Wal-Mart's Sustainable Product Index to be launched this year, making the company a leader in the new era of private-sector regulators; retailer also developing front-of-pack seal for healthful foods

Graziela Medina Shepnick

LOS ANGELES , March 16, 2011 (Industry Intelligence) – Wal-Mart Stores Inc. has asked suppliers to contribute data on their greenhouse gas emissions and related activities to help create an index allowing consumers to judge a products' sustainability, and making the company a leader in the new era of private-sector regulators, Advertising Age reported online March 11.

Wal-Mart’s ambitious 19-month-old project, the Sustainable Product Index, to be launched this year, attempts to rate products and companies. Committees are developing pilot indexes for categories ranging from laundry detergent to laptop computers.

Some pilots are expected to begin this year, but Wal-Mart’s Sustainability Director Jeff Rice said in December other categories may not have indexes for consumers for at least five years, Ad Age reported.

Despite challenges in going more “green,” such as the complexity of obtaining and analyzing the data, the Bentonville, Arkansas-based retailer is “the biggest and most vigorous” of the new private-sector regulators, Ad Age reported. It is not bound by constitutional due process or slowed down by any political party.

The biggest suppliers to the US$400 billion-plus company have billions of dollars of business at stake and have not been complaining publicly about the Wal-Mart mandates. The world’s largest retailer said its supplier-sustainability assessment is not required, but adds it intends to “reward” suppliers who show progress toward measuring and meeting goals to reduce greenhouse gases.

The 65-member Sustainability Consortium, led by academics at Arizona State University and the University of Arkansas, is working on the index, Ad Age reported.

The consortium includes most major marketers of packaged goods, retailers including Amsterdam, Netherlands-based Koninklijke Ahold NV and London-based Marks & Spencer PLC, the U.S. Environmental Protection Agency and Gland, Switzerland-based World Wildlife Fund, Ad Age reported.

Wal-Mart in January also began looking more closely at nutrition, pledging to reduce sodium, sugar and fat by 2015 while developing criteria for a front-of-the-package seal to identify healthful foods. The company plans to get it out by the end of 2011.

A similar seal, proposed by a Food Marketing Institute committee and the Grocery Manufacturers Association, was to appear early next year, Ad Age reported.

Jim Nail, principal analyst with London-based Verdantix Ltd., a market-research firm that focuses on sustainability, said most major marketers in the Fortune 1000 now pursue sustainability. The issue now is “the next 50,000 companies,” Nail said, adding that Wal-Mart’s efforts may be most useful in influencing those businesses.

The primary source of this article is Advertising Age, New York, New York, on March 11, 2011.

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