At Walmart, we believe customers shouldn’t have to choose between a product they can afford and one that’s good for the environment. Helping people save money and live better means more than just price leadership, it means leading on the big issues that matter to our customers and our communities.
The Sustainability Index gathers and analyzes information across a product’s life cycle—from sourcing, manufacturing and transporting, to selling, customer usage and end of use. Walmart uses the data from the surveys to identify key social and environmental hot spots and to set an agenda as we work with our suppliers to drive continuous improvement. Suppliers can see their own scores, how they rank relative to the field and gain insight into improvement opportunities for each of the categories they supply.
Back in 2005, Walmart and Sam's Club made a promise to our customers to sell products that sustain people and the environment. In 2009, we promised to create a Sustainability Index that would establish baselines and track progress against that goal. Then in 2012, we committed to buying 70 percent of the goods sold in our U.S. stores and clubs from suppliers who participate in our Sustainability Index program by 2017. Over 1,300 of our suppliers participated in fiscal year 2017 (FY’17), and we are excited to announce over 3,000 more suppliers have registered as of July 2017. Our success story to produce the “Every Day Low True Cost (EDLTC) T-shirt" is just one of our success stories.
Using the Sustainability Index as a guide, we challenged ourselves and one of our leading apparel suppliers, Intradeco, to significantly improve the sustainability of our $3.88 ladies’ t-shirt—without raising the price. Our collaboration has produced the EDLTC shirt. The cotton used is traceable to the Mississippi Delta in the U.S. Intradeco reuses 30 percent of the water used during the manufacturing process, and the t-shirt is manufactured using nearly 50 percent renewable energy. To engage our customers, we have highlighted key sustainability attributes of the EDLTC story on the product display. While this initiative focused on one supplier and one product, the success of the EDLTC t-shirt sends an essential message: high-quality, more sustainable products are part of the Walmart everyday low price promise. We plan to apply the EDLTC model to other apparel items as well as new areas of our supply chain.
Science-based Sustainability Measurement
The Sustainability Index gathers and analyzes information across a product’s life cycle—from sourcing, manufacturing and transporting, to selling, customer usage and end of use, and was developed by The Sustainability Consortium (TSC), a global organization dedicated to improving the sustainability of consumer products.
TSC research first identifies the materially significant environmental and social issues—or “hot spots”—across the product life cycle. At the same time, “improvement opportunities” are identified to address those hotspots. The supply chain hotspots and improvement opportunities are then summarized in a category sustainability profile.
Next, key performance indicators (KPIs) are developed in the form of survey questions that are used to measure sustainability performance for a particular product category. Suppliers then respond to the surveys for the specific product categories they supply, each covering up to 15 issues TSC has deemed critical. The surveys paint a picture of the sustainability challenges down to the category level for all kinds of items, from tomatoes to toys. We use the data from the surveys to identify key social and environmental hot spots and to set an agenda as we work with our suppliers to drive continuous improvement. We also use it to identify opportunities for special attention, such as fertilizer optimization or improved animal welfare, to help drive more substantial change quickly.
Finally, the survey data is integrated into decision-making tools throughout the business. The use of the Sustainability Index also sets the expectation that Walmart isn’t looking for change at the margins with a few niche products—we’re trying to raise the bar for all items we stock.
What's New in 2017?
In FY’17, we met our goal of buying 70 percent of our U.S. goods in categories where the index is available from suppliers that participate in the Sustainability Index. We look to build upon that success this year with emphasis on the following:
- Having more quantifiable responses to KPIs by suppliers to better understand the sustainability of our product chains
- Continue to scale the Sustainability Index across more suppliers and a greater percentage of our sales
- Expanding and deepening the analytics and insights on the Sustainability Index data for our buyers and sourcing associates so they can incorporate it into their business
- Further engage buyers, suppliers and other stakeholders using the index data, analytics and insights to drive progress on key initiatives that help reduce emissions, produce less waste and make more sustainable products
2017 Sustainability Index Timeline
The 2017 sustainability survey campaign started on Oct. 2 and ended Nov. 3. Your results are currently available on the SAP Product Stewardship Network. The 2018 reporting period will occur this fall in conjunction with Project Gigaton reporting. More information will be announced over the summer. Click here for Sustainability Index Webinars.