Wal-Mart’s Sustainability Index Initiative

According to a report by Environmental Leader, Wal-Mart will be announcing a new sustainability index initiative for rating the sustainability of products that it sells. The initiative will include other retailers, researchers, universities and suppliers and possibly go so far to look at entire life-cycle of the products with the goal to reducing or eliminating non-sustainable products. Also according to the report, while they plan to start the initiative, they also plan to hand it off to a group yet to be formed to ensure neutrality in reporting and rating.

Wal-Mart and others companies cooperating in this initiative should be commended and recognized for the positive work they do. As leaders in the world from a commercial perspective, they have an enormous ability to influence change throughout their value chain and consequently the ethical responsibility to do so. We can only hope that one of the out-comes of this initiative is the adoption of new standards globally for sustainablity of products and recognition from globally recognized organizations such as the WBCSD, IEDC and others.

The Market Response

A question remains whether or not investors will continue to reward these moves as a sign of strong leadership and forward thinking. They should because these kinds of initiatives represent creativity and critical long term thinking, a hallmark of leadership for companies which do well over the long term.

The Consumption Question

A question that still needs to be asked is “How do we help Wal-Mart and it’s competitors to begin encouraging an even bigger shift in mindset, (i.e. how do they do encourage consumers to consume less)? For a company that has it’s basis in serving the customers wants and needs, this is an interesting challenge.

And I’m not necessarily suggesting that Wal-Mart provide less products to it’s customers, although that may be an end result of such a strategy. I’m certainly not suggesting that they loose market share. What I am suggesting is that truly forward thinking executives will be taking a long hard look at the long term global perspective and, if they are truly creative influencers of change, which I believe they are, they will start asking the questions about how to design their business models and strategies around global equity as well as sustainability.

If every human being, in a growing global populuation were to be treated equitably, could they all be sustainably supplied with the numbers and types of products that we currently enjoy from companies like Wal-Mart? I ask this question, suspecting that we all know the answer (i.e. “not likely”) while conceding that I’m not personally an expert on the topic of resource consumption. I’ve heard statements from experts suggesting that we would need three earths in order to supply everyone with the amount of goods that we currently consume in developed nations. If  CO2 per capita production is indicative of resource use, and is already far too high in developed countries, I think we can conclude that we can’t continue on the current path of resource use for very long.

A Whole New Approach

While the current initiatives toward sustainability are laudable, will they go far enough to meet the future needs, or do we need our business leaders to create a whole new approach to business?

My question is “What do we need our business leaders to learn from our past behaviours and results; current market reward systems, business strategies and production and consumption patterns, that will ensure their success long into the future and ensure that our future behaviours will be both sustainable and equitable?” We might also have our business leaders ask themselves, “How long do they have to effect the changes that need to be made and what actions do they need to take immediately to make these changes before additional irrepairable damage is done?”

What ideas might they then come up with that will change their entire business model, encouraging cooperation and knowledge sharing, rewarding learning rather than imposing punative measures, incenting investors to consider the triple bottom line as mandatory vs. a nice to have, and considering the world as the market but in ways that allow sharing and distribution when necessary for equity while striving to preserve diversity, local use of resources and preservation of the global and local environments? 

What will allow our retailers to satisfy our needs and wants while giving us less “stuff” and reducing the net consumption of non-renewable resources to zero?

Who’s Responsible?

What responsiblity do we place on the market system, the investor, the consumer, the suppliers, business leaders and the policy makers?

The reality is that if we all wish to have a good world, and we all want to our children to have a good world, and their children, we all must play a part. But for those in influencial positions, let’s reward and encourage them when they take the lead and continuously challenge them to do even better.

HBI Leadership (Building Sustainable Organizations and Communities)
Garth Schmalenberg, B.Eng, CPCC
Founder / Executive Coach
Web: http://hbi-leadership.com
Blog: http://sustainabilityculture.com
E-mail: garth@hbi-leadership.com
Twitter: http://www.twitter.com/gschmalenberg
Linked-In:
Phone: 416-919-6598

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