The Wal-Mart effect – a Sustainability Index for every industry?

Posted by proadmin on Oct 11, 2009 10:08:22 AM

screen-shot-2010-09-28-at-3-55-57-pmSo first off apologies that I’ve been remiss in updating our blog the last few months – it’s Columbus Day weekend and I’m finally catching up….

Since our Wal-Mart Supplier Readiness Seminar a few weeks ago the broad impact of this program is clear – we’ve seen multiple suppliers rushing to learn how to respond to the Wal-Mart Sustainability Index (WSI) and how to boost their performance once they’ve completed the initial fifteen question survey.

As with any new Wal-Mart initiative, even companies not in it’s retail supply chain are studying the WSI’s relevance to their own business and industry.  These companies are left wondering whether the WSI is a precursor to their own industry’s environmental report card or whether this is just another Wal-Mart false start RFID project.

While the US considers its climate position going into Copenhagen, the SEC ponders whether to force climate reporting on financial statements, and CDP offers an emerging standard for voluntary corporate reporting, the WSI has already become today’s most important mandated environmental reporting trend for US corporations.  Unlike these other programs, this reporting has near term and real business consequences.

Like with the CDP, large companies are already set up to respond to something like the WSI.  However, mid-sized and smaller companies are struggling to figure out how fast they need to gear up for their own industry’s version of the WSI.   Most of these companies care a lot more about their current cost of energy than their carbon emissions, much less their sustainability costs.  But Wal-Mart is a leading indicator they cannot dismiss….

Three years from now we may look back at the WSI as having initiated regular sustainability reporting for Wal-Mart’s entire supplier base.  More profoundly, WSI’s bigger legacy might be having jump started industries outside of retail to develop their own sustainability reporting indices.  And, if that reporting leads to  more proactive management of environmental impact, our friends at Wal-Mart will deserve a lot of the credit.

Topics: Enterprise Carbon Accounting, Carbon Accounting, sustainability, Wal-Mart Sustainability Index, Cap N Trade, greening the supply chain