Have you heard about this? In a Wall Street Journal article (July 17, 2009 http://tinyurl.com/lemhhe) written by Miguel Bustillo Wal-Mart announced it will require suppliers to provide an “environmental label” for all products sold through Wal-Mart. This is a huge initiative and, because of Wal-Mart’s clout, could end up defining environmental labeling for every product sold on the planet!

The article stated, “Wal-Mart Thursday will tell suppliers they must calculate and disclose the full environmental costs of making their products, then allow Wal-Mart to distill the information into a rating system that shoppers will see alongside prices for everything from T-shirts to televisions.” That means the largest retailer in the world is now going to be taking on the role traditionally held by a government agency and a consumer advocate. It gets better.

An initiative of this size will take years, maybe decades, to implement. The driving force behind the initiative is marketing. Young consumers typically care more deeply about the environment than their parents and eco-friendly initiatives are highly attractive to this group. In addition, Wal-Mart clearly wants to get ahead of any regulatory actions by setting an early standard. Don’t forget, any company the size of Wal-Mart views the government as a possible competitor because unfriendly legislation can constrain growth.

One has to wonder about the logic behind adding cost to already fragile suppliers in this economy but, since Wal-Mart will always secure the lowest possible price, what do they care?

The specifics of the initiative are unclear (there’s a surprise) but what they’re looking for are metrics on greenhouse gas emissions, solid waste production, and water usage, information they roll-up to determine sustainability. Sustainability is a touchstone word in the environmental community that refers to a company’s ability to continue producing goods using, ideally, a minimum amount of energy and producing a minimal amount of waste. That sounds like a good goal unless "minimum" ends up being defined as zero.

Buried in the new lexicon is another eco-babble term I had not heard before, social compliance, which includes community investment. Wal-Mart is apparently aligning itself with government officials who see social engineering as a core responsibility and necessary to constrain the evil-excesses of free enterprise. Personally, I think returning 7.2 million lost jobs (Bureau of Labor Statistics, July 2, 2009) would be some fantastic social engineering but what do I know?
 
Wal-Mart’s “comprehensive sustainability index” will measure the environmental impact of the suppliers’ products. Wrote Bustillo, “For example, an index might flag how much each contributes to global warming and if it contains wood harvested in ways that deplete natural stocks.” I get it, for every tree we grow we get to sew a shirt.

Jay Golden, an Arizona State University professor and co-chairman of a consortium that will help Wal-Mart design standards added, "You can design something that is carbon neutral, that does not contribute to climate change, and yet is still detrimental to human health in other ways."

Let me get this straight, a group of Wal-Martians and academics are going to make sure that products are not being created from “wood harvested in ways that deplete natural stocks” and that suppliers don’t “design something that is carbon neutral, that does not contribute to climate change, and yet is still detrimental to human health in other ways.”

Here’s an idea: Since it’s been proven that feces adds to global warming, why don’t they just cut out all this crap and lower our prices 5%? Since Wal-Mart sales are over $400B we can call it Wal-Mart’s $20B Stimulus Package.

Steve