Wal-Mart suppliers to disclose carbon emissions

The company will start with a pilot group of about 30 manufacturers in seven product categories, including toothpaste, soap, beer, milk and DVDs, identified as they appear regularly in the average consumer shopping basket. Wal-Mart plans to eventually widen the project to include about 68,000 suppliers. "This is a learning process and the members of this group are pioneers addressing some of the biggest challenges in the world today,"​ said Jim Stanway, senior director of Wal-Mart's global supply chain initiatives. "With the help of our suppliers we can better understand the impact of energy and our supply chain." ​This scheme is the latest development in Wal-Mart's ethical and environmental program, established in 1992, and which is forcing manufacturers and suppliers to comply with Wal-Mart standards or risk losing contracts with the largest grocery retailer in the US. In August, Wal-Mart carried out a giant audit of the workforce practices of about 8,000 suppliers, after which about 0.2 percent of audits resulted in factories being permanently barred from supplying Wal-Mart. Another 2.1 percent were barred from producing goods for the retailer for a period of one year. Earlier this year, the company also encouraged its suppliers to sign up to its on-line green rating system, hoping that the scheme would reduce packaging waste by 5 percent and slash energy use. Those that make an effort to change their packaging and products towards meeting Wal-Mart's goals are ranked at the top of the pile among their competitors, making them the preferred supplier. Those that do not, face regulation to the lower ends of the ranking and the possible loss of their business with Wal-Mart. Suppliers move up or down the rank in their product category depending on any changes they make, or that their competitors make ahead of them, and by 2008, Wal-Mart buyers will be required to use the packaging scorecard results to influence their purchasing decisions if they want to retain their position as a supplier. The scorecard evaluates the sustainability of product packaging based on a number of factors. These are greenhouse gas emissions related to production, material value, product to packaging ratio, cube utilization, recycled content usage, innovation, the amount of renewable energy used to manufacture the packaging, the recovery value of the raw materials and emissions related to transportation of the packaging materials. The move will stop millions of pounds of trash from reaching landfill and reduce the amount of carbon dioxide entering the atmosphere by 667,000 metric tons, Wal-Mart calculates, as well as save suppliers about $3.4bn a year in costs.