Walmart to Create Green Label Index

During Walmart’s Sustainability Milestone Meeting today at its Bentonville, Ark., headquarters, the world’s largest retailer plans to tell more than 1000 suppliers that they must calculate and disclose the full environmental costs of making their products and allow Walmart to use the information in a rating system that shoppers will see alongside pricing and product information.

Walmart’s goal is to create a universal rating system that scores products based on environmental and social sustainability over their life span. The company will ask suppliers to answer a questionnaire by October covering topics such as waste generation, resource use, community involvement, water use and carbon dioxide emissions. Walmart will use the information to create a sustainability index label that may tell shoppers how much a product may contribute to global warming, whether it’s made of toxic chemicals and if its wood source is sustainable or not. It’s working with suppliers as well as the Environmental Defense Fund, the Sam M. Walton College of Business at the University of Arkansas and Arizona State University to create the index.

Eventually, the company hopes other retailers will adopt the indexing system, which it expects will take about five years to create. “We have to change how we make and sell products,” Michael Duke, Walmart’s president and ceo, told The New York Times. “We have to make consumption itself smarter and sustainable.”

How much the effort will cost suppliers is yet to be determined. “But you know, I think we’ve demonstrated time and time again, if you reduce packaging, if you reduce energy, the costs go down,” Walmart’s John Fleming, chief merchandising officer, told The Times.

The effort is the latest by Walmart to green is operations, if not its image. The company operates several environmentally designed stores housing such features as solar power, recycled materials and energy harvesting technologies. Its focused efforts on selling compact fluorescent light bulbs and in 2007, the company announced it would sell only concentrated detergents, which require less packaging and reduce shipping costs, while also holding the potential to reduce consumers’ water consumption.

Walmart also says that consumers, especially those born from 1980 to 2000, are taking environmental factors into consideration when making purchasing decisions.