VIEWS: Wal-Mart's Index Challenges

Dispatch from SSC Intern Elizabeth Vayda

Globalized capitalism has transformed the market from a visible, face-to-face exchange of goods, to one that is invisible. The process of transforming resources into marketable goods is something that people don’t really think about nowadays - if you need a battery, you go to the store and buy it - that's generally as much thought as it takes.

These days, more and more people are beginning to question the origin and impacts of the items they buy. Wouldn't it be nice if all products were equipped with labels detailing their environmental and social impact? As many of us already know, Wal-Mart is planning to create exactly that. The retail giant hopes to create an index which will measure the environmental and social impact of all its products, which would then be communicated through an "eco-label" attached to these products. This way, consumers can be informed about the exact implications of the goods they are buying. Additionally, Wal-Mart does not want this index to be just a "Wal-Mart Index" - their goal is to initiate a global standard, which could be used by all retailers in order to assess and communicate a product's sustainability factor.

Chief Merchandising Officer John Fleming said:

There will be information to share with that consumer about how much cotton was used, how many product miles were consumed to get that T-shirt into the store, and that will make a difference in terms of what products customers consider.
The implications of such a label are wide; obviously certain products will be hurt from it, whereas others will benefit. In a time when our country is already in recession, critics are quick to point out the economic dangers that such a labelling system might pose. Complications also arise regarding the contents and appearance of the label (i.e. what specific types of standards should be measured?). Gaining consensus on these issues will not be easy.

Wal-Mart, the notorious "bad guy" among global corporations, appears to be taking sustainability seriously, as hard as that is for me to admit. Consumers have long been uninformed about the everyday things they buy. Having such a standardized labelling system will make the market more transparent. Nobody can predict if this is will be enough to dramatically shift the way people consume. Nevertheless, it will be harder for one to rationalize about buying a good, if one is forced to admit that this product has a detrimental social or environmental impact.

No company wants to attach a label to their products that will make them look bad or unappealing, so I wonder if it is possible for such a label to be communicated in an honest way. Knowing where a product comes from is one thing, but having more information regarding its production would definitely change the way I buy.

A curious issue arises here. With most of Wal-Mart's products having extremely high carbon miles (thus BAD environmental impact), will the Wal-Mart of the future be a return to localization? It seems extremely impossible now, but if consumers refuse to buy products with negative eco-labels, Wal-Mart will be forced to alter their structure in order to survive. Consumers said organic and Wal-Mart started stocking organic. What do you think, is an "eco-label" a feasible idea?

For more information you can review Wal-Mart's sustainability section, on their website, by clicking here.