Confusion & Doubts Face Wal-Mart as it Ponders Sustainability Index

Published: Feb 19, 2010


Amongst all the talk of "greenwashing" and the viral nature of the internet spreading a lot of unverified info on sustainability and CSR activities, it is easy to be taken for a ride. A lot more companies are producing Corporate Responsibility Reports today, but not all of them report meaningful, quantified data to suggest they are moving toward an energy efficient organization. In all this, Wal-Mart is increasingly emerging as an interesting study as it struggles to fulfill its bold announcement last year of introducing a "Sustainability Label" for every product it sells.

Skepticism has been high since the announcement and now as Wal-Mart begins conducting industry and company meetings to discuss this Index, doubts and confusion behind all that should be/is inclusive of such an Index are emerging. And this realization is setting in as Matt Kistler, the retailer's SVP of sustainability, acknowledged (courtesy: Fast Company) that "it is creating a new level of competition in ways that, historically, manufacturers have not competed."

Besides the obvious competitive quotient that may see an unprecedented push toward energy efficiency and sustainability efforts at companies worldwide, the building of this Index is also sparking confusion on how to prioritize the many elements of the exercise. Confused? Let me attempt to address this: Sustainability contains a number of varied elements that can range from internal efficiency measures like fluorescent bulbs and using recycled printing paper to more macro-level initiatives like setting water conservation and reduction targets, re-forestation, community development and carbon accounting. And these are just a few! Giving them all varied weight is just the start. How this will apply to companies across industries is the big question because the weight will unwittingly give certain manufacturers preferential metrics.

It's like comparing Disney to Procter & Gamble. Their products and services are vastly different, and therefore, their impact varies. So, how will a "Sustainability Label" give justice to a bag of Frito-Lays and a can opener? And this is where the confusion begins. To keep it transparent, an independent consortium is responsible for formulating the Index, although Wal-Mart holds a seat on it. Unilever's VP of Vitality and Environment, Karen Hamilton who is also a consortium member enunciates the fear well. "One fear is figuring out who gets to prioritize the different pieces of sustainability. Who's to decide if greenhouse-gas emissions are more pressing than water conservation?"

Will this Index put power in the consumers' hand or create an avalanche of new realities for companies to contend with to remain profitable and ahead in the game?

Tags: sustainability, CSR, energy efficiency

Companies: Pepsi, Wal-Mart, Walt Disney, Procter & Gamble, Unilever

Professions: Sustainability Expert, Sustainability Manager