Wal-Mart's Move Towards a Sustainability Index

In case you haven't heard about it yet, Wal-Mart is embarking on a project to develop a sustainability index for its suppliers. At this point they are just gathering data and are far from having an index. The article link says Wal-Mart plans to make the index available to the public. They have a webcast of the meeting available on their site. This index should eventually have a huge impact on supply chain. As I've told my students, if you want to run a sustainable company, you need to ensure that members of your supply chain have sustainability in mind as well. As a start up or small company, you don't have a lot of power to influence your suppliers to change their ways and you might not have a lot of options to move to another supplier. But if you do, your best bet is to follow larger companies that are moving towards sustainability and use their suppliers.

Supply Chain Footprint

Patagonia has a new, refreshingly honest feature on their site. It details the supply chain for several of their products. It maps the progression of the products from raw material to finished good. What makes me say "refreshingly honest" is that it's not just a highlight of what they do well. The do point out for example that the Synchilla vest, though it's made from recycled materials, travels a great distance throughout North America and much of that by truck. They even offer a total amount of carbon emitted to get the product from origin to distribution. Seeing how much traveling a product does should emphasize to everyone to buy locally produced products*, especially if reducing your own carbon footprint is a major emphasis.

* Note that I try to purchase as locally as possible for the Green Business Networking events. I'll take recommendations for good regional wine, since what I've been getting comes from California (even though it's essentially the store brand from Earth Fare.)

More on Greening Supply Chain

We're back from another trip to Chicago where we saw a few Prius taxis, which is an idea that just simply makes financial sense given how much taxis stop and go. What also seems to be making sense for large companies like Clorox is introducing green products, like Green Works. I don't know how truly green it is given that it's a product made by Clorox, but people are buying it. In reading an article this morning about Clorox and their supply chain issues, this quote shows a good reason for the increase in green products: "From internal surveys, the company knows its customers will pay 10 to 15 percent more for greener products." Clearly it makes financial sense to sell a product that is more green. However, the article makes a point that getting the supplies to make the green products is a challenge. Clorox bought Burt's Bees not too long ago, and it has been having problems scaling up the business, which traditionally used many small suppliers. What this tells me is that there is plenty of opportunity for start ups to produce the raw and component materials for this boom in green products. Large consumer product companies like Clorox, GE, etc. need to get materials in large quantities in order to get their products to market. This means that either companies producing the raw materials now need to scale up (hopefully in a sustainable manner) or other start ups can enter the market and help fulfill the large companies' demand.