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Wal-Mart takes the lead in green retailing. (Yes, that Wal-Mart.)

By Matthew Shaer / July 16, 2009

To keep upscale customers once the economy revives, Wal-Mart is remodeling its stores with cleaner, wider aisles and fresh color schemes. The company also plans to create a universal rating system that scores products on their environmental and social sustainability.

Vernon Bryant/The Dallas Morning News/Newscom

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For years, Wal-Mart has been a punching bag for environmental groups, which say that the Arkansas-based company has paid little attention to its sprawling carbon footprint. Now the nation's largest retailer is fighting back ā€“ with a plan to display eco-ratings alongside its products.

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On Thursday, Wal-Mart chairman and CEO Mike Duke said the company was developing an electronic indexing system, which would help customers choose products that are healthy for the planet. The software, he said, could in the future become the basis for an international eco-rating system.

"We see this as a universal ā€” this is not a U.S. standard," Mr. Duke told reporters at a gathering at company headquarters in Bentonville, Ark., according to the Associated Press. "Across the world, this standard would work across all retailers, all suppliers."

Customers would not see the ratings in store aisles for a few years, a Wal-Mart researcher said.

How it would work

Wal-Mart has been somewhat vague on the details of the plan. But as Stephanie Rosenbloom writes in The New York Times, the system would probably be similar to the nutrition labels that adorn packages of food. The ratings would cover a range of factors, from emissions to water conservation, giving the consumer the widest possible view of how the product was created.

The ratings, Rosenbloom reports, would be compiled and vetted by a group of "scholars, suppliers, and environmental groups." Once Wal-Mart had implemented the ratings in its own aisles, other corporations would be encouraged to adopt similar standards.

"Wal-mart is providing the initial funding for this, but we do want other companies to participate," Duke said. "Our goal is not to create our own index, but to spur development of a common database... that all of us can rely upon."

Reaction

In the blogosphere, the reaction has largely been positive. "The beauty of the Wal-Mart innovation is that it doesn't ask anyone to change anything except the information that is provided and received," Harvard professor Rosabeth Moss Kanter wrote today. "If polluters want to keep polluting, they are free to do so as long as they provide that data on their Wal-Mart labels. And if consumers choose to buy from polluters whose labels they can read, they are free to do so. In theory."

Still, Dr. Kanter cautioned that the Wal-Mart initiative could put a lot of stress on some sectors of the market.

The eco-ratings would be "one enormous demand on suppliers, among them many small companies that will feel crushed by the giant's new non-carbon footprint," she said.

At Earth2Tech, Katie Fehrenbacher pointed out that although Wal-Mart is taking the lead in the States, there is international precedent:

Underlying the investments by Wal-Mart and venture capitalists is US legislation coming down the pipeline, most notably the cap-and-trade system proposed in the climate bill currently making its way through the Senate after passing the House earlier this year. In addition to U.S. legislation, other countries in Europe, as well as Japan, already have similar regulations and retailers in those regions have been moving quickly to develop green labels.

Blogger Janne K. Flisrand says she applauds the plan ā€“ with reservations. "Wal-Mart still has a long way to go to gain my trust," Flisrand writes. "For the moment, Iā€™m glad someone is doing it (even if it is the biggest of the behemoths). It will make a difference."

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