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sustainability © Bob Jacobson/Corbis

Extra7/16/2009 12:01 AM ET

Wal-Mart to require 'green' labeling

The retailer is asking suppliers to assess the environmental costs of making their products. The data will be used to devise 'green' ratings that will guide shoppers.

By The Big Money

PepsiCo (PEP, news, msgs) buys lots of renewable energy, while a Coca-Cola (KO, news, msgs) plant recycles plastic bottles. Should environmentalists drink Pepsi or Coke?

Dell (DELL, news, msgs) is "carbon neutral." Hewlett-Packard (HPQ, news, msgs) says it designs for the environment. Whose laptops are more "green"?

So many choices, so little reliable guidance: Clorox's (CLX, news, msgs) Green Works or Seventh Generation? Local or organic strawberries? Paper or plastic? Who's to say?

Wal-Mart, that's who.

The giant retailer ($406 billion in revenues in 2008) is developing an ambitious, comprehensive and fiendishly complex plan to measure the sustainability of every product it sells.

Wal-Mart has been working quietly on what it calls a "sustainability index" for more than a year, and it will take another year or two for labels to appear on products. But the company's grand plan -- "audacious beyond words" is how one insider describes it -- has the potential to transform retailing by requiring manufacturers of consumer products to dig deep into their supply chains, measure their environmental impact and compete on those terms for favorable treatment from the world's most powerful retailer.

Wal-Mart intends to announce the sustainability index at a meeting today at its corporate headquarters in Bentonville, Ark., to which hundreds of suppliers, academics, environmentalists and government officials have been invited. There, the company will unveil a sustainability consortium led by the University of Arkansas and Arizona State University that will provide scientific research to support the effort.

Faculty at Duke, Harvard, Stanford, the University of California at Berkeley and the University of Michigan have been involved in planning the index, but they haven't yet agreed to join the consortium, in part because some college administrators are skittish about working with Wal-Mart.

Consumer-goods companies Procter & Gamble (PG, news, msgs), General Mills (GIS, news, msgs), Tyson Foods (TSN, news, msgs) and Unilever (UN, news, msgs), among others, are partners in the consortium. And competing retailers including Costco Wholesale (COST, news, msgs), Target (TGT, news, msgs) and Kroger (KR, news, msgs) have been invited to join. This is, in other words, a very big deal.

Wal-Mart declined to discuss the index in advance of its meeting. So did other retailers. But details are trickling out.

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Medical worker © Corbis
Nation's retailers split over health reform
The National Retail Federation is rallying its 2,500 members in opposition to Wal-Mart's support of a federal mandate for employer-funded health insurance. (July 13)
"Bringing clarity to this question of what is more sustainable is a key role for Wal-Mart," said Rand Waddoups, senior director of business strategy and sustainability at Wal-Mart, in an interview at a GreenBiz.com conference in May.

"Imagine one day when every product on the shelf has behind it enough information from a life-cycle-thinking perspective that allows us to be much, much more intelligent about how we're buying," he said. "And really, in the end, eventually, what consumers should be."

Continued: Get the ball rolling

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Thursday, July 16, 2009 6:57:43 AM
So will this green labeling apply to the billions of dollars worth of items they buy from communist/capitalist China also.
Thursday, July 16, 2009 6:59:06 AM
This is an incredible idea.  Awesome, really.  Imagine the overall impact if all of Walmart's customers (and possibly Target, Costco et al) made even a slight shift toward more "green" purchases.  The sum of these improvements could be huge.  This could end up being a really powerful demonstration of the total impact of each person just pitching in a little bit to make better choices.
Thursday, July 16, 2009 7:01:12 AM
In response to Hershbar -- hopefully "YES" and the beauty of that is some of those products will be unveiled as horribly bad for the environment causing a dip in sales in favor of more "Green" (and hopefully even locally made) products.
Thursday, July 16, 2009 7:01:54 AM

No ,,Thats Red labeling

Thursday, July 16, 2009 7:03:30 AM
The people who make those "made in china" stickers really had a great idea
Thursday, July 16, 2009 7:06:18 AM
It is a start but like the guy said, how do we get China and others to make products in an enviornmental way?  We need trade regulations that say we are not going to allow their products in otherwise.  Like Nafta being started for Wal Mart for cheap labor, the enviornmental laws our good old Congress said would apply never was enforced.  Gosh, now that surprises me.  We must bring back regulations and green standards creating innovation and efficiency.  OH, lastly do not vote for lawyers that run for office, too many of them in politics and real campaign reform so our Congress can be imparitila like they are questioning with the Supreme Court nomination Solomayer.
Thursday, July 16, 2009 7:07:05 AM

Its sounds pretty expensive to me. So the prices will rise and our choices will be eliminated? If Pepsi isn't as green as Coke will Wal-mart stop selling it and run Pepsi out of business forcing everyone to purchase Coke. I'm tired of this Greenhouse MYTH taking away my freedom to drive the type of car I want to drive. Forcing me to buy light bulbs that aren't as bright don't last the 5 years their suppose to and are going to cost me money to get rid of them, cause there's no one around who recycles them. Not to mention if you break one you have to call in a hazmat team to clean it up that can't be cheap!

 

Thursday, July 16, 2009 7:17:26 AM

A couple people have missed the point -- Walmart is not going to try to regulate the quality of the products.  They are just going to make the information immediately apparent to the consumer and let the chips fall where they may. 

 

The responsibility falls totally on the manufacturer, not Walmart.  If the manufacturer does nothing they risk customers switching to their greener competitors.

 

The interesting thing will be to see if Americans even care, or if they continue buying garbage anyway.....I'm hoping we will do ourselves proud!

Thursday, July 16, 2009 7:19:17 AM
I will not buy "green" unless it is cheaper then "not green". Its nonsense.
Thursday, July 16, 2009 7:23:52 AM

Torchwood:

 

What if the Green version is only 10 cents more expensive?  Or, what if the Green version was in fact cheaper?   I am just curious what your reaction is...  Would you find it helpful to at least know either way?   Since you can still make your own decision what you end up buying

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