Retail: A Pivot Point for Sustainability

This report from Five Winds International explores how, from Walmart on down, retailers are becoming the key to corporate sustainability efforts across the supply chain.

From the introduction to the report:

The recently released Wal-Mart sustainability scorecard may become the new baseline of information for all companies concerned with their environmental and social performance. The scorecard assesses Wal-Mart’s suppliers on their performance in four key areas: energy and greenhouse gas emissions; waste and water use; natural resources; and responsible and ethical production. Although its development is a very significant move from the world’s largest retailer, the score card is just an early sign of things to come. Smart companies know they will need to go beyond simply responding to Wal-Mart’s latest efforts.

What has become clear is that major retailers are now a pivot point for corporate sustainability. On the one hand, they influence thousands of suppliers; on the other, they interface with millions of consumers. In late 2006, Five Winds postulated that a “tipping point” may be in reach in regard to the development of sustainable technologies and products, and that retailers could play a major role in driving the demand for these products.

Since that time, environmental and social issues have grown in importance and retailers have demonstrated a strong desire to capitalize on a critical mass of consumers willing to purchase products that reflect their values. The release of the Wal-Mart score card is one indicator of how retailers are going to do this. Material suppliers, product manufacturers and others along the value chain need to respond to this new reality and they need to do it quickly. This paper examines the current situation and provides advice to companies on how to get out in front of the growing demand for environmentally and socially responsible suppliers and products.