides the reward, here is the business
run by making products more affordable opportunity for the suppliers to
4. differentiate their products in the market.
Measure
Study by consulting firm BCG shows that Organization can start measuring their energy
the segment of environment conscious intensity, carbon footprint, waste generation,
consumers is set to grow in future. These water footprint, and social and environmental
impacts. Various standards and procedures
consumers will fuel the demand for the
are available to facilitate the same.
products having low carbon footprint,
lower environmental and social impact,
and consume less energy while in use. Assurance
Thereby suppliers having higher product The measured data needs to be assured by
third party verification. Various certifications
index on sustainability can lure this
are available for the purpose. Some of them
segment of customers. Adopting the are listed below.
sustainability practices leads to cost ISO14064 - Corporate GHG Management
cutting, production innovation, and thus System
PAS2050 - GHG over LCA of the product
increase in profits.
PAS2060 - Carbon neutrality
Supplier’s can follow the steps depicted in SA8000/ISO26000 - Social Accountability and
the schematic to initiative the actions to Responsibility standard
respond to the survey questionnaire and Sustainable Development Reporting - SDR
based on GRI framework
begin journey towards sustainability in true
EN16001 - Energy Management Standard
sense.
Assess
The various standard discussed above can
assist the organization to monitor and assess
energy efficiency, GHG, waste generation,
waster footprint, and sustainability. Continual
assessment help in eliminate the waste in the
system and become more efficient.
Disclose
Organizations can disclose its progress to
various stakeholders such as customer,
investors, suppliers, and society at large
through various platforms such as CDP.
5. Agneya Carbon Ventures is a focused Carbon,
Renewable Energy, and Sustainability Management
consulting firm. We provide services in the wide
spectrum of carbon management, Renewable Energy
projects, and Sustainability domain helping our clients
identify and mitigate the risks, exploit the opportunities,
and thus tackle the environmental, social, and
economic challenge.
For further details contact us at
Indrajeet@agneya.in / +91-9028788430
kedar@agneya.in / +91-9665407848
