The Greening of Walmart’s Supply Chain…Revisited
In 2007, SCMR featured an article on Walmart’s burgeoning sustainability program, focusing on eight specific initiatives being undertaken at the company. Four years later, the author of that article, Erica Plambeck of Stanford, and colleague Lyn Denend revisit those initiatives to assess what Walmart has accomplished to date—and what still needs to be done.
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Walmart made headlines in 2005 when its CEO, Lee Scott, announced that the company was launching a new business sustainability strategy designed to meet three sweeping environmental goals: to be supplied 100 percent by renewable energy; to create zero waste; and to sell products that sustain people and the environment. Achievement of these goals would require fundamental change in how Walmart managed its supply chain.
To guide that change, Walmart convened “Sustainable Value Networks” of stakeholders, including non-governmental organizations (NGOs), policy makers, eco-friendly competitors, academics, and suppliers. These SVNs, which are organized to align with the company’s overarching sustainability goals, have evolved over time. Their goal was to scrutinize the environmental performance of the company’s extended supply chain, suggest improvements, and help implement new ways of working.
In an article for Supply Chain Management Review (see “The Greening of Walmart’s Supply Chain,” July/August 2007), we outlined these eight key practices that Walmart adopted to “green” its supply chain:
1. Identifying goals, metrics, and new technologies.
2. Certifying environmentally sustainable products.
3. Providing network partner assistance to suppliers.
4. Committing to larger volumes of environmentally sustainable products.
5. Cutting out the middleman.
6. Restructuring the buyer role
7. Consolidating direct suppliers.
8. Licensing environmental innovations.
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