Walmart: 15 Questions + 3 Best Practices = Global Change Agent

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July 16, 2009 Walmart announced a global process for establishing a sustainability index for all of its suppliers.

The foundation of this process were 15 questions posed by Walmart to their international network of suppliers.

These 15 questions were sub-divided into four categories:

  1. Energy and Climate: Reducing Energy Costs and Greenhouse Gas Emissions
  2. Material Efficiency: Reducing Waste and Enhancing Quality
  3. Natural Resources: Producing High Quality, Responsibly Sourced Raw Materials
  4. People and Community: Ensuring Responsibility and Ethical Production

Here’s a key insight from these 15 questions:

  • The word “measure” is used six times
  • The word “target” is used six times
  • The word “report” is used three times.

This is not surprising based upon what Jeff Rice, Walmart’s Director of Sustainability told me in a recent interview:

“A best practice that is foundational to Walmart’s sustainability initiative is measurement. Identifying key sustainability metrics and setting aggressive targets to improve unlocks the creativity of our associates to find creative solutions to sustainability and business opportunities.  . What leaped out to Walmart when we began measuring our environmental footprint was that roughly 90% of our global footprint was in our supply chain.”

Here are three best practices that are now emerging from Walmart’s sustainability program:

MEASUREMENT SURFACES OPPORTUNITY. We are what we measure. For example, Walmart has had considerable success reducing the energy consumption in their stores. What they found out when they began asking their 15 questions is that many of their suppliers had never focused upon energy efficiency. Walmart’s answer was to incorporate their lessons-learned into a program called Supplier Energy Efficiency Program (SEEP) and to offer it to their suppliers. Through their measuring Walmart “doubled down” on their results, first in their own locations and then with their suppliers!

SUSTAINABLE LEADERSHIP. Who sets the targets in a organization? It is the leaders. Sustainability is not an ad hoc activity. It requires leaders setting performance goals. That is what Walmart has done. Their leadership has incorporated the adoption of sustainable best practices as management tool to be used to realize performance goals measured by cost reductions, a reduced environmental footprint and higher quality products.

ASSOCIATE PARTICIPATION. A Walmart best practice is their associate engagement on sustainability. They have 500,000 associates out of approximately 2 million working on their volunteer tasks to make a difference in behalf of people,  planet and Walmart’s bottom line.

What Walmart is accomplishing is nothing short of global change.

Can you name the world’s largest seller of organic milk? Walmart!

Now academic studies are surfacing that identify corporate governance like Walmart’s that is acting like a global regulatory body enacting changes supportive of the environment that often still are being considered for legislation by elected legislatures.

The net result is that from Walmart asking their suppliers those pioneering 15 questions is a set of best practices for reducing the environmental footprint of a company that touches one out of every three dollars of global commerce.

Bill Roth is the founder of Earth 2017, a website posting analysis and trends on the emerging $10 trillion annual revenue smart, healthy and green global economy. His book, The Secret Green Sauce, profiles best practices of businesses making money going green.

About Bill Roth

Bill Roth is the founder of Earth 2017, author of The Secret Green Sauce and a nationally-followed contributor to Entrepreneur.com, Triple Pundit, The Green Economy Post and Media Post on best business practices emerging from the smart, healthy and green global economy. He coaches entrepreneurs, business and community leaders on how to grow revenues, profits and jobs by going smart and green.
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