Wal-Mart Will Accelerate Green Retailing

Today’s Wall Street Jour­nal announced a mas­sive “green” ini­tia­tive by Wal-Mart that will even­tu­ally enable con­sumers to make informed choices about the envi­ron­men­tal impact of the prod­ucts and brands they’re think­ing about buy­ing. Because of Wal-Mart’s enor­mous clout with both sup­pli­ers and con­sumers, the impli­ca­tions of Wal-Mart’s announce­ment could be game chang­ing.

In the future Wal-Mart will require all of its sup­pli­ers to pro­vide  detailed infor­ma­tion about the envi­ron­men­tal costs, sus­tain­abil­ity mea­sures, and car­bon impact of what it takes to man­u­fac­ture and dis­trib­ute the prod­ucts that Wal-Mart stocks on its shelves. Wal-Mart wants con­sumers to be able to under­stand and com­pare the rel­a­tive sus­tain­abil­ity of foods and bev­er­ages, pack­aged goods, media and con­sumer elec­tron­ics, apparel —  for all SKUs that are stocked on the retail­er’s shelves. Wal-Mart intends that its green foot­print label­ing pro­gram apply to the sus­tain­abil­ity impact of con­sumer items through­out the life cycle of those goods — not just from raw mate­r­ial sourc­ing and man­u­fac­ture to point-of-sale.

It will take years for this “green label­ing” pro­gram to roll out in its entirety. Wal-Mart says it intends to enforce 100% com­pli­ance with this pro­gram on the part of its sup­pli­ers: if they don’t want to par­tic­i­pate, they’ll no longer be able to sell and dis­trib­ute their prod­ucts through Wal-Mart.

Because Wal-Mart accounts for almost 8% of all retail sales in Amer­ica, this ini­tia­tive will have a pro­found impact. Because sup­pli­ers will have to com­ply if they want to do busi­ness with Wal-Mart, the sec­ond-order ben­e­fits of com­pli­ance will spill over onto other retail­ers.

I think this ini­tia­tive is ter­rific, and hope that it leads to the fol­low­ing changes:

• the emer­gence of a com­mon set of sus­tain­abil­ity stan­dards, label­ing and enforce­ment prac­tices — not just stan­dards spe­cific to Wal-Mart
• adop­tion by all con­sumer-fac­ing retail­ers — both online and brick-and-mor­tar
• pric­ing mech­a­nisms and buyer behav­ior that reward every­one in the sup­ply chain for being more envi­ron­men­tally respon­si­ble

On a related note I hope that expe­ri­ence design­ers and behav­ioral spe­cial­ists are involved in the design of all the sys­tems that com­mu­ni­cate these rat­ing sys­tems to con­sumers, to ensure they are mean­ing­ful and read­ily under­stood by con­sumers.