Walmart is the top retailer driving companies to invest in product sustainability, followed by Target, Costco and Nordstrom, according to research released by Pure Strategies in the report, The Path to Product Sustainability. The research, completed in February 2014 with 100 global consumer product companies such as The Coca Cola Company, Henkel and Timberland, finds that retailers, along with corporate strategy and CEO vision, are the primary reasons firms are incorporating product efforts in their sustainability programs.
The retailer’s role begins with the push to address product sustainability and influences the tools used to implement programs, as well as the actions taken. This is evidenced in the additional research finding that retailer scorecards, criteria, and standards are top-ranking approaches used by company’s to assess their own product sustainability efforts.
Walmart is a leading motivator for investment in product sustainability with nearly 80 percent of respondents that identified a retail-driver citing the company in an open-ended question. This was followed by Target at about 50 percent, Costco at 18 percent, and Nordstrom at 12 percent. Walmart and Target clearly stand out from crowd. These retailers’ priorities are trickling through the supply chain and influencing supplier product sustainability programs.
Chemicals Come into Focus
Both Walmart and Target have product sustainability priorities from sustainably sourced seafood to packaging optimization. In 2013 both Walmart and Target launched sustainable chemistry policies, sending a noticeable signal to companies. For Walmart, this came after two years of development and stakeholder consultation. Rob Kaplan, Director of Sustainability for Walmart, notes that the company took this on because “customers should not have to choose between products that they can afford and products that are better for them and the environment.” Target’s efforts are framed in a similar manner, aimed to expand its selection of sustainable product choices that effectively balance price, performance and convenience.
Target is encouraging sustainable chemistry with its suppliers through a continuous improvement approach that is based on a product scoring tool that assesses chemicals of concern, transparency, animal testing, packaging, and water quality, but the details of the program implementation are not yet publicly available. Walmart’s policy expects suppliers to advance transparency by disclosing ingredients online, replace high-priority chemicals with safer alternatives, and formulate private label products to meet the EPA Design for the Environment (DfE) program for safer chemistry.
Interestingly, the Pure Strategies’ study found that the chemical assessments that are critical for meeting Walmart’s expectation of replacing high-priority chemicals were cited as one of the most valuable product sustainability approaches. Companies that are actively utilizing such tools were highlighted at Walmart’s April 2014 Product Sustainability Expo where Johnson & Johnson, Clorox and SC Johnson each presented their assessment methods.
Walmart expanded its approach to sustainable chemistry in March 2014 by providing suppliers with an implementation guide that outlines effective chemical assessment approaches:
- Screening ingredients for priority chemicals using a set of authoritative references (e.g., International Agency for Research on Cancer, US State of Washington - Chemicals of High Concern to Children)
- Utilizing informed substitution principles (that are outlined) to avoid replacing one priority chemical with another
- Disclosing product ingredients to the public
Encouraging suppliers to adopt this approach is a substantial step forward in advancing sustainable chemistry. Rockline Industries, a private label manufacturer of wet wipes and other products, has been working to improve the sustainability of their products, including removing priority chemicals. “Rockline sees the opportunity to continue to make progress through the emerging retailer programs,” notes Global Sustainability Coordinator Nina Schaub. “For example, the Walmart chemicals policy added additional considerations to our program. We continue to look more proactively at chemicals of concern and will be exploring the EPA Design for the Environment label for our products.”
Suppliers See the Signal
With the retailers’ direction set and tools in place, suppliers should be ready to take action – and soon. Online ingredient disclosure of products sold in Walmart stores will begin in just a few months, by January 2015. Walmart will report progress on meeting the DfE requirements for their private label products and removing high priority chemicals beginning in January 2016 and any products that still contain these chemicals must be labeled by 2018.
The good news is that movement is underway. Colgate Palmolive published a new Policy on Ingredient Safety in 2014 that commits to eliminating formaldehyde donors, parabens and microplastics from products over the next two years. This work is part of the company’s ongoing efforts to address ingredients currently raising consumer questions. Lori Michelin, VP of EOHS and Product Sustainability at Colgate-Palmolive notes that "policies from trade partners and engagement with stakeholders have elevated the conversation about product sustainability and green chemistry. Consensus and harmonization among these various efforts will provide higher-quality information, prevent consumer confusion and help accelerate the pace of change.”
The surge in retailer programs that promote product sustainability through chemistry and ingredient transparency is exerting evident influence on supplier investment in product sustainably. By setting concrete expectations and providing tools and guidance, retailers are speeding up supplier timetables and accelerating progress. Companies that leverage these tools and standards to improve their product sustainability programs will realize benefits that may include manufacturing savings, employee engagement and productivity, brand enhancement, and other organizational and financial gains. More details on the benefits from product sustainability programs and best practices are available in the The Path to Product Sustainability report.
Get the latest insights, trends, and innovations to help position yourself at the forefront of sustainable business leadership—delivered straight to your inbox.
VP of Consulting
Cheryl Baldwin, Ph.D. is a Vice President of Consulting for Pure Strategies, where she partners with corporate clients to develop and execute strategies to improve sustainability performance across food, home and personal care, and cosmetics industries. Cheryl also leads the firms’ global market research to generate new insights to accelerate business transformation.
Published Jun 30, 2014 2am EDT / 11pm PDT / 7am BST / 8am CEST