Greening Your Supply Chain: Lessons from Walmart to Westpac

The focus of the Green Edge sustainability lens shifts this month to greening your supply chain. At the recent World Climate Summit in Mexico, UN lead climate negotiator Christina Figueres urged global corporate leaders to look upstream at their suppliers and vendors to permanently remove carbon from their supply chains.We agree, and not only because it's good for the planet, but also because it's good for business. This month we take a look at how two very different organizations approached this challenge. Next time we'll look at bottom line results. There's sure to be a lesson here for your company.
Walmart's Process for Greening its Supply Chain
The world's biggest retailer and, in our opinion, a global leader when it comes to embracing sustainability, Walmart realized that reducing the carbon footprint of its supply chain would make a significant dent in its overall carbon footprint. Walmart anticipates that it can eliminate a whopping 20 million metric tons of CO2 emissions by 2015 by reducing the carbon footprint of its supply chain, which is one and a half times the projected growth of its carbon footprint over same time period.
According to its former CEO Lee Scott, the real impetus for focusing Walmart's sustainability lens on this slice of its operations is the business opportunity:higher quality merchandise at lower costs. After collaborating with scientists, NGOs, think tanks and consultants, Walmart recognized that the biggest challenge to achieving this supply chain management goal is the difficulty of measuring the carbon footprint of the products it sells.
To address this, Walmart devised a three-step process that will ultimately result in a carbon footprint label on every product it sells in addition to the reduced CO2 emission goal noted above. Walmart's first step is a requirement that every one of its 100,000 global suppliers answer a 15-question survey aimed at assessing their sustainability. The second step is organizing a consortium of universities that will collaborate with suppliers, retailers, NGOs and governments to develop a global database of the carbon footprint of every product that Walmart sells.The third step is to provide that information to customers in the form of an easy-to-understand carbon footprint product label, so they can consume in a more sustainable way. For more information, see Walmart's Supplier Sustainability Assessment.
Great start Walmart, we'll be checking for updates!
Westpac's Sustainable Supply Chain Management
The Westpac Group, a very different multinational powerhouse, approached the greening of its supply chain with equal fervor. As a financial services organization headquartered in Australia serving 10 million customers from 1200 locations throughout the Pacific Rim, Westpac faced different challenges in greening its supply chain.For one thing it sells services rather than products and for another, its supply chain is much more heavily service oriented than Walmart's.
Like Walmart, Westpac started its green supply chain journey by soliciting feedback from numerous stakeholders ---- including suppliers, NGOs and governmental agencies ---- in order to devise a workable strategy for its thousands of vendors. Also like Walmart, one of Westpac's goals is reducing its carbon footprint through supply chain management. Unlike Walmart, Westpac is not hoping to influence the buying habits of its customers by devising a carbon footprint label for each of its purchases.
The upshot is Westpac's Sustainable Supply Chain Management (SSCM) process: a tiered approach to all of its vendors. Minimum sustainability requirements apply to all vendors and more stringent requirements apply to high spend and high risk vendors. Westpac's Code of Conduct, which every vendor must sign, ensures that all of its suppliers have written sustainability policies; management systems in place to implement, measure and monitor them; and goals for continuous improvement. No wonder Westpac's supply chain management process was recognized as the World's Best Practice for Banks according to the Dow Jones Sustainability Index.
Let us know what you think of Walmart and Westpac green supply chain efforts, and if your company has any green supply chain management issues. We'd love to help you solve them.
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