Walmart to Evaluate Products Based on Sustainability

After a Walmart store manager in North Carolina sent an e-mail to upper management asking why all the lights in the vending machines in break rooms needed to be on, Walmart unplugged the lights behind the panel and is saving $1.4 million.

It's suggestions like that that Walmart looks to its 2.4 million employees and more than 100,000 suppliers to bring forward as part of its overall sustainability initiatives that the company has been working on for more than five years, Matt Kistler, the senior vice president of sustainability at Walmart Stores said Monday at the NRF Conference in New York City.

Under a new initiative, Walmart is developing a sustainability index tool that allows it to evaluate the products that it buys and sells by looking at the life cycle of the products—from the raw materials to distribution and sales to how consumers use the products to end of life—answering questions like, is the product easier to recycle? The products will be graded and scored based on the findings.

To accomplish this, top suppliers are being asked to answer 15 basic questions around energy, natural resources and societal impact. The data will then be analyzed with help from colleges and universities who will provide the findings to suppliers. Finally, a long term, and Walmart's most ambitious effort, is to allow consumers to start evaluating products on sustainability.

Walmart began its sustainability initiative more than five years ago around three large goals: energy, wastes and products bought and sold. Underneath those goals, it now has 37 additional commitments around sustainability.

Along the way, the company has increased its use of solar power, asked manufacturers to reduce packaging by 5% and worked on innovations in supply chain management. Early on Walmart wanted to understand what its footprint truly was and determined that only 8% of its total footprint was in its direct control. The other 92% was in the supply chain, which is why it focuses a large part of its sustainability efforts there.

Walmart asked its own employees to participate, with now more than 600,000 personally committing to achieve one initiative in their own lives, such as quitting smoking or eating more healthful foods.

"From a business context, as associates become more aware they start looking for opportunities to come forward," Kistler said. (Thus, the suggestion to turn off lights in vending machines).

Kistler displayed an image before the audience of a Walmart tractor-trailer as a symbol of what the company is doing companywide. Walmart reduced the size of the gas tanks, installed side skirts to make the trucks more aerodynamic and developed new technologies to reduce idling. It is testing a new hybrid truck. And because of the reduction in packaging, in 2008, 150 million more packages were delivered by driving 900 million fewer miles. The goal was to double the efficiency of the fleet, which is 38% more efficient today.

He outlined three criteria all companies must develop to have a successful sustainability program: buy in at senior level management; set goals—on overly aspirational/one attainable; and get started.

"You want to search for game changing opportunities within your own company, but don't miss the small things as well," Kistler said. "Small things do add up, they can propel you and get you started."

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