Impact of the Wal-Mart Sustainability Scorecard [1]
There is always risk when you’re an innovator. That’s why many persons experienced both excitement and trepidation when Wal-Mart officially implemented its packaging scorecard on Feb. 1. The company is using the scorecard to help achieve its sustainability goals of reducing waste, using renewable energy and selling sustainable products.
The scorecard requires suppliers to enter data into a program that allows Wal-Mart buyers to compare each supplier’s sustainability credentials. It has become a key tool for the retailer’s buyers to use when they make purchasing decisions.
As of the start date, Wal-Mart estimates that so far, nearly 6,400 of its vendors have submitted data on more than 97,000 products. In becoming the first major U.S. retailer to initiate such a sweeping sustainability program, Wal-Mart deserves praise. However, in the early weeks of its implementation, a lot of concern is being expressed.
Some say Wal-Mart’s primary goal is to reduce its own supply-chain costs. Others claim the scorecard will drive up suppliers’ costs as they redesign packaging and logistics. One estimate put Procter & Gamble’s cost of complying at $200 million. By Wal-Mart’s own estimates, about 20 percent of its suppliers have not yet submitted scorecard data. Most who haven’t complied are smaller vendors.
The scorecard includes several key metrics: greenhouse gas emissions; product-to-package ratio; space utilization; the amount of renewable energy used in package production; and emissions related to the distance the packaging materials are transported.
One industry consultant expressed concern that some of the metrics on which the scorecard is based are not finalized, yet buyers are making decisions based on the scorecard results. He pointed out that some materials definitions are still listed as “draft” on a website for suppliers. He also said use of renewable energy was supposed to be extra credit, yet it’s being given a 10-percent weight in each supplier’s score, which could exclude them from purchases.
Despite a yearlong testing stage before the Feb. 1 launch, Wal-Mart admits that it will need to continue refining the metrics.
Perhaps the biggest concern about the whole process is the fact that no matter what Wal-Mart does, this sustainability program will become a de facto standard for the industry—the global muscle of this retail giant commands that much attention.
So, it is important that Wal-Mart gets it right. That’s the responsibility of being a leader
["Impact of Wal-Mart scorecard creates concerns" by John Kalkowski, Editorial Director -- Packaging Digest, 3/1/2008 - http://www.packagingdigest.com/article/CA6536405.html]
Posts in Impact of the Wal-Mart Sustainability Scorecard [1]:
May 1, 2009 by
Brian Butler | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | No Comments »
Birkin, F., Cashman, A., Koh, S. C., Koh, L. and Liu, Z. (2009). New sustainable business models in China. Business Strategy and the Environment. Retrieved from www.interscience.wiley.com on Monday, April 13, 2009.
In the article New Sustainable Business Models in China, the concept of sustainability is discussed with regard to China. The article focuses on why sustainability is not achievable; due to a lack of skills, poor finance and absence of knowledge the country has come to grinding halt with regard to the embedment of sustainability. Furthermore the article outlines the sever environmental issues China is facing, these issues range from server soil erosion, to 1 in 4 people dying from respiratory diseases. The big issue is that China is one of the largest contributors to climate change. The article goes on to discuss the survey conducted in China with a number of companies; the results are difficult to swallow, as every company had an idea of environmental awareness, but only one company has made it part of their efforts to utilize environmentally friendly materials.
May 1, 2009 by
Brian Butler | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | No Comments »
Karatzoglou, B., & Spinlanis, L. (2008). Sustainable tourism in Greek Islands: The integration of activity based environmental management with a destination environmental scorecard based on the adaptive resource management paradigm. Business Strategy and the Environment. Retrieved from www.interscience.wiley.com on Monday, April 13, 2009.
This article focuses on sustainability in the tourism field, one might be quick to over look this article, but the article goes on to describe the impact tourism can have on sustainability with regard to the environment. The article states that “small size, lack of relevant legal framework, poor monitoring, and insufficient infrastructures provide partial explanations of the unsatisfactory environmental performance.” The article goes on to discuss the use of an environmental scorecard that could be utilized in an effort to increase sustainability, and put more people on the same playing field. The scorecard focuses on areas such as: discharge of chlorinated pool water, greenhouse gas emissions, and energy consumption from cooling operations. The article touches on areas that might normal be an oversight to someone with little knowledge of sustainability.
May 1, 2009 by
Brian Butler | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | No Comments »
Loorbach, D., Van Bakel, V. C., Whiteman, G., & Rotmans, J. (2009). Business strategies for transitions toward sustainable systems. Business Strategy and the Environment, retrieved from www.intersciencewiley.com, Monday, April 13, 2009.
The authors evaluate the various challenges that arise across three distinct sustainability systems; business, government and civil society. While research recognizes the unique contributions made over the years, authors suggest that more assertive research is needed in quality standards and the ever-changing societal systems that create new heights for sustainability. Therefore, the authors explored 2 cases utilizing the transition management framework. This framework that has three levels, strategic, tactical, and operational. Both companies are located in the Netherlands, and the general approach is for the societal context to be re-developed.
April 2, 2009 by
Brian Butler | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | No Comments »
This workshop will focus on discussing the following questions:
- What does the environmental manager need to know about the Wal-Mart Sustainability Scorecard in order to gain leverage to move his or her company toward sustainability?
- What are ways in which the environmental manager can work within the supply chain to contribute to the successful resolution to packaging reduction initiatives?
May 28, 2008 by
Brian Butler | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1],Overview | No Comments »
The Wal-Mart Sustainability Scorecard is but one of many metrics/scorecards/calculators used in regard to sustainable practices. The findings of this workshop were that there were conflicting interests at play that make the use of the scorecard challenging. Additionally, there was a consensus view that the scorecard could effect the supply chain in both directions (“up and down the supply chain”), however, the scorecard has a scope that is somewhat limited in that it currently only applies to North America. Some issues that were also discussed was that there must be dedicated resources in order to use the scorecard, it is challenging to develop common terminology when using the scorecard, and unfortunately the number of scorecard uploads has not met expectations since the inception of the Wal-Mart Sustainability Scorecard.
You can view the symposium powerpoint HERE.
May 4, 2008 by
NEIL MILLER | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | No Comments »
This is a case study I found that describes the environmental impact of a new wal-mart “super center” proposed for Potsdam, New York. I thought this was a very through look at every aspect of how the building of a store along affects a community, without taking into account the products they sell and how those are produced.
http://web.stlawu.edu/library/potsdam_walmart.pdf
Courtemanch, Aly and Bensheimer, Lani. “Environmental Impacts of the Proposed Wal-Mart Supercenter in Potsdam”. Conservation Biology. April 29, 2005. May 1st, 2008.
April 27, 2008 by
LAUREN KERWAWYCZ and
NEIL MILLER | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | 1 Comment »
Packaging Pro’s Rate Wal-Mart’s Scorecard
Wal-Mart is big, very big. There is no denying it and many are aware that the retail giant is going to be making waves in industry. Wal-Mart may be taking on these sustainability initiatives to improve their image. Wal-Mart could also be genuinely committed to protecting the global environment. Many are taking stabs at the scorecard stating that there are many inconsistencies.
- Differing greenhouse gas measurements for North American and European suppliers.
- Combinations of different U.S. government data into the material types category.
- Requested data on transportation distances that offers no credit for making packaging at the point it is filled.
- Product-to-packaging ratios that discourage production of smaller portions and disregard market trends to reduce portion sizes.
- The way Wal-Mart analyzes recycled content in packaging, especially as it relates to current industry best practices with respect to food-safety issues.
- Recovery values that focus only on packaging that remains in Wal-Mart’s possession and differing standards for giving credit to North American and European suppliers.
- No credit to suppliers based on the amount of renewable energy (wind, water) used to produce packaging.
The scorecard is only one of 13 tools available to evaluate supplier performance. It has been viewed as a business management tool and will allow suppliers to proactively innovate and make products that are eco-friendly and cost-effective. The long terms benefits are obvious to many, and so are the short term disadvantages. The short term disadvantages include increased energy and raw materials costs for packagers.
April 27, 2008 by
LAUREN KERWAWYCZ | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | No Comments »
Wal-Mart Sustainability Campaign Makes Bad Business SenseWal-Mart Sustainability Campaign Makes Bad Business Sense
This article builds on Emily’s previous post regarding how Wal-Mart’s sustainability initiatives have received negative feedback along with the positive. A survey taken by American’s Research Group found that only only one third of consumers care about environmentally friendly products and that onyl 16% are willing to pay more for them. Walmart’s reputation was built on the fact that they could get quality products to customers at a low cost point. Many feel Wal-Mart is divering from their core focus by implementing the supplier scorecard initiatives. It is argued that Wal-Mart is presenting products that bring along serious economic setbacks to consumers in an effort to be ‘green.’
What this article tells howthe general public may not be impressed with the sustainability initiatives taken by Wal-Mart, but if we left decisions in the hands of uneducated consumers, change might not be possible. Throughout history, not many have the power and industry leadership to take on such initiatives like Wal-Mart.
April 24, 2008 by
Brian Butler ,
John Morelli ,
LAUREN KERWAWYCZ ,
and
NEIL MILLER | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | 3 Comments »
Anju, John, and I were reviewing the discussion thus far regarding the impact of the Wal-Mart Sustainability Scorecard and we are suggesting that possible topics for the symposium workshop could be:
- What does the environmental manager need to know about the Wal-Mart Sustainability Scorecard in order to gain leverage to move his or her company toward sustainability?
- What are ways in which the environmental manager can work within the supply chain to contribute to the successful resolution to packaging reduction initiatives?
April 20, 2008 by
Emily Ryan ,
,
admin and
John Morelli | Filed under: Impact of the Wal-Mart Sustainability Scorecard [1] | No Comments »
From my area of interest regarding the Wal-Mart scorecard, I would like to see the following topics discussed in our collaboratory. This would supplement the topics presented by the moderator: focus on how an EM works within the supply chain to contribute to the successful resolution to reduction initiatives.
- How Wal-Mart can take advantage of information systems to measure their progress, and help their suppliers measure progress as well.
- How Wal-Mart manages all of the knowledge gathered in their many product sections to assist with customer reduction initiatives.
- If Wal-Mart’s suppliers are also passing their knowledge and sustainable requirements down their own supply chains.
