Walmart extends sustainability to global supply chain in China

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Walmart sustainability

One of the world’s largest corporations has announced a series of initiatives to make the company’s supply chain a bit more sustainable, particularly in China.

At an event in Beijing, Walmart said that it will use the Sustainability Index to design more sustainable products, make its global supply chain more socially and environmentally accountable, and reward merchants who make sustainability a bigger part of their day-to-day jobs.

“Today I’m proud to announce a series of steps and commitments that will make Walmart’s supply chain, in the United States, here in China, and around the world, more sustainable,” said Mike Duke, President and CEO, Wal-Mart Stores, Inc. “The impact of these commitments will be global and make a difference with products sold around the globe.”

Walmart’s operations in China have often been the subject of scrutiny by environmental advocates around the world. The Chinese government has also been under pressure in recent years to raise its standard for environmental practices in the country. With an economy that has been growing at an exponential rate, the air quality in cities like Beijing has been an ongoing concern for its citizens.

Despite ongoing criticism from American diplomats in China, the U.S. Ambassador had this to say regarding Walmart’s efforts…

“Walmart and the Chinese Government, along with local NGOs and suppliers, have worked together and independently to find new solutions and models for sustainable growth,” said Gary Locke. “Today’s announcement will help accelerate the good work under way to make affordable and sustainable consumer goods more accessible here in China and around the world.”

The multinational retailer says the initiatives announced will build on the broader sustainability goals Walmart set at the China Sustainability Summit in 2008. The commitments outlined include:

  • By the end of 2017, Walmart will buy 70 percent of the goods it sells in U.S. stores and in U.S. Sam’s Clubs only from suppliers in the United States, China and around the world who use the Index to evaluate and share the sustainability of their products. This change will involve suppliers who produce goods in categories where the Index is available.
  • Beginning in 2013, Walmart will use the Sustainability Index to influence the design of its U.S. private brand products.
  • Walmart will change the way its key global sourcing merchants are evaluated so that sustainability becomes an even more important part of buyers’ day-to-day jobs. Beginning in 2013, these buyers will join key buyers in Walmart U.S. and Sam’s Club who already have specific sustainability objectives on their annual evaluations.
  • The Walmart Foundation will grant $2 million to fund The Sustainability Consortium (TSC) and assist in its efforts in launching TSC in China. TSC is an independent research organization. Using the Walmart Foundation grant, TSC China will engage industries, universities and other experts to form a global network of leaders improving sustainability in consumer goods, and will provide tools and resources to help suppliers become more sustainable and competitive. Walmart will use the results of TSC’s independent work to refine its Sustainability Index for use in China.

“The $2 million grant from the Walmart Foundation will support the Consortium and position us to help bring the best science and research to support the development of the green supply chain here in China and globally,” said Kara Hurst, CEO of The Sustainability Consortium.

At the 2008 Sustainability Summit, Walmart announced ambitious goals to improve sustainability practices in its operations in China that would have benefits throughout the supply chain. Examples of the success of that work include:

  • Nearly 95 percent of direct-import factories have received one of the two highest audit ratings for environmental and sourcing practices.
  • 195 factories have improved their energy efficiency by 20 percent as of July 2012, and the top 200 factories are expected to improve their energy efficiency by 20 percent or more by the end of 2012.