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Sustainability Product Index – A Walmart initiative

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Sustainability Walmart

One of the important events of 2009 for the Retail industry and Sustainability community was the launch of the Sustainable Product Index initiative by Walmart and the establishment of the Sustainability Consortium. The Sustainable Product Index is intended to be an open source worldwide standard of measuring the sustainability of a product.

The Sustainability Consortium is an independent group of scientists and engineers from leading academic research institutions around the world who engage with other leading researchers from the NGO, Governmental and Industrial sectors. The primary function is to develop the science to support the indexing of consumer products throughout all phases of the products life.

The initiative was announced by Mike Duke, president and CEO, Walmart at the July 2009 Milestone Meeting. Key discussion points:

On measurement
  • Retailer at hart, with engineering training (Alumni of Georgia Tech)
  • I like metrics, I like measurements, I like to set goals and measure results. I guess it comes with that qualitative measurement approach.
  • If you can’t measure it, you can manage it.
  • In some ways we have got measurements already, we think there is a need of much more in this area of measurement.
On customer expectations

Consumers have much higher expectations from retailer and suppliers:

  1. Savings. The Global Financial Crises brought on new expectations from consumers. Customers want to save money even more and they are smart about what and how they are spending.
  2. Transparency. The speed of information is higher. Greated transparency in the future is expected and will accellerate. If businesses are not transparent, they will not have the trust of consumers.
  3. Sustainability. World population is currently 6.7 billion, growing to over 9 billion by 2050 . We are depleating the natural resources of the world if consumer patters will be mantained or accelerate.
On the Product Sustainability Index

A global standard to be used across the world with all retailers, in all countries. Will help raise quality and lower cost, while enabling innovation across the supply chain.

1. Supplier Assessment

A 15 questions questionnaire will be provided to suppliers to evaluate therir approach to sustainability. The questions are dedived into four areas:

  • Energy and Climate
  • Natural resources
  • Material efficiency
  • People and Community

Piloted with the top 50 suppliers from the USA and gradually rolled-out globally to over 100,000 suppliers.

2. Lifecycle Analysis Database
  • Consortium of universities that will collaborate with suppliers, retailers, NGOs and government to develop a global database of information on the lifecycle of products – from raw materials to disposal.
  • Arizona State University and the University of Arkansas will jointly administer the consortium.
  • The company will also partner with one or more leading technology companies to create an open platform that will power the index.\
3. A Simple Tool for Consumers
  • Standard database available to tell customers about the sustainability index of they product they are purchasing.
  • The sustainability consortium will help determine the scoring process in the coming months and years.
Quotes

“The index will bring about a more transparent supply chain, drive product innovation and, ultimately, provide consumers the information they need to assess the sustainability of products. If we work together, we can create a new retail standard for the 21st century.”

Mike Duke, President and Chief Executive Officer, Wal-Mart Stores, Inc.

Walmart Sustainability Milestone Meeting, July 16, 2009

“I think from a business perspective there is another opportunity that Since the beginning of modern retailing in the US, there has never been a retail brand that’s transitioned from one generation to the next. This is our opportunity to connect with the next generation. By leading in sustainability and being able to deliver quality products at low prices, to be able to deliver our value proposition, we will connect with these consumers. We may never be cool, but we care and we can make a difference.”

John Fleming, EVP and Chief Merchandising Officer, Wal-Mart Stores, Inc.

Walmart Sustainability Milestone Meeting, July 16, 2009

Additional resources:

Retailer at hart, with engineering training (Alumni of Georgia Tech) I like metrics, I like measurements, I like to set goals and measure results. I guess it comes

with that qualitateive measurement approach. If you can’t measure it, you can manage it. In some ways we have got measurements already, we think there is a need of much more in this

area, of measurement.

Consumers have much higher expectations from retailer and suppliers.

1. Savings. The Global Financial Crises brought on new expectations from consumers. Customers

want to save money even more and they are smart about what and how they are spending. 2. Transparency. The speed of information is higher. Greated transparency in the future is

expected and will accellerate. If businesses are not transparent, they will not have the trust

of consumers. 3. Sustainability. World population is currently 6.7 billion, growing to over 9 billion by

2050 . We are depleating the natural resources of the world if consumer patters will me

mantained or accelerate.

Walmart Sustainability Index A global standard to be used across the world with all retailers, in all countries. Help raise quality and lower cost. Create innovation across the supply chain.

1. Supplier Addessment A 15 questions questionnaire will be provided to suppliers to evaluate therir approach to

sustainability. The questions are dedived into four areas: Energy and Climate Natural resources Material efficiency People and Community Piloted with the top 50 suppliers from the USA and gradually rolled-out globally to over

100,000 suppliers.

2. Lifecycle Analysis Database Consortium of universities that will collaborate with suppliers, retailers, NGOs and

government to develop a global database of information on the lifecycle of products – from raw

materials to disposal. Arizona State University and the University of Arkansas will jointly administer the

consortium. The company will also partner with one or more leading technology companies to create an open

platform that will power the index.

3. A Simple Tool for Consumers Standard database available to tell customers about the sustainability index of they product

they are purchasing. The sustainability consortium will help determine the scoring process in the coming months and

years.

“I think from a busines sperspective there is another opportunity that Since the beginning of modern retailing in the US, there has never been a retail brand that’s transitioned from one generation to the next. This is our opportunity to connect with the next generation. By leading in sustainability and being able to deliver quality products at low prices, to be able to deliver our value proposition, we will connect with these consumers. We may never be cool, but we care and we can make a difference.” John Fleming, EVP and Chief Merchandising Officer, July 2009 Milestone Meeting – Sustainability Index

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