Walmart’s Sustainable Supplier Management Program: While not a new issue, the following article presents a concise and interesting view on the sustainable supplier management program at Walmart, which with almost half a trillion dollars in sales is the world’s largest retailer.  While Walmart launched its sustainability program in 2006 and was a founding member of the Sustainability Consortium in 2009 last year it launched the Sustainability Index to thousands of its suppliers, questioning them on a range of issues related to sustainability.  The suppliers are ranked and rated, and the results made available to its army of “Merchants” – the people who buy for Walmart.  Critically, the Merchants performance and pay will be partially based on the sustainability performance of the product category in which they operate, providing a mid-level incentive to weed out the poor sustainability performers from Walmart’s supply chain as well as improving the performance of the remaining ones.

Enhanced Eco Labeling System Proposed for the EU: While the EU has since 1992 had its EU Eco-labeling system in place, it now wants to broaden and deepen the methodology used to determine what products are allowed to affix what labels and more importantly to harmonize labels across its boundaries.  In a “Communication” (which is a distant precursor to any EU regulation) entitled “Building the Single Market for Green Products”  it proposes a three year pilot study to improve and broaden the green product process.  Expected timeline: January 2015 for testing of labeling and “communication methods” with likely implementation of any regulations for voluntary environmental labeling 3-4 years after this.  In more immediate news, there are reports of fresh talks on eco-labeling in the textiles sector.

A Sustainability Label for Smartphones? Swedish standards body and certification company TCO Development already has a certification scheme for IT products.  In line with the explosive growth of smartphones and tablets, now the largest IT markets in the world, the group has proposed a certification standards specifically for smartphones.   The draft standard covers recycling, packaging, CSR and other issues.  The company hopes to market its new smartphone specific standard in mid-2013 and certification to it will allow users to carry the same marking as previous TCO standards.  The group states “it will be sustainability certification which follows guidelines of a third party certification, Type 1 eco label according to ISO14024.”  TCO certified products are marketed by the likes of Samsung and Lenovo.  See for more details:.

 Cambodia Promotes Ethical Supply Chain Credentials: Playing catch up in economic development in the 1990s and early 2000s, Cambodia is now attempting to build its textile sector partially on marketing its ethical and worker welfare credentials.  As the global brands seek destinations of lower cost than China, Cambodia’s market share is rising.  The trade association in the country GMAC is working with the ILO on an initiative called Better Factories Cambodiaattempting to raise the quality of worker management in the country.  An in country account of supplier management by Levis in Cambodia can be found here.  Further attention to worker welfare in Cambodia was noted early this year after workers at an alleged Walmart supplier went on strike over pay and other issues.  The dispute was reportedly settled in March this year.  

Another Sustainable Clothing Group Formed for Home Textiles: The Sustainable Apparel Coalition  was formed in 2011 by a group of apparel and footwear industry players (such as Walmart, Adidas, Patagonia) to improve sustainability performance in the industry, specifically by improving supplier assessment tools.  In February this year another similar sounding group, this time the Sustainable Textiles Coalition  emerged, led by Walmart rivals Target  and Williams Sonoma and with the stated mission.   “Our mission is to lead the industry toward a shared vision of sustainability built on a common approach for measuring and evaluating textile product sustainability performance that will spotlight priorities for action and opportunities for technological innovation.  To deliver on that mission we are developing an index to assess environmental and social performance across the textiles value chain.”   The Sustainable Apparel Coalition’s remit is similar while it is several years ahead with its Higg’s Index: “The Higg Index 1.0 is primarily an indicator based tool for apparel that enables companies to evaluate material types, products, facilities and processes based on a range of environmental and product design choices.”  While Target is a member of both groups, Williams Sonoma is not and the new coalition explains the relationship between the two groups: “The Sustainable Textiles Coalition will leverage the work of the Sustainable Apparel Coalition, creator the Higg Index which currently focuses on apparel and footwear products.  The Sustainable Textiles Coalition will build on this work to create and use an index tailored to home textile products.”

Whole Foods and Genetically Modified Organisms (GMO): The US retail chain Whole Foods  is the world’s leading retailer or organic produce.  Increasingly the issue of GMO content in food is on the agenda of organic buyers in the US as demonstrated by the rapid increase of non-GMO food sales.  The retail giant has announced its policy on GMO transparency.  That is, it will achieve full disclosure and labeling by 2018.  “Whole Foods Market announced today at Natural Products Expo West that, by 2018, all products in its U.S. and Canadian stores¹ must be labeled to indicate if they contain genetically modified organisms (GMOs). Whole Foods Market is the first national grocery chain to set a deadline for full GMO transparency.  GMOs are now part of an ongoing national conversation, thanks to efforts of various advocacy groups such as JustLabelIt.org and to individual states considering their own mandatory labeling laws, like the efforts that are now underway in Washington state. “Whole Foods Market supports that measure and looks forward to supporting other state efforts that may finally lead to one uniform set of national standards,” said Robb. “While we are encouraged by the many mandatory labeling initiatives, we are committed to moving forward with our own GMO transparency plan now.”

The Story of an Environmental Campaign – Lobsters in Germany:  In the last few years, the US animal rights group the Albert Schweitzer Foundation has been in discussions with European food retailers concerning the sale of lobsters < http://www.albertschweitzerfoundation.org/news/german-discount-supermarket-chains-end-lobster-sales >.  It argues that the process of catching and bringing lobsters to market is inherently cruel.  “The lobster industry has been criticized by animal advocates for a long time now. The catching, transport, lengthy stock periods with no access to food, and cooking of live lobster inflicts a great amount of stress as well as pain and suffering on the animals.”   A year later press reports indicate the majority of German retailers have now phased out lobster sales.  Interestingly the world’s leading fisheries labeling system, MSC lists 241 companies dealing with lobsters searchable as being MSC-certified.  MSC however primarily aims at assessing environmental aspects of fisheries rather than animal cruelty issues, about which the Albert Schweitzer Foundation appealed to the German public in its campaign.

In the aftermath of the lethal textile mill fire to hit a factory in Bangladesh in November 2012, international retail and clothing brands are re-examining their suppliers and supply chain management processes.  A New York Times article   provided graphic reporting of basic lapses in safety procedures and possibly negligence resulting in more than 100 fatalities.  The same article linked the factory with supplying well-known brands such as Disney and Walmart and noted “Wal-Mart said it received a safety audit that showed the factory was "high-risk" and had decided well before the blaze to stop doing business with Tazreen. But it said a supplier had continued to use Tazreen without authorization.”

Sustainability and Supply Chain News from Walmart

US retailing giant Walmart buys approximately 30% of China’s exports to North America.  Hence its policies on corporate responsibility in the supply chain are closely monitored by governments and emerging market business alike.  It has long had what it calls an “ethical sourcing” policy in place and makes use of a range of internal-Walmart standards, global voluntary standards and supply chain auditing and outreach processes to implement its policy.   In the wake of a November 2012 factory fire in Bangladesh which killed more than one hundred workers, a report in Ecotextile News indicates the company has warned its supply chain to control their own suppliers in a “zero tolerance” policy for health and safety and other infractions. 

And MSC News from McDonalds

McDonalds  is the world’s largest restaurant chain and through its fish items is also one of the leading buyers of fishery related products world-wide.  The Marine Stewardship Council, the world’s leading sustainability standard for fish and fisheries reported that McDonalds introduced the MSC label to the over 100 million “Filet-O-Fish” burgers it services across Europe each year.  In February 2013, MSC reported that McDonalds will expand the program into its US restaurants, one of the first mega-chains to do so.  It is likely that this will give a huge boost to the public awareness of the MSC logo, placing it in front of millions of US consumers daily.

H&M is the Leading User of Organic Cotton: The Swedish clothing retail giant H&M is noted by a new market research report on sustainable textiles as the world’s leading consumer of organic cotton.   H&M has been using organic cotton in its products since 2004 and considers itself a pioneer in sustainable textiles.

Chinese Consumers Desire Green Products: US chemicals maker Du Pont revealed the results of  survey  in December 2012 showing a growing understanding of green products among urban Chinese consumers.  The findings reflect the potential for green products in the world’s largest consumer market and how this demand could help China meet its sustainability targets.  When asked about their confidence that green products are better for the environment, 70 percent of Chinese consumers surveyed said they were either very or somewhat confident (the similar figure for US consumers was 65%).  A sample of 1000 consumers was taken.

Earlier in the year we reported on activity within the US Federal government on assessing eco labels and claims made in sustainability standards.  The US government’s views on standards’ credibility is important as they are the world’s largest procurer of goods and services with a multi-trillion dollar annual spend.  In an October press release the US Federal Trade Commission announced it has issued revised Green Guides “designed to help marketers ensure that the claims they make about the environmental attributes of their products are truthful and non-deceptive”.  A key revision was to instruct companies marketing products not to make broad claims such as “eco-friendly” and there is specific guidance on claims related to recycling and waste disposal.  The guide contains new sections on carbon offsets, non-toxic claims, “made with renewable energy” claims and the use of certificates and seals of approval.  See the Guides here.

Water Stewardship Standard Progresses

The AWS (Alliance for Water Stewardship) moved a step forward in the formulation of a global standard for water use.  The beta standard will be released in early 2013 and the content can be viewed here.  The group states the standard will be:

• A fully operational (or "implementable") version of the AWS Standard, intended for testing and a final round of feedback
• Released in February, 2013 in English followed by translations in various languages
• Based around six steps and 33 Core Criteria, with four water stewardship outcomes (called principles in the first draft) embedded throughout the Standard
• Aligned with a basic plan-do-check-act cycle to help ensure integration into Environmental Management Systems
• A platform to integrate current leading thinking from related stewardship efforts (metrics, tools, guidance, etc.)
• Still based around three performance levels (AWS Core, Gold, and Platinum), but will also employ a point system in addition to core criteria at each level
• Tested throughout the world during 2013 by different sectors in different types of catchments.

The Global Sustainable Tourism Council (GSTC) joins ISEAL:  The GSTC is a federation type body under which many of the leading sustainable tourism standards sit as members, such as Earthcheck and Australia's Advanced Ecotourism Standard has become a member of the ISEAL Alliance, a wider body made up of leading sustainability standards bodies from various sectors.  The move signals a continuing trend towards collaboration amongst the often fragmented world of sustainability standards.

Non GMO Food Sales Up 21%:  Non GMO certified food sales in the US increased by a stunning 21% in the second quarter of 2012 (June-Aug) according to data from SPINS, an online newsletter focusing on the natural food industry.  The key standard for non GMO food in the US is the Non GMO Project.  Non GMO food sales hit 1 billion in 2011. 

Given its position as a retailer, clearly a major environmental impact relates to its supply chain.  The company has a scheme of certifying factories producing the goods it buys as “Plan A Eco Factories” (four owned by Crystal Group recently gained membership of this group).   M&S states “Working in partnership with our supplier, MAS, the first of our four 'eco-factories' opened in May 2008. Designed to be carbon neutral, the lingerie manufacturing site, in Thuruliya in Central Sri Lanka, combines energy saving devices, renewable energy, waste reduction processes and a healthy working environment for the factory workers.   The factory is aiming to achieve the highest status in 'green building' certification by LEED, a widely accepted international scheme run by the US Green Building Council.  So, since May 2008, our supplier in Sri Lanka has manufactured lingerie exclusively for us in a factory that's aiming to be as green as the surrounding countryside. That's something to give us all a boost.” 

Clearly gaining Plan A Eco Factory Status has significant benefits in securing business with one of the world’s largest buyers of high value textile goods.  Gaining certification involves a range of environmental issues and certification to existing environmental standards can benefit the process – some examples are LEED, ISO 14001 or the WWF Low Carbon Mfg Programme.

EPEAT (Electronic Product Environmental Assessment Tool) is a US based third party ratings system for electronics products used by many public sector bodies in North America in their procurement efforts.   Apple, the world’s largest consumer electronics company, recently described it as a mistake to abandon the EPEAT system for some of its products.  The decision triggered a statement by a US municipality that it would no longer buy the Apple products concerned.  Apple promptly back-tracked and rejoined EPEAT for its products.   

Honest Buildings

A new start up Honest Buildings claims to have “created a profile for any building in the world with an address.”  This profile contains information that allows building owners, occupants and service providers to update information on both the property's characteristics and its energy and environmental performance.  It aims to bring transparency and connectivity to the real estate industry via its profile disclosures.  The service will soon launch in the UK following doing so in the US.

 Eco Labels Overwhelming to Users

A study conducted by IMD, the International Institute for Management Development and some European partners involved the survey of 1,000 business executives around the globe about eco-labels.  The survey indicated that businesses as well as consumers are confused by the array of sustainability standards and eco labels on the market and the uptake of such certifications is reaching saturation point. 

 Some highlights are presented below.

• New Standards: A relatively recent addition to the array of sustainability of standards out there is the Responsible Jewelry Council which recently launched a chain of custody certification, taken up initially by Swiss based precious metals group Metalor.  Fiona Solomon, Director of Standards Development within RJC noted the group’s standards cover the entire value chain, primarily for diamonds, gold and platinum products and the issues of concern to the markets were chiefly related to human rights and conflict issues.

• Government involvement: A key debating issue was the impact increasing government interest in voluntary sustainable standards would have on their future.  If governments begin to use these standards (see an example in the US EPA’s recent initiative) will they be a target at the World Trade Association (WTO) level? 

• Local Chinese awareness: In terms of local awareness of these standards in China, Solidaridad’s Martin Ma noted Chinese consumers of tea are highly aware of sustainability and health issues in their purchasing choices and a recent survey highlighted the recognition of various standards amongst the consumer: Green Food (a Chinese standard), 76%; ISO 9000, 66%; Organic, 54%.  Global standards such as Fairtrade and SA 8000 scored in the single digits in terms of consumer recognition. 

Overall the tone of the meeting indicated the uptake of sustainability standards is maturing and the movement is attempting to do the same.  Creating credible supply and capacity in a cost effective manner for the demand created seems the greatest need at present!

The company recently released its 2011 Sustainability Report that showcases the company's new suite of 12 voluntary sustainability goals. The company expects to reach a number of goals by 2020, which include a “15% global increase in third party certified fiber volume”.  In terms of specifics of the use of standards, the company states that it uses third party standards (FSC, PEFC, SFI) where available.   Thus while it does not guarantee 100% of its supply is to these three globally accepted standards, it is clear this is the direction it is headed.  A check of SFI, FSC and PEFC certifications the company holds indicates the company’s Chinese operations do not hold any such certifications – perhaps an area of work at present given PEFC’s recent work towards including China into its global network.  International Paper’s policy on standards is stated as follows.  A list of certificates can be seen on its homepage. 

“As a global company, International Paper uses third-party certification, chain-of-custody and internationally recognized forest certification standards in all of our operations.

“International Paper recognizes the following certification standards for use in our global operations:

• Programme for the Endorsement of Forest Certification (PEFC) is a global umbrella organization that certifies national certification standards and supports the promotion of sustainable forest management and chain-of-custody.
• Forest Stewardship Council (FSC) is a globally recognized system that uses regionally developed forest management standards and includes chain-of-custody.
• Sustainable Forestry Initiative is a North American standard which includes provisions for forest management, fiber procurement and chain-of-custody, and is internationally recognized by PEFC.
• Cerflor, the Brazilian Program of Forest certification is a Brazilian national standard that includes forest management and chain-of-custody and is recognized by PEFC.
• In countries or regions of the world that do not have established certification standards, International Paper will implement ISO 14001 environmental management systems on the wood or fiber purchasing systems for our facilities.”

 The Canadian Aquaculture Industry Alliance has now introduced a new standard “Canadian Organic Aquaculture Standard”  which is designed to allow consumers to choose organically grown aquaculture products.  According to the organization “Specifically, the organic aquaculture standards prohibit the use of antibiotics, herbicides and genetically modified organisms, and severely restrict the use parasiticides, allowed only under veterinary supervision as a last course of treatment. The standards set measurable requirements for practices that minimize the impact of waste. These include defining stocking rates, cleaning procedures and the cleaning and feed materials that must be used.”

The standard adds the list of both Canadian and North American organic standards in general, but does not fall under the national regulatory-orientated Organic Products Regulations for Canada or Canada's trade equivalencies for organic products with the United States or European Union, the latter of which allow Canadian-labeled products to be marketed as such in the US and the EU, a key benefit to producers.  While the Canada Organic Trade Association welcomes the new standard as allowing Canadian aquaculture producers to differentiate themselves from imported goods in terms of organic credentials, Canadian press reports some Canadian organic seafood producers regard the standard as being too lenient, and allowing certain chemicals in.

The sub-group states “During the fall of 2011, the subgroup reached out to key stakeholders to gain critical input on the development of the guidelines and potential implementation approaches to recommend in the subgroup's report. In mid 2012, there will be a comment period announced in the Federal Register to gain further public input.”   Its objective is to “Ensure product-related acquisition goals of Executive Order 13514 are met through guidelines for selecting product-related environmental sustainability standards and/or ecolabeling programs”.   In drawing up these guidelines, the sub-group is looking at such issues as the effectiveness of the use of eco labels and product standards and is referring to numerous bodies that assess and produce standards at a high level, such as ISO, ANSI and ISEAL as well as existing green product programs in operation by the US Government. 

In terms of schedule the EPA/GSA sub-group will issue in mid-2012 a draft guideline on the use of eco labels and standards for public comment, in the Federal Register, with finalization of this by the end 2012.  In the implementation phase of these guidelines to happen after this, specific standards and eco labels recommended for use will be listed.   The guidelines and their development are likely to of keen interest to standards bodies and leading users of sustainability standards who may wish to compare their standards policy that of the US Federal government.  

TheGreenOffice.com is a San Francisco based company (and ekobai.com member) that rates and sells a selection of over 40,000  and states that it is “the only retailer that automatically ranks office products by Greenness (Dark Green, Green, or Conventional) and provides you with at-a-glance tools to make informed decisions about the products that you bring into your office”.    The company uses a range of third party certification schemes to rank and screen its products including FSC, Fairtrade and certifications specific to the furniture business such as a standard relating to the use of formaldehyde and other chemicals in products.  The company notes that many of its clients are in the service sector, and when it comes to their environmental footprint, they realize their greatest impact may lie in their purchasing – of paper, furniture, electronics and energy.  In a way the TheGreenOffice.com assists in this by pre screening products.  Offices are also highly concerned with health and safety issues, primarily indoor air quality which has been noted by the US EPA as the single biggest environmental threat to human health.   Chemical-related standards as applied to carpets, furniture and paint can assist in a company’s office environmental management. 

 Another booming sector is organic, epitomized by the global success of Whole Foods, a multi billion dollar listed retailer of organic products.  While Whole Foods has a robust online business of its own, Mile High Organics is an Internet only retailer based on Colorado that is certified by the California Certified Organic Farmers scheme.  The firm states “we pick out the best fresh items, screen our groceries for harmful ingredients, and deliver right to your home in reusable packaging”.  The firm’s business is restricted to the region around Boulder, Colorado at present, but clearly the business model could be replicated nationally or even globally.   The selling point to health and ecologically minded customers is to rely on a small, locally based online firm selling local organic produce from nearby producers, as opposed to using the organic sections of larger retailers such as Walmart.com.  Other examples of organic only, online only retailers are the Natural Grocery.  in the UK and OrganicDirect in the New York area.  This is a small but secure niche in the sustainability space likely to remain in the case of competition from larger online giants as customers may respect and prefer locally based delivery.

The textile life cycle is a significant source of environmental pollution in regions where enforcement may be lax and hence attracts a certain amount of pressure from groups such as Greenpeace, which recently published a report on water pollution within the textiles sector in China and announced its Detox Initiative, to which Nike, Addidas, H&M and other brands have announced their support.  This environmental and chemical pressure in the last two decades has led to widespread uptake of voluntary environmental standards aimed at displaying textile suppliers to the leading brands maintain a set of practices with regards to chemical and water use and emissions.  Leading standards include the Oeko Tex < http://www.oeko-tex.com/OekoTex100_PUBLIC/index_portal.asp?cls=02 > and the more recent Better Cotton Initiative. 

Perhaps the most inclusive and leading industry coalition formed to address labor and environmental issues in a united way is the Sustainable Apparel Coalition, a concept born in 2009 when outdoor maker Patagonia and Walmart teamed up to create a sustainability assessment tool for their supply chain, and effort which has now expanded to include over 40 of the industry’s leading brands.  The Sustainable Apparel Coalition’s first major project is the development of a common, industry-wide tool for measuring the environmental and social performance of apparel products and the supply chains that produce them.”  The “V1 Apparel Index” was released for public review in early 2012 and in an attempt to gain wider support the group now includes the US Environmental Protection Agency and several US based non profit groups.  At present the group’s membership is heavily biased towards US based organizations but the Coalition intends to open its membership more widely in the very near future.  The group states “The purpose of the Sustainable Apparel Coalition is to create one common sustainability index for the apparel and footwear industry.  The Apparel Index as it stands today has been developed by combining the best elements of both the Outdoor Industry Association’s Eco Index and Nike’s Environmental Apparel Design Tool.“