Friday Semi-Rant: Is Wal-Mart's Supply Chain CSR Initiative Losing its Green Steam?

In what could probably be described as one of the best PR turnarounds of the past decade, Wal-Mart famously announced a few years back that it would more actively police its supply chain and demand that suppliers move in a green direction. This move helped turn the negative heat away from Wal-Mart regarding numerous issues, from wages and healthcare to its supplier negotiating and management tactics (e.g., financially penalizing suppliers for delayed shipments even those out of direct control of the supplier). But whether or not this supply chain mandate proves to only be a PR tool or whether or not it is truly sustainable -- sorry, could not resist the pun -- holds up, remains to be seen. A recent Industry Week article provides some background details on what might be going on behind the scenes.

According to the story, "Top-tier suppliers for Wal-Mart Stores Inc. have until Oct. 1 to complete a survey that the company will use to evaluate the manufacturers' sustainability efforts." Specifically, the survey "includes 15 questions that focus on energy and climate, material efficiency, natural resources, and people and community". Industry Week notes that manufacturers that "don't comply with the mandate risk losing Wal-Mart's business". Does any of this sound familiar? Remember Wal-Mart's programs and mandates that became anything but around RFID?

At the end of the article, the story quotes Rob Handfield who suggests that what did not surprise him was that "A, they were making it a mandate, and B, they were pushing the cost back onto suppliers to comply with it". After all, this is Wal-Mart. But in practice, Dr. Handfield is skeptical, noting "I'm not sure how they're going to do it, quite frankly". For that matter, neither am I. If I were a big box betting man, I'd put my chips squarely in the camp that this becomes another experiment for Wal-Mart that leads to little more than learning and additional supplier push-back. In a forecast period of rising commodity prices -- which we know Wal-Mart will fight tooth and nail to push back onto suppliers -- does anyone really think suppliers will pick up the tab for changing their behaviors even more?

Jason Busch

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