On the 16th of July Walmart rallied hundreds of suppliers to present their latest initiative: the "Sustainability Index". Walmart enters the world of "sustainable consumption": it has decided to create "a new retail standard for the 21st century" and all its suppliers (brands as well as sub-contractors) will have to adapt.
Walmart bases this on three social facts which will guide their strategy from now on:
- The economic crisis has led consumers towards a new approach to spending ("a new normal"): "they are getting smarter about saving money".
- In our era of growing social networks, the Internet and instant (and shared) information, consumers demand transparency: there can be no confidence without transparency.
- The world population is growing while its resources continue to decrease. While more and more consumers in developed and emerging countries want a better lifestyle ("live better"), access to the middle class standard of living - with increasing pressure on energy and waste accumulation.
As Mike Duke, Wal-Mart CEO, explains: "What this does mean is that we have a responsibility to our customers and to society to keep the "live better" part of our mission relevant in a changing world".
The "Sustainability Index" is the result of this strategic reflection. It will consist of 3 stages:
- Wal-Mart is going to ask its 100 000 suppliers to answer 15 questions (Téléchargement Sustainability_Product_Index_1 ) concerning the sustainability of their practices (the major U.S. suppliers are given a very short time in which to answer - until Oct. 1), on 4 subjects : reduction of energy costs and greenhouse gas emissions / waste reduction / accountable sourcing procedures and certifications / ethical and accountable production.
- Wal-Mart is creating a consortium of universities ("Sustainability Consortium") to associate with suppliers, distributors, NGOs and government agencies to build a database on product lifecycles. This information will be available to EVERYONE on an open platform.
- The information collected will be translated into a simple tool to inform consumers about the sustainability of the products they consume.
This initiative is remarkable from three points of view:
- It is a concerted effort: Walmart invites all stakeholders to join in and share information - and eschew the traditional distributor logic. The initial list of the parties participating in the "Sustainability Consortium" is impressive: Procter & Gamble, Cargill, Colgate-Palmolive, General Mills, Henkel, Monsanto, PepsiCo, Johnson, Tetra Pack, Tyson, Unilever, Waste Management, Alberto Culver, Clorox, ... The only ones missing are the European and Asian groups.
- It is global: Walmart sees this project as universal.
- It throws up new and redoubtable questions that the brands will have to answer: responsible production, responsible sourcing, reduction of waste, etc.
Decidedly the 21st century will be exciting! As a bonus I offer you the video of the day:
