So, How Sustainable is the Wal-Mart Sustainability Index?

To quote Eric Clapton: “It’s in the way that you use it.”

The Wal-Mart sustainability index is measuring whether suppliers are measuring their impact on energy usage, greenhouse gas emissions, waste, resource depletion and the communities in which they operate. Essentially it’s binary with annotation. Are you or aren’t you? If you are, please describe what you are doing.

Wal-Mart is gathering data. The key question is “What for?” Wal-Mart has sustainability targets and standards. They can be found here. They are doing good work. Of particular note are their Sustainability Value Networks. In these networks they’re bringing together “leaders from our company, supplier companies, academia, government, and non-governmental organizations (NGOs)” to work in categories that are core to Wal-Mart’s business. It is a matter of course that they will compare what they are learning from their suppliers with their own progress, most likely incorporating best practices along the way.

So, how will they use it with the suppliers? In the answer to this question lies the answer to the question in the title of this post. And, to really uncover the meaning in that answer requires us to look at the quality of relationships Wal-Mart forms with the suppliers and the quality of relationships the suppliers form with their network.

What do I mean? First, sustainability is something we do together. Fundamentally local and place based, sustainability depends on the quality of our relationships with the world around us. Reducing impact is good, however, relationship-wise this creates a less bad quality of connection. Imagine a spouse telling you that to strengthen your relationship he/she was still going to be bad but, from now on, less bad than before. A start? Yes. A strong foundation for a long-term relationship? No.

Second, sustainability is long term. What are we trying to sustain? Us. How do we do that? By sustaining what sustains us. One way to conceptualize this is a Value Web. Incremental reduction, though currently necessary is not sufficient. We become the slowly-boiled frog. The quality of relationships in our value web slowly erode, the web disintegrates and less bad leads to very, very bad. Simply, we need more good.

So, back to Wal-Mart and their suppliers. Moving forward, the better they are able to build networks of Collaboration that strengthen and enhance the Value Web the more sustainable the Wal-Mart sustainability index becomes. This is where those Sustainability Value Networks could really become value-abling. And, the more coherent their approach, the more effective the networks become at being sustainable. Again, it’s in the way that they use it.

So, now, think about this: For a retail giant like Wal-Mart this is a big hairy audacious undertaking that will touch pretty much all of us for generations to come. This matters. So do we.

So much depends on how we are, what we see and what we do now. As we do as we do we get what we get, becoming what we become. These are interesting times…

Tags: best practices, Coherence, collaboration, Eric Clapton, greenhouse gas emissions, NGO's, Sustainability Index, Sustainability Value Networks, value web, Wal-Mart, waste reduction

P&G, Microsoft & Sustainability

P&G and Microsoft have both recently strongly committed themselves to “sustainability.” P&G’s Lafley saying:

P&G’s commitment to sustainability is strategic. It is how our company conducts business. [Specifically]

• Develop and market at least $50 billion in innovative and sustainable products, up from a goal of $20 billion.
• Reduce carbon dioxide emissions, energy consumption, water usage and disposed waste by 20 percent, leading to a 50 percent reduction over the last 10 years.
• Increase use of rail transportation from 10 percent now to 30 percent by 2015.
• Increase the number of children benefiting from P&G’s Safe Drinking Water Program to 300 million, up from the original goal of 250 million.

 

and Microsoft’s saying:

Recently our CEO, Steve Ballmer, sent out an e-mail to all 90,000 Microsoft employees. He made clear that environmental sustainability is a core value for the company that is embedded in all we do,” Robert Bernard said in an interview with CNET News. He added that Ballmer talked about the topic as a corporate belief, “as opposed to a green campaign or a marketing campaign or a marketing issue.

P&G’s commitment is wide ranging and touches on a number of nodes of the value web, including resources and trade, atmosphere, energy, water, transportation, and family and community. They seem to be systematically working sustainability into their value chain.

Microsoft’s statement, though bold, is a little more confused, referring to “environmental sustainability.” Not quite sure how Microsoft is sustaining the environment. Rather than “environmental sustainability” I would recommend something like “environmental awareness is a core value”. 

Sustainability is bigger than you, me, the environment, climate change and renewable energy. It’s what links all of the essential nodes of the value web together. 

I applaud both companies for their concern and commitment. However, I believe both have a way to go before they fully embrace and embed sustainability in their organizations. They need to take the lead by leaping from focussing on discrete parts to developing strategies that link these parts holistically to what they do. 

Sustainability is about relationships and connections and not disconnected metrics. The sooner we see this the sooner we can start doing to get sustainable results.

Tags: A. J. Lafley, carbon dioxide emissions, climate change, core value, Microsoft, P&G, renewable energy, safe drinking water, Steve Balmer, sustainability, sustainable products, value web, waste reduction