Enhancing the sustainability of our value chain
In addition to enhancing the sustainability of our retail operations, we work with others to help address environmental and social issues in our product supply chains. In fact, research by The Sustainability Consortium (TSC) “shows that, with most products, the most significant environmental and social hotspots exist largely upstream from the manufacturer in their supply chain or downstream from consumer use and product disposal.” We asprire to enhance product supply chain sustainability in collaboration with suppliers, NGOs, customers and others.
To focus our efforts on the most important areas, we use various tools to gain greater visibility into the world’s vast network of product supply chains. Chief among them is the Sustainability Index, which was developed in collaboration with suppliers, leading NGOs and the scientists at TSC. The Index provides a snapshot of the social and environmental practices and outcomes in a broad array of products and supply chains.
The Sustainability Index gathers and analyzes information across a product’s life cycle—from sourcing, manufacturing and transporting, to selling, customer usage and end of use. TSC research first identifies the materially significant environmental and social issues—or “hot spots”—across the product life cycle. At the same time, “improvement opportunities” are identified to address those hotspots. The supply chain hotspots and improvement opportunities are then summarized in a category sustainability profile. Next, key performance indicators (KPIs) are developed in the form of survey questions that are used to measure sustainability performance for a particular product category. Suppliers then respond to the surveys for the specific product categories they supply, each covering up to 15 issues that TSC has deemed critical. The surveys paint a picture of the sustainability challenges down to the category level for all kinds of items, from tomatoes to toys. We use the data from the surveys to identify key social and environmental hotspots and to set an agenda as we work with our suppliers to drive continuous improvement. We also use it to identify opportunities for special attention, such as fertilizer optimization or improved animal welfare, to help drive more substantial change quickly.
Finally, the survey data is integrated into decision-making tools throughout the business. The use of the Sustainability Index also sets the expectation that Walmart isn’t looking for change at the margins with a few niche products. We’re trying to raise the bar for all items we stock.