Wal-Mart Stores Inc. on Monday announced it is partnering with the climate group, Carbon Disclosure Project, to measure the amount of energy used to create products throughout its supply chain.
The retailer will launch the examination of supplier energy efficiency with 25 to 30 companies that collectively supply seven products: DVDs, toothpaste, soap, milk, beer, vacuum cleaners and soda. These categories were chosen because they were "ordinary products that customers commonly use."
After recording the measurements, Wal-Mart would then initiate a pilot program with a group of suppliers to look for ways to make the process of creating those products more energy-efficient. Carbon Disclosure Project, a group of institutional investors that pushes companies to disclose their greenhouse gas emissions on the theory that those emissions are financially relevant, will translate the energy consumption information from Wal-Mart suppliers into greenhouse gas emission numbers.
"This is an important first step toward reaching our goal of removing non-renewable energy from the products Wal-Mart sells," said John Fleming, EVP and chief merchandising officer of Wal-Mart Stores division. "This is an opportunity to spur innovation and efficiency throughout our supply chain that will not only help protect the environment but save people money at the same time."
Wal-Mart has said it is aiming to cut packaging waste at its stores by 25 percent within three years, double the fuel efficiency of its truck fleet within 10 years and eventually operate entirely on renewable energy. Moves such as the packaging cuts involve changes by suppliers.
According the Wall Street Journal, a sense is growing among U.S. business leaders that the federal government will likely regulate greenhouse gas emissions over the next few years. That would give companies like Wal-Mart an additional financial incentive to curb emissions, including looking to work with lower-emitting suppliers.
Dave Tovar, a Wal-Mart spokesman, told the Journal that the retailer hasn't decided whether it will use the information to pick some particularly energy-efficient suppliers over others. "We'll determine that later on," he said.
Discussion Questions: What do you think are the implications of Wal-Mart's move to measure the energy consumption of its suppliers? Will this galvanize the movement to cut carbon emissions across retail? What message is Wal-Mart sending to suppliers?