Wal-Mart To Index Products' Eco Impact

Wal-Mart is setting up an environmental ratings system for all of its products. The retailer's suppliers will be required to detail the environmental costs of making their products. Wal-Mart will then turn that information into an index to help customers understand the sustainability of what they buy. The initiative could change the way consumer goods are produced and marketed around the world.

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You've seen all those nutritional labels on food packaging. They tell you how much fat or sodium an item contains. Now Wal-Mart is trying to provide similar information about the environmental impact of products.

NPR's Elizabeth Shogren has details.

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ELIZABETH SHOGREN: Employees, suppliers and competitors gathered at the company's Bentonville, Arkansas headquarters. Wal-Mart president, Mike Duke explained his plans for what he calls a worldwide product sustainability index.

Mr. MIKE DUKE (President, CEO, Wal-Mart): We know from our children, grandchildren, from university students, this is a critical issue to our customers. It's critical to the world.

SHOGREN: He says the next generation of customers wants to know the total life cycle environmental impacts of products, from raw materials to disposal, so that it can feel better about buying them. To start out, Wal-Mart is sending 15 questions to a 100,000 suppliers. It asks about energy, natural resources, and greenhouse gas emissions. Duke says the questions will get tougher.

Mr. DUKE: I think you see we are serious about this and this will lead, I think, to some great, great steps ahead in the future.

SHOGREN: Wal-Mart's vice president for sustainability, Matt Kistler, says it'll take four to five years before customers will see green labels on any products at Wal-Mart or its sister store, Sam's Club. In the meantime, Wal-Mart hopes that by gathering information from suppliers, it will push them to become greener.

Mr. MATT KISTLER (Senior Vice President, Wal-Mart): These aren't mandates. The idea is to see where everybody is and then keep on getting better.

SHOGREN: Kistler says Wal-Mart hopes the idea catches on.

Mr. KISTLER: We really hope to share this not only with our suppliers, obviously, but the entire industry, including other retailers.

SHOGREN: A group of university professors and researchers called the Sustainability Consortium will help Wal-Mart develop the index and decide what to put on the green labels. It will also help manufacturers calculate their environmental impacts. Arizona State University Professor Jay Golden is the group's co-director.

Professor JAY GOLDEN (Arizona State University): Ultimately, consumers will be able to compare a product from one company versus another, whether it's televisions or apparel or food products.

SHOGREN: Golden says customers should be able to trust the index.

Prof. GOLDEN: Both consumers and the retailers are being bombarded by manufacturers to say my product is sustainable. Yet up to this point there hasn't been an opportunity to scientifically quantify the sustainability of these products.

SHOGREN: Some businesses are ahead of the game. Timberland has been using environmental labels on its foods and other products since 2006. Timberland vice president Betsy Blaisdell says it's helped her company make greener decisions and it hasn't been expensive. But since Timberland's competitors don't use similar tags, Blasdell doesn't think it's helping sales.

Ms. BETSY BLAISDELL (Vice President, Timberland): Until consumers have that comparison between brands, I think we'll be limited in consumers using that information for making purchasing decision.

SHOGREN: Experts say it will be very difficult to gather the information necessary to give a reliable environmental report card on tens of thousands of products on Wal-Mart's shelves. John Maxwell is a professor of business and environment at Indiana University.

Professor JOHN MAXWELL (Indiana University): The great thing about Wal-Mart doing it is they have such influence over so many products and suppliers that they can have a huge influence.

SHOGREN: Maxwell says companies will start competing to have the best labels and this could drive environmental progress. Wal-Mart's worldwide sales add up to $400 billion. That's a lot of incentive to go green.

Elizabeth Shogren, NPR News.

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