WalMart's Sustainability Index Program--Too Hard or Just Misguided

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The Walmart Sustainability Index project is one year old and the bloggers, and newsy sites are flying. It is clear from the news that the project has moved slower than Walmart's initial enthusiastic send-off heralded. I looked back at my own blog posts and see that I expressed at that time a good deal of skepticism that seems to be borne out a year later. It seems that even a company as large and powerful as Walmart can stumble a bit when taking on an issue as challenging as sustainability. But that's not surprising. The smarts that have made Walmart what it is are mostly not relevant or helpful when it comes to address sustainability.

Joel Makower has a good recap of what has happened and what has not during the past year. Some key points:

  • The Sustainability Consortium formed to create the methodology has apparently dropped the idea of the index.
  • The claims that connect the Index to sustainability have been muted.
  • The questionnaires sent to all Walmart suppliers have not produced a revolution, nor have influenced customers habits.
  • The promised transparency has yet to come.
  • Life-cycle assessment or analysis (LCA) has jumped up as notch as a tool for product evaluation, but may suffer from the same hype that the Index did.

These comments should be read as a progress report, although some are indicators of the unpromising notions that Walmart started out with.

As I reported at the outset of the Walmart initiative, giving consumers better, but not necessarily more, information about the consequences of using any particular product is basically a good idea. The devil is, as always, in the details. The problems start with the name given to the index. The name should clearly identify what kind of information is to be provided. GoodGuide, another consumer information system that offers product scores has also muted their claims about the connection to sustainability, but still not enough. It is primarily a guide for people most interested in human health impacts, but is advertised as a sustainability rating system.

To call anything a sustainability index or a similar name is to mislead the public and yourself at the same time. It is misleading in the sense that it promises more than it can deliver. The scores are always based on a set of factors that relate to bad outcomes--toxicity, climate change potential, water use, etc. They are not tied to the factors that enable a system to sustain itself and keep producing the good outcomes we expect from it. I would not be so critical if these ratings were called something like an unsustainability index, and turned upside down so that zero was the best score. Admitting that every product in the marketplace produces some bad effects (zero is virtually impossible) is a marketer's nightmare, but it is the truth. Some smart PR firm would surely find a way to step over this barrier.

LCA methodologies, the primary method used to generate ratings, are complicated and extremely data intensive. They require human value judgments at several points along the way. LCA is not a "science" as claimed by the Sustainability Consortium. It is basically an accounting system with complicated rules for allocating the inputs and outputs associated with a product or service for each stage of its life cycle. Whatever science is involved comes in the factors that are used to calculate impacts. As a consequence, the result as expressed in the form of a single rating or score is arbitrary, and depends ultimately on the weights and value judgments used in the computational method.

Perhaps, this inherent characteristic of any "rating" system is behind the failure to expose the results of the survey of suppliers to the public. The data are useful, but only to technically trained personnel who know about all the warts in the methodology. The utility of LCA to a lay community, like consumers, as opposed to a technical community, rests on the transparency and credibility of the organization doing the work. The Walmart initiative has far to go toward this end. Nothing has changed in a year. Sustainability, as expressed in almost any terms, requires less consumption--a fact that gets buried in any of the rating systems. Buying goods that score high on a "sustainability" index makes the buyer feel good, but makes the world only a little less worse than otherwise. Sustainability may come, but only if and when we find a way different from material consumption to satisfy our concerns.

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Rob said:

John, I have found myself in my local WalMart recently a few times out of choice, because surprisingly, I despise most of the other local options for household products even more (sadly, my local area is full of big box stores like Target); however, I went in with an eye to evaluating the progress of their "transformation." My local Wal-Mart is an older store, with a few options of "green" products (i.e. Kashi, Cliff Bars), but without any sense of the larger company's "sustainability mission." From what I could see, there was no trace of any communication about the sustainability of individual products to consumers. I would imagine that the communication is emphasized at their newer, urban, higher profile stores. However, to me it just reinforces your point, that Wal-Mart's biggest goal is more revenue and more sales, not less consumption, or even greater quality.