Walmart leaders quickly learned that the absence of a credible sustainability standard hampered their ability to market new products.
Back then, marketing products as “sustainable” was anything goes. While a few marketing attributes, like “organic,” are verified by the U.S. Department of Agriculture, for the most part companies were free to call their products “sustainable,” “natural” or “good for you,” regardless of whether it was true or not.
The need for a standard crystallized when Walmart asked suppliers for proposals for a 2008 Earth Day promotion. It wanted to specifically promote products that were sustainable. Suppliers responded with such a vast range of claims that Walmart managers could not figure out which products to include. Examples of traits that made a product “sustainable” ranged from having “reduced” packaging material – though there was no gauge as to what it was reduced from – to the use of non-toxic ingredients or the product’s overall recyclability.
A subsequent promotion of Campbell’s soup with a green “Earth Day” label (instead of its customary red one) generated external criticism and accusations of “greenwashing.” That is, some bloggers claimed sustainability at Walmart simply meant taking existing products and putting green labels on them.
Lessons like these led Walmart to seek a way of defining what sustainable means for all its products – a mammoth scale given that the company had over 60,000 direct suppliers and a single store could sell about 142,000 products. So, in 2009, the company helped establish the Sustainability Consortium, a collaboration of retailers, suppliers, universities, environmental groups and others to create a data-driven index of sustainability.
The consortium would eventually produce a sustainability “toolkit” with key performance indicators and guidance for achieving sustainability at the product category level whether these be laundry care products, computers or beer.
Such indicators could then be used by consortium members in communications with their suppliers, typically in a sustainability scorecard that the supplier would complete. For instance, a manufacturer might be asked if it had plans for reducing harmful emissions – and if it didn’t, the thinking initially went, this type of information could eventually be passed on to consumers who could then make their own judgments.
The problem was, relying on customers didn’t work.