Wal Mart warns suppliers to comply with sustainability rules

30 Oct 2012

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Wal-Mart, the largest retailer in the world, has warned suppliers that if they do not complain with the company’s sustainability rules then they may no longer do business with them.  Whereas the company says on one hand the rules are voluntary it also says that it may cease buying from companies that fail to comply.  Not exactly voluntary one may think.

The new requirements were announced in China where Wal-Mart has more than 20,000 suppliers.  Suppliers will have to meet not only requirements on packaging but also on many other items including pollution, energy efficiency, waste and more.

Wal-Mart set a sustainability index three yeas ago which has now been accepted by over 500 multinational producers.  Walmart aims to get 70 percent of all its goods from those companies that use the sustainability index.

“This will send a clear message to the Walmart supply chain that if you want to grow and partner with us for the long term, you will engage with us on the sustainability index,” Wal-Mart Chief Executive Mike Duke said in a speech in Beijing.

Greenpeace claims that Wal-Mart could do more and wants the company to examine issues such as deforestation, pesticides and chemical fertilizers in its fresh produce.

Wal Mart may account for as much as eleven percent of the trade gap between the US and China with its mass buying in that country.  Critics argue that its green policy is just greenwash for the environmental lobby and cost cutting for its bottom line.  Certainly, many of its suppliers will not be able to face the cost of going green, particularly in the US where there is a minimum wage and trade unions are legal.  In China it does not face these problems.


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