Measuring for Success

When then-Walmart-CEO Lee Scott gave his “21st Century Leadership” speech in 2005, he was making a major public statement: the world’s largest retailer was intent on becoming more sustainable.

Because 90% of the company’s environmental impact was in their supply chain, a major element of this aspirational goal was “to sell products that sustain people and the environment”. On this front,  however, it didn’t take long for Scott to realize that stating a goal is one thing; actually accomplishing it is something else altogether.

scienceLuckily, Walmart wasn’t alone on their journey towards sustainability. EDF was right there with them—and at EDF’s core was one, overriding principal: science.

What EDF understood was simple: you can’t manage what you can’t measure. How would Walmart be able to measure movement toward selling sustainable products without first having some baseline knowledge of where they started from? How would they be able to make comparisons between the sustainability of one product versus another?

Thus, with EDF’s help, Walmart made two, groundbreaking moves: the first, in 2009, to help launch a new organization called The Sustainability Consortium (TSC).  TSC was formed with the goal of creating a Sustainability Measurement and Reporting System (SMRS) that could be used by Walmart, or any retailer, across their wide assortment of product categories.

TSC2011lgTSC has created “Sustainability Toolkits” that are ready to be used in some 250 product categories, all of which have been implemented through the Sustainability Index.  These toolkits enable the sharing of Key Performance Indicators (KPI) across a network of some 1,700 other companies—a huge opportunity for action.

The second key move, in 2012, was to send a sustainability questionnaire to about 60,000 of its global suppliers, (about 59,900 more suppliers than any other company had ever reached out to).  Called The Sustainability Index, this questionnaire started these suppliers down a path toward measuring and managing GHGs, water, waste and raw materials.

The implications of the Sustainability Index are profound: It provides Walmart merchants with a valuable tool that can measure and track the sustainability of the products they buy and sell.  Because of this, Walmart is hopeful to reach its goal, by 2017, of buying 70 percent of the goods it sells in U.S. stores only from suppliers who use the Index to evaluate and share the sustainability of their products.

What’s next? AS EDF continues to roll out the Sustainability Index with Walmart’s buyers and suppliers, we hope to also see other retailers follow in Walmart’s footsteps and begin implementing the work of TSC.  Imagine how impactful it would be if Ahold, Marks & Spencer, Tesco, Kroger (all TSC members) and others would join with Walmart in sending these same supply chain signals.