Overview and MindClick Perspective
Over the past 10 years, we have helped businesses implement sustainability programs, monitored consumer demand for “green” products, and contributed to moving certification standards beyond base levels.
Three years ago, our research showed mainstream consumer acceptance of global warming and the need for businesses, government, and consumers to collectively solve the problem. Over the past several years, business response to the “green” growth opportunity created a flood of “green-washing” and “green labels/certifications” resulting in confusion, distrust, and consumer and legal backlash.
At the June 2009 Sustainable Brands conference, we led a focus group of Fortune 500 executives in which all participants strongly agreed, “The most critical challenge to the success of sustainability is meaningful measurement.”
On July 16, 2009, Walmart changed the face of business as we know it with the formal announcement of plans to develop a worldwide sustainable product index (see
Walmart Sustainability Index Fact Sheet).
This index is designed to serve as a single source of data for evaluating the sustainability of all products carried by Walmart. In the next two years, Walmart intends to roll out in-store consumer facing labels reflecting each product’s sustainability performance for use in the purchase decision process.
“Customers want products that are more efficient, that last longer and perform better,” said Mike Duke, Walmart’s president and CEO. “And increasingly they want information about the entire lifecycle of a product so they can feel good about buying it. They want to know that the materials in the product are safe, that it was made well and that it was produced in a responsible way.”
We believe that Walmart’s move is brilliant in addressing pending government regulation, growing consumer interest and concern, and the lack of systematic standards for determining product and corporate sustainability performance.
Impact to Your Organization
Walmart has initiated the development of their sustainability index with a
supplier survey due by October 1, 2009 from top tier U.S. suppliers. The survey is comprised of 15 basic questions covering the categories of energy and climate, material efficiency, natural resources, and, people and community.
This represents a sea change in sustainability investment that goes far beyond the basic definition of ‘green’. Customers, competitors and consumers will have access to information that will fundamentally change the ‘sustainability’ of products, brands, and entire businesses. It will no longer be sufficient for your products/brands to deliver on the existing core drivers of success. Brand leadership will become synonymous with sustainability leadership. In recognition of this new reality, Walmart’s sustainability group now reports directly into the brand team.
To achieve success in this new environment, companies will need to:
1) Invest in comprehensive social, environmental and product specific sustainability programs;
2) Fully integrate sustainability into the corporate DNA through ongoing, meaningful, and substantiated performance measurement;
3) Create an authentic, transparent and continuous dialogue with key stakeholders reflecting sustainability goals and achievements;
4) Build substantiated, proven sustainability success stories into brand strategies and marketing communications.
In our work with clients across different industries, much of the sustainability focus has been on internal operational efforts at the CSR level, with the majority of companies just beginning to look at product specific performance, and even fewer engaged in communicating their efforts to customers/consumers. Those companies who move faster in implementing organization wide environmental, social and product specific efforts, and who effectively communicate their goals and progress in a transparent way, will ultimately stand a greater chance of success in this new world.
