Walmart Hops on the Eco-Label Bandwagon
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Once again, Walmart is taking a nascent movement and scaling it to a level never before seen. Much as the company introduced compact fluorescent light bulbs to many who had never seen them before, Walmart is doing the same for eco-labels.
As we discussed in a previous entry (See: “To Bury, or Not to Bury, That is the Question,” other companies such as Timberland jump-started the practice practice of telling consumers how their products are made. But with the reach of the world’s biggest retailer, this initiative by Walmart is a game changer. As reported in the NY Times, the tags on the company’s products will carry information such as its carbon footprint, the gallons of water used to create it, and the air pollution released in production.
“Nobody else could pull this off,” said Michelle Harvey at Environmental Defense Fund, one of the groups involved in the creation of the index.
Walmart is bringing together academics, suppliers, and environmental organizations to help the company develop an electronic indexing system that scores products on how environmentally-friendly they are. From the amount of raw materials mined, to the pesticides sprayed on the crops, these new labels will revolutionize how customers think about the products they buy.
We realize that not everybody is going to be closely examining the carbon footprint of a pair of cotton socks, but environmental watchdogs sure will be. For the first time, there will be easily-available information that can be analyzed and compared. Putting ingredient labels on food was an extraordinary step for the industry in 1990, and this is the next step in providing customers more transparency in how their purchases arrive to the marketplace.
Wal-Mart’s goal is to have other retailers eventually adopt the indexing system, which will be created over the next five years. “The last thing a supplier really wants is when you’re doing a separate index for every retailer,” said Tim Marrin, associate director of external relations for Procter & Gamble. “Walmart has invited the Targets, the Costcos, the Tescos of the world,” he said, “to come up with a solution so that there are not 5, 10, 15, 20 different standards that retailers are implementing in their markets.”
“The first question is always, ‘It’s going to cost more,’ ” John E. Fleming, Walmart’s chief merchandising officer, said in an interview this week. “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 plans to begin by asking its more than 100,000 suppliers around the world to answer 15 simple questions about the sustainable practices of their companies. Questions include “Have you set publicly available greenhouse gas reduction targets? If yes, what are those targets?” The largest United States suppliers will be asked to respond by October. Walmart said suppliers that choose not to participate would not be penalized, but warned, “then they’re probably less relevant to us.”
“These younger consumers, they care deeply about this regardless of what happens in the economy,” Mr. Fleming said. “When I go around to colleges and universities to recruit, sustainability is tops on their list. So I think this will help us build a better business model.”
Tim Woodall at FD Element