SSC Sheds Light on Sustainability Reporting Challenges Faced by Wal-Mart Suppliers

E&E Publishing reporter, Julia Pyper, recently interviewed SSC President Jennifer Woofter for her article, “64 companies follow Wal-Mart’s efforts to reduce suppliers’ emissions.”  Her article highlights the challenges that suppliers to Wal-Mart stores face while trying to meet the sustainability reporting requirements set by the large retailer.  She reports that the process of calculating emissions in the supply chain is currently riddled with complexity which can cause suppliers to spend a tremendous amount of time and capital in order to evaluate their carbon footprint. 

“Suppliers are suffering from survey fatigue,” Jennifer Woofter said. “One of the biggest challenges is that these companies have to develop a way to gather emissions data, not just with respect to their own operations but to their suppliers', too. They have to aggregate the data and present it in a meaningful way. Then they are expected to act on it.”

Jennifer further added, “The issue is made worse by the fact that big multinational corporations often aren't clear about why they want a Scope 3 emissions assessment in the first place and how they're going to engage in the cleanup effort, she said. If companies overwhelm their suppliers with survey requests without setting a larger goal and playing a part in helping them reduce emissions, the entire process could yield little besides more work.

She cautions companies to think carefully about the cost and benefits before starting a supply chain initiative, and to ask the following questions:  How is this going to build a better product? How will it improve the entire value chain?

Read the full article here.​

Spotlight on 2013 Retailer Sustainability Trends

At Strategic Sustainability Consulting, we work mainly with manufacturers and suppliers to big retail companies. So understanding and responding to retailer sustainability priorities, approaches, and standards is key to our success with clients. That's why we were eager to dive into the 2013 RILA Retail Sustainability Report.

What Is RILA?

The Retail Industry Leaders Association (RILA) is the trade association for the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs, and more than 100,000 stores, manufacturing facilities, and distribution centers domestically and abroad. 

RSI engages retail sustainability executives to share best practices, develop new processes, and communicate their efforts to the industry’s most crucial stakeholders. RILA uses its annual conference, benchmark studies, collaborative  partnerships, and research on behalf of retail sustainability interests to achieve the objectives set by the five sustainability topics listed above. 

What is the 2013 RILA Sustainability Report?

The report says it best:

The objective of this report is only to act as a snapshot of the industry’s sustainability programs. Between the publication of our first Retail Sustainability Report in January, 2012 and the publication of this report, we have found that the industry is continuing to drive progress and increase accountability on the most critical issues. Also, through this report, we want to bring to your attention the significant business benefits retailers have achieved from their sustainability endeavors, ranging from improved employee loyalty to decreased costs to more resilient supply chains. As you will see illustrated in the subsequent chapters, these benefits are fueling the continued development of sustainability programs over time. However, program development does not come without challenge. 

What are the biggest takeaways in the 2013 RILA Sustainability Report?

According to the report, five characteristics allow a retailer to effectively initiate, fuel, and accelerate sustainability programs:

1. Executive engagement
2. Investment in people and systems
3. Measurement and tracking
4. Goal setting
5. Storytelling

Incidentally, these are the same elements that we talk about with our clients -- who supply these big retailers. See a common thread?

Also:

Top-performing companies have sustainability teams that are led by a vice president or someone in a higher position and average nine team members in size. The teams’ primary roles are to orchestrate internal efforts, communicate with outside stakeholders, develop strategies, and interact with senior managers. And to do so, they have set up working relationships across the organization, focusing on public and government relations, the supply chain, merchandising, facilities, real estate, and construction. 

And:

Most companies act on sustainability investments that they expect to generate a two- to three-year payback.

And:

The typical planning horizon for sustainability strategies is five years.

And: 

Most retailers measure energy, fuel, material usage, and waste generation. More than 25 percent more retailers will begin to measure code of conduct compliance, water usage, suppliers audited for social compliance, renewable energy generation, and chemicals of concern over the next two years.

Focus on the Supply Chain

Naturally, we spent the most time looking at the chapter on Supply Chain Operations, which revealed nuggets of gold like these:

• Supply chain improvements have focused on transportation, materials including chemicals of concern, and packaging design. Managing all aspects of the product life cycle, from design through use and disposal will become increasingly prevalent practices over the next two years.
• Transparency into the social and environmental impacts of product supply chains is a growing practice.
• Risk mitigation is a major benefit of supply chain sustainability programs.

Read the Whole Report

The report (46 pages in all) is chock full of charts and graphs and details on different kinds of stakeholder engagement, the payback of different sustainability initiatives, and how different sustainability teams are organized. It is WELL worth the read -- whether you are a retailer, supplier, or consumer. Download the entire report for free from the RILA website.

Don't forget to participate in a Twitter chat today (March 7th, 2013) at 1pm ET, using the #RILAchat hashtag. The RILA Sustainabiltiy team will discuss the report's findings and retail sustainability programs generally, and SSC President Jennifer Woofter (@jenniferwoofter) will be chiming in from our perspective too!​

Spotlight on Retail and Improving Sustainable Practices

This past November, twenty three of the biggest names in retail came together at the Green Retail Decisions Innovation Summit with the goal to improve sustainable practices. Keynote speakers included representatives from Wal-Mart, The Solar Electric Power Association, Walgreens, Ralph Lauren, and Staples. During their closing conference, they discovered that across the panel one of the biggest drivers of sustainable practices is renewable energy. Some interesting case studies were shared as well as some insightful assertions:

“At Walgreens, solar power and electric vehicle charging stations have taken a lead position because the payback is so clear,” Menno Enters says. “You’ll find that once you do one [solar store], it gets a lot of people, including your employees, excited about renewables.”

Julia Hamm of Solar Electric Power says, “We don’t own a lot of buildings so we have to work with landlords, but it’s all about changing the way we do business, getting the legal people, the property management people, involved. You know PPAs four years ago didn’t really exist and now it’s common practice. Now you’re looking at lease options. These are game changers.” These PPAs refer to Power Purchase Agreements which are contracts with specific energy providers.

The panel also recognized that integrating renewables into the supply chain should be a main focus of sustainable operations. L.J. Mohan of the Ralph Lauren Corporation states, “The supply chain is the subset of sustainability, and it is definitely a very important contributor to sustainability.”

Thus while switching to renewable sources of energy can be a costly endeavor, these top players in the retail industry have found it to be worth the financial trek. Your return on investment will go beyond dollars and cents, as shifts in the entire thought process of your business team at all career levels will result. Find out more information by skimming through the Summit recap.