- The Washington Times - Thursday, July 16, 2009

LITTLE ROCK, Ark. — Wal-Mart has big hopes for a new effort to develop eco-ratings for products it sells — an effort that goes far beyond its own stores.

“We see this as a universal — this is not a U.S. standard,” Wal-Mart Stores Inc. Chairman and CEO Mike Duke told a gathering of more than 1,500 suppliers, nonprofit groups and company staff at the giant retailer’s headquarters in Bentonville, Ark. “Across the world, this standard would work across all retailers, all suppliers.”

The meeting was intended to provide some details of Wal-Mart’s sustainability efforts, starting with the ratings that company officials hope to develop in the next few years.

Wal-Mart’s massive size gives it tremendous influence among makers of all kinds of consumer products — muscle that gives its effort a chance for wider adoption that other retailers might not have. The move also comes amid discussions on Capitol Hill about the possibility of U.S. environmental labeling regulations.

Shoppers won’t see green ratings on products for several years, according to a researcher involved in developing the index Wal-Mart will apply.

Mr. Duke said the effort would involve three steps.

First, he said, Wal-Mart suppliers will be sent a questionnaire with 15 questions to be answered. The questions, Mr. Duke said, will deal with how and where an item is produced.

“They are familiar questions that would not be a surprise to many of our suppliers,” he said.

The first question on an example of the questionnaire displayed at the meeting was: “Have you measured your corporate greenhouse gas emissions?”

Next, Mr. Duke said, Wal-Mart will help create a consortium of universities to collaborate with governments, suppliers and retailers in developing the sustainability index.

“Wal-Mart is providing the initial funding for this, but we do want other companies to participate,” Mr. Duke said. “Our goal is not to create our own index, but to spur development of a common database … that all of us can rely upon.”

The consortium will work with suppliers to assess each product’s full environmental and social impact, from the use of raw materials through the potential for recycling.

The final step, according to Mr. Duke, will be making the information available to customers in the form of index numbers “to tell customers about the sustainability of a product that they’re purchasing.”

As details about the sustainability effort emerged on several Web sites this week, questions were raised about costs.

“Suppliers are going to have to absorb the cost increases,” retail industry consultant Burt P. Flickinger III said Wednesday.

However, Wal-Mart focused Thursday on the possibility that development of the sustainability program ultimately would result in greater production efficiency, actually lowering costs.

One example provided was a private-label sour cream sold only at Wal-Mart. A video told of how electricity generated by burning methane from the manure of cows at a dairy farm in upstate New York was being used to reduce energy costs at the farm.

Mr. Duke also said suppliers would not be asked to provide private information that could give competitors an edge.

A consortium of about 12 universities already has started to gather scientific data and set new design standards for Wal-Mart’s push.

Michele Harvey, a representative of the Environmental Defense Fund who attended the meeting in Bentonville, was asked by Mr. Duke what the next step should be.

“What’s next is not only making the data available, but showing that you’re driving the numbers down,” Ms. Harvey said.

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