Wal-Mart has big hopes for a new effort to develop eco-ratings for products it sells — one that goes far beyond its own stores.
“We see this as a universal — this is not a U.S. standard,” Wal-Mart Stores Inc. President and CEO Mike Duke told a gathering of more than 1,500 suppliers, nonprofit groups and company staffers at the giant retailer’s headquarters in Bentonville, Ark. “Across the world, this standard would work across all retailers, all suppliers.”
The meeting was intended to provide some details of Wal-Mart’s sustainability efforts, starting with the ratings that company officials hope to develop in the next few years.
Wal-Mart’s massive size gives it tremendous influence among makers of all kinds of consumer products — muscle that gives its effort a chance for wider adoption that other retailers might not have. The move also comes amid discussions on Capitol Hill about the possibility of U.S. environmental labeling regulations.
Shoppers won’t see green ratings on products for several years, and how much stock they’ll put in the ratings is an open question.
C. Britt Beemer, chairman of America’s Research Group, which surveys shoppers across the country, said shoppers won’t be willing to pay any more than 10 percent more for something that is eco-friendly.
Duke said the effort would involve three steps.
First, he said, Wal-Mart will send suppliers a set of 15 questions, Duke said, about corporate sustainability.
For example, the questions include “Have you measured your corporate greenhouse gas emissions?” and if the supplier has, what those figures are.
Next, Duke said, Wal-Mart will help create a consortium of universities to collaborate with governments, suppliers and retailers in developing the sustainability index.
The consortium will work with suppliers to assess each product’s impact, from the use of raw materials through the potential for recycling.
The final step, Duke said, will be making the information available to customers in the form of index numbers “to tell customers about the sustainability of a product that they’re purchasing.”
Duke’s call to competitors to embrace the initiative met with a wait-and-see response from at least one rival — Target Corp.
“We are not part of their efforts currently,” said Amy Reilly, a Target spokeswoman, noting that the discounter already has been focusing on sustainability. “We have to take a look at it.”
As details about the sustainability effort emerged on several Web sites this week, questions were raised about costs.
“Suppliers are going to have to absorb the cost increases,” retail industry consultant Burt P. Flickinger III said Wednesday.
However, Wal-Mart focused Thursday on the possibility that development of the sustainability program would ultimately result in greater production efficiency, actually lowering costs.
One example provided was a private-label sour cream sold only at Wal-Mart. A video told of how electricity generated by burning methane from the manure of cows at a dairy farm in upstate New York was being used to reduce energy costs at the farm.
A consortium of about 12 universities has already started to gather scientific data and set new design standards for Wal-Mart’s push.
Michele Harvey, a representative of the Environmental Defense Fund who attended the meeting at Bentonville, was asked by Duke what the next step should be.
“What’s next is not only making the data available, but showing that you’re driving the numbers down,” Harvey said.