Renita Jablonski: China's under pressure again, but this time not by other governments or protesters. Nope, this time it's Wal-Mart. Wal-Mart says it wants its Chinese suppliers to go green. So the mega retailer is planning to get roughly a thousand of those suppliers together later this year. Ashley Milne-Tyte reports.
Ashley Milne-Tyte:Wal-Mart accounts for 30% of all foreign buying in China. Andrew Hutson is with Environmental Defense. The group is working with Wal-Mart on greening its supply chain. He says it's too early to tell what Wal-Mart will ask of its Chinese suppliers, but... Andrew Hutson: We think as an organization that any effective program is gonna require greater transparency in the supply chain, meaning just knowing where your products come from and who's making them, and what the processes are and what goes into them. That may sound basic, but Ted Fishman, author of China, Inc., says it's not when you consider what goes into making just one Wal-Mart product. Ted Fishman: Not only does Wal-Mart have the thousand suppliers it's meeting with but it has the suppliers to those suppliers. So, if you take a common product like a cell phone, there are 200 suppliers that make the pieces for a cell phone. Fishman says if Wal-Mart can get suppliers to pollute less that could help shape Chinese national environmental standards too.
Andrew Hutson: We think as an organization that any effective program is gonna require greater transparency in the supply chain, meaning just knowing where your products come from and who's making them, and what the processes are and what goes into them.
That may sound basic, but Ted Fishman, author of China, Inc., says it's not when you consider what goes into making just one Wal-Mart product.
Ted Fishman: Not only does Wal-Mart have the thousand suppliers it's meeting with but it has the suppliers to those suppliers. So, if you take a common product like a cell phone, there are 200 suppliers that make the pieces for a cell phone.
Fishman says if Wal-Mart can get suppliers to pollute less that could help shape Chinese national environmental standards too.
FT.com | Wal-Mart seeks emissions data
Wal-Mart is to ask its suppliers to measure and report their greenhouse gas emissions, in the biggest move to disclose emissions from businesses.
A 2009 May update in BusinessWeek:
Wal-Mart: Making Its Suppliers Go Green - BusinessWeek
To spur these changes, [then-CEO, H. Lee Scott Jr.] offered both a carrot and a stick. Wal-Mart pledged to work with its top suppliers to help improve their operations, teaching them how to increase energy efficiency and how to cut the amount of raw materials they use. The threat: By 2012, Wal-Mart would pull its orders from companies not meeting the new standards. <...> The results already are beginning to trickle in. With Wal-Mart's help, Jiangsu Redbud Dyeing Technology in Changshu City, Jiangsu Province, has cut coal consumption by one-tenth and is aiming to bring toxic emissions down to zero. The company has accelerated new product innovation: Redbud Dyeing has garnered more than 150 patents for its line of environment-friendly jute-based textiles. <...> Smart tactics spread quickly among factories, says Andrew Hutson, a supply chain expert at the Environmental Defense Fund, a U.S.-based nonprofit environmental group, who has been advising Wal-Mart without receiving compensation. ... Hutson argues that an eco-focus ultimately serves the company's low-price goals. By helping its suppliers cut waste and reduce spending on energy, Wal-Mart fully expects to see those savings passed on in lower prices. "Lowest cost doesn't have to come from past method--the squeeze-'em-till-they-bleed approach. If anything, that approach leads to environmental degradation." he says.
<...>
The results already are beginning to trickle in. With Wal-Mart's help, Jiangsu Redbud Dyeing Technology in Changshu City, Jiangsu Province, has cut coal consumption by one-tenth and is aiming to bring toxic emissions down to zero. The company has accelerated new product innovation: Redbud Dyeing has garnered more than 150 patents for its line of environment-friendly jute-based textiles.
Smart tactics spread quickly among factories, says Andrew Hutson, a supply chain expert at the Environmental Defense Fund, a U.S.-based nonprofit environmental group, who has been advising Wal-Mart without receiving compensation. ... Hutson argues that an eco-focus ultimately serves the company's low-price goals. By helping its suppliers cut waste and reduce spending on energy, Wal-Mart fully expects to see those savings passed on in lower prices. "Lowest cost doesn't have to come from past method--the squeeze-'em-till-they-bleed approach. If anything, that approach leads to environmental degradation." he says.
Still,
FT.com / Companies / Retail - Walmart to set emissions goals for suppliers
Walmart estimated the direct footprint of its global store operations in 2008 at about 21m tonnes of carbon dioxide equivalent, and the total has continued to rise as it continues to expand its stores. Its footprint is forecast to grow by more than 10m additional tonnes over the next five years even as it pursues its new supply chain goals. It has, however, reduced the volume of greenhouse gas emissions against sales, as it pursues a range of energy saving and alternative power initiatives. <...> The company, working with the Environmental Defence Fund, plans to produce a set of guidelines for itself and its suppliers to enable them to assess the extent of green house gas reductions. Claims will be verified by ClearCarbon, a consultancy, and reviewed by PriceWaterhouseCoopers. Walmart is also working with suppliers, academics and other parties on the creation of a single index on the environmental and social impact of products that could eventually be used in product labelling.
It has, however, reduced the volume of greenhouse gas emissions against sales, as it pursues a range of energy saving and alternative power initiatives.
The company, working with the Environmental Defence Fund, plans to produce a set of guidelines for itself and its suppliers to enable them to assess the extent of green house gas reductions. Claims will be verified by ClearCarbon, a consultancy, and reviewed by PriceWaterhouseCoopers.
Walmart is also working with suppliers, academics and other parties on the creation of a single index on the environmental and social impact of products that could eventually be used in product labelling.
