Wal-Mart Holds Huge Summit for Ecological Sustainability in China

In what is being called the “the most ambitious private sector drive yet” to go green, Wal-Mart told hundreds of the chain’s top Chinese suppliers this week that the store intends to raise standards and “green” its supply chain.

[social_buttons]You read correctly.  At this week’s “sustainability summit,” in Beijing,  Lee Scott, Wal-Mart’s CEO,  told top Chinese suppliers that the chain “intends to use its market power to get more than just low prices.” At the gathering: Procter & Gamble, FedEx, Kimberly-Clark, Coca-Cola and Rubbermaid.

The Financial Times called the summit “the most ambitious private sector drive yet to reduce waste and pollution in China’s export-focused manufacturing industries.”

“Our environmental footprint is primarily through our supply chain as a company,” says Matt Kistler, head of Wal-Mart’s global sustainability efforts. “So we have the ability to really build a world-class, better quality, better value supply chain.”

In the United States alone, it is estimated that Wal-Mart sells about $30bn of merchandise every year.   All this stuff is made by about 30,000 factories in China, and makes up 10% of all US imports.

Yesterday Wal-Mart also promoted the “Green Supply Chain Initiative” led by the Environmental Defense Fund (EDF), a non-profit group that has been working with Wal-Mart on sustainability issues in the US. This initiative aims to work with individual suppliers on energy saving and other issues.  Wal-Mart hopes to extend the plan to other US and European retailers, and another 20,000 factories.

However, how does this initiative co-exist with Wal-Mart’s other salient goal, of continuing to reduce prices?

Conrad McCarron, head of supply chain program at As You Sow, which co-ordinates pressure on companies from ethical investors says, “If you go to a supplier that is already feeling the squeeze financially, and you say that they need to reduce energy and stop waste water, how do they do that given that Wal-Mart’s business model is basically to pay less year after year?”

And another question:  how will Wal-Mart’s efforts to green their supply chain, affect the people who work in those factories?  To me it seems as though implementing fair labor and trade practices needs to be closely aligned with any effort to go green.  How can we talk about ecological “sustainability” without touching on the human aspect of that?  It’s all one issue.

Source:  World Business Council for Sustainable Development

Photo:  WikiMedia Commons

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