Building the Sustainability Index
into our business
In 2009, we committed to leveraging our size and scale to help develop a global Sustainability Index, a new retail standard for the 21st century. Our goal was to improve the sustainability of our products by creating a more transparent supply chain, accelerating adoption of best practices and driving product innovation, while providing customers transparency into the products they buy.
The Sustainability Consortium
To fully grasp the progress made to date on the index, it is important to first understand the evolution of The Sustainability Consortium. The consortium has secured the membership of more than 90 organizations, among them many of our largest competitors, such as Kroger, Tesco, Best Buy, Safeway, Marks & Spencer and Royal Ahold.
It has established affiliations with leading nonprofit organizations, government agencies and a host of respected research institutions. In 2011, the consortium opened a European office at Wageningen University in the Netherlands, while establishing affiliations with a number of additional universities in Asia, Europe and Latin America.
This first-of-its-kind consortium is delivering research and measurement and reporting systems that are improving our understanding of sustainability in our products and suppliers and beginning to influence how we engage our suppliers around sustainability. The consortium continues to actively research leading issues. It identifies opportunities and develops key performance indicators to establish the "common language" necessary to evaluate product and supplier sustainability performance, while driving innovation where it matters most.
Walmart provided its more than 100,000 global suppliers with a brief survey to evaluate their own sustainability. The survey represented a key step toward enhancing transparency in our supply chain. Through the incorporation of the consortium's category key performance indicators, we are now able to ask more detailed questions on specific products than ever before.
By January 2011, we piloted these detailed assessments in six specific product categories. We used those results to create category scorecards, which allow our buyers to evaluate supplier performance against the biggest issues and opportunities across their products' life cycles. We will expand those six pilots to develop scorecards in up to 100 categories by the end of 2012 and have already created a new Sustainability Value Network (SVN) to engage the rest of our merchandising business in the process. These scorecards are being integrated into some of our core merchandising business processes, and we are developing buyer and supplier incentives to ensure we recognize those buyers and suppliers who are performing well, and to ensure sustainability is part of what it means to be a merchant at Walmart.
In addition to driving improvement across our supply chain and integrating this into our business, we believe the work of The Sustainability Consortium will one day allow us to engage our customers through industry-leading transparency into the sustainability of products. It will provide them with information about products in a simple, easy-to-understand manner, helping them save money while they help their families, and the world, live better.
"We believe we can influence other suppliers to adopt similar actions, creating a multiplier effect throughout the market."
Marcos Samaha, president, Walmart Brazil
Walmart Brazil: End-to-End program sparks ripple effect
With our size and scale, every innovation Walmart drives has the potential to create a positive ripple effect. That is a responsibility we take seriously, and a significant reason Walmart Brazil's End-to-End project is generating such buzz.
End-to-End was created three years ago to analyze the entire life cycle of select consumer products. At the time, many of our suppliers were unaware of the benefits that come from greener products. Walmart Brazil initiated a partnership with Cetea, Brazil's Packaging Technology Center, to study products — from the sourcing of raw materials to the disposal of waste.
To start, we selected 10 suppliers with the biggest potential to impact the market in specific categories. We challenged them to choose a top-performing product to be studied — end-to-end — by Cetea, at no cost. The 10 products included cooking oil, household cleaners, disposable diapers, beverages, fabric softener, bandages and our leading private-brand soap. We identified several opportunities and were successful in reducing packaging, incorporating the use of recycled materials and limiting water usage during production.
Another 13 products have since gone through the project, bringing the total to 23. Participating suppliers have experienced a significant increase in sales, confirming our customers have a thirst for environmentally responsible products. The results have caused a ripple effect across our supply chain with participating suppliers and their competitors initiating improvements to additional products in their assortments.