Will Others Follow Safeway and Join the Sustainability Consortium?

Here is a quick refresher about the Consortium. Last year, Walmart launched a major sustainability initiative called the Sustainability Index, involving 3 components. One component is a set of 15 questions for Walmart suppliers. Many suppliers have answered these questions and received a numerical assessment from Walmart. Walmart has shared publicly the questions, but this program is only for Walmart suppliers and the assessment scores stay within Walmart. These questions do not ask for product-level environmental information.

The second component is a non-profit group called Sustainability Consortium. The non-profit is lead by academics and industry experts and Walmart provided some initial funding. The goal of this group is to develop and share information and methods for calculating the carbon footprint of products. Initial product level information for carbon is not expected for at least 3-5 years due to the challenges of multiple methodologies and data collection. Safeway announced joining this group and other large companies are considering joining as well.

The third component of the Sustainability Index is labeling for carbon and environmental data for specific products. This may eventually come out of the Sustainability Consortium but is years away from implementation.

So, will others follow Safeway? Walmart has demonstrated great leadership with this program. We believe that other large companies will join the Sustainability Consortium to monitor and to influence any potential outcomes. However, the devil is in the details when calculating carbon footprint for products using Life Cycle Analysis (LCA). The methodology differences among LCA approaches are large and the challenges in data gathering and agreeing on estimates are daunting. "Carbon" or "sustainable" must be defined at the product level, but this presents problems such as who decides and arbitrates this definition. Definitions matter. Labeling matters. Product differentiation matters. After decades we don't have agreement for product definitions for natural or organic. Why is sustainability or carbon any different?

It will take years, maybe decades, before the industry agrees upon a widely-accepted, product-level carbon labeling program. Kukos to Walmart and Safeway in starting this long but important journey.

In the near term, however, suppliers should expect additional sustainability questionaires from their top customers as other large retailers (and other large companies) consider replicating all or part of Walmart's Supplier Sustainability Assessment program.