Recently, i saw a news from Harvard Business Review, it says that Walmart’s e-commerce site is now labelling their products produced by more than 100 suppliers with a badge which reads “Made by Sustainability Leader” as the badge on the bottom right in the picture.
This badge was created by The Sustainable Consortium (TSC), and Walmart was one of the companies for providing seed funding to launch TSC at the beginning. Basically, TSC is trying to identify what is the factor of specific products which may create the most risk, environmental issues across the full life cycle of the product. Then they will create 10 to 15 questions for manufacturers or suppliers to answer, and those questions will generate a score for each product through Walmart’s sustainability index. If the score of products reach either 80 out of 100 or the highest one in the product category, Walmart will award the badge to companies who produce this product in each category.
I think Walmart has done a pretty good job to pursue sustainability. First, as Walmart, one of the biggest retailers around the world, they have tremendous power to change their customers’ and suppliers’ behaviour. If the products with badge would be effective on customers and they will purchase more sustainable products, then more and more companies will be committing to cater to the standards set by TSC. In other words, it is also a strategic way for Walmart to reach the niche market in e-commerce market where there are already some other competitors such as Amazon because Walmart could leverage their badge to attract more attention from people who are more concerned about environmental and social issues. In addition, as Tamar mentioned in the class of Convenience, i think this badge could facilitate the customers’ buying process as the badge could be recognised easily, and customers could realize which companies are doing better than others.
I think if Walmart would like to enforce the suppliers who haven’t gotten the badge to achieve given sustainable goals, they should categorise the products on their website into two groups which are sustainable products and normal products (or even label them with non-sustainable badges) in well-organised order. By easy comparison, customers will be able to make the right choice.
References:
https://hbr.org/2015/02/can-walmart-get-us-to-buy-sustainable-products
http://www.walmartsustainabilityhub.com/app/answers/detail/a_id/242
http://www.walmart.com/cp/1229461
Hey Paul!
Thanks for your post! I remember discussing Walmart briefly in class at the beginning of the year and I mentioned how surprising it was that they were trendsetters in terms of environmental responsibility but seemed to be lacking in social responsibility given their past record. I think its particularly interesting the power Walmart holds over some of these product companies, as the information is self reported Walmart is essentially threatening closing off their channel to companies that report false information.
With that said, I think this draws back to our conversations in class about regulation and monitoring the performance of companies. I think what Vincent said in class was extremely relevant in that once companies hit a standard they get accreditation from one of these eco-labels, but these labels don’t reward companies that go above and beyond to make sustainable products. Like he said, it seems like there should really be a curve and the standards should be constantly upgraded in time to push innovation. Lastly, I think these eco-labels really need to make an effort in actively educating consumers regarding what each of their labels represent, instead of assuming consumers will look their labels up in their own time. As mentioned in class, it does act as a value added to products, but I feel that the majority of consumers do not understand what having these labels mean. Once consumers are more educated in what the different labels represent I think companies will also in turn pay more attention to meeting more of these standards.
Thanks!
Sarah Paw
Hi Paul,
This is really great progress by Walmart, especially as an industry leader and well-known business. I want to add onto Sarah’s comments, because I think she’s hit the problem dead on.
My biggest concern is the fact that all these different companies have the same label. Without knowing much about the program or any of the businesses licensed, I understand that each company that should be assessed individually. It’s bizarre that one system is being used to monitor every company, as sometimes they can’t all be compared to each other.
Additionally, the way I understand it is that Walmart gives out the awards, but who monitors how they give it out? I find it worrisome that there may be a bias, even if it isn’t meant that way. Having taken a look at the program online, there are lots of different links that just confuse me more. Understanding who it is on both sides that actually reports the award and being able to easily assess the information would go a long way with convincing me of the legitimacy of this endeavour.
Thanks!
– Sam D