Companies’ efforts and interest in improving their environmental profiles are giving rise to a new set of related products and services that can be used by various players in a given supply chain. Such is the case of Walmart, which is using “green-scoring” tools to evaluate the products it sells. The tool is being used by Walmart to evaluate consumer products, but it also has potential in evaluating any formulated product, including pharmaceuticals.
Sustainability at Walmart
The genesis of Walmart’s interest in green scoring dates back to 2005, when the company launched major sustainability efforts that focused on three principal goals: being supplied 100% by renewable energy, creating zero waste, and selling products that are safe for humans and the environment. The company has several sustainability projects and initiatives to meet those goals, including Sustainability 360, an approach designed to take a more comprehensive view of its business and engage its more than 100,000 suppliers, 2 million employees, and millions of customers. Walmart established various Sustainable Value Networks, which are used to integrate sustainable practices into all parts of its business. The Sustainable Value Networks bring together representatives from Walmart, supplier companies, academia, government, and nongovernmental organizations (NGOs) to focus on various sustainability efforts such as greenhouse-gas reduction, sustainable buildings, alternative fuels, logistics, waste, packaging, and chemical-intensive products, according to company information.
At its Sustainability Milestone Meeting in July 2009, Walmart announced plans for Sustainable Product Innovation, a tool for merchants, manufacturers, and customers to be used as a source for information on the sustainability of a product. The project involves developing an index, a process that is occurring in several stages, and which the company expects to be completed during the next several years. The first step in developing the index was the distribution of a Supplier Sustainability Assessment to its suppliers. The assessment asked suppliers 15 questions in four areas: energy and climate, natural resources, material efficiency, and people and community. Using the information gained from this initial assessment, Walmart identified suppliers that would be instrumental to the company in achieving its sustainability goals and suppliers that would need more support in building a sustainable business, according to the company.
With the distribution of the Supplier Sustainability Assessment, Walmart became a founding member of the Sustainability Consortium, an independent group of scientists and engineers from academia, government, NGOs, retailers, and industrial companies. The consortium is involved with building and maintaining a global database of information on the life cycle of products. The data will ultimately be used to develop a consumer-facing tool, which will label products with a rating system. Although the rating system is still in discussion, the goal of the system is to allow customers to factor the sustainability of a product into his/her purchasing decision, according to the company.
Marrying sustainability and software
As part of Walmart’s evaluation of the sustainability of the products it sells, the company partnered with Worldwide Environmental Regulatory Compliance Systems (The WERCS Ltd., Albany, New York) to launch the initial version of GreenWERCS, a software tool designed to assess the composition of chemical-based products, including consumer products. WERCS provides regulatory-compliance software tools and services for material-safety-data-sheet authoring and labeling, which can be used for compliance with the United Nations Global Harmonization System and REACH (Registration, Evaluation, Authorization and Restriction of Chemical substances), an European Union requirement for the registration and reporting of chemicals sold or distributed in the EU.
Walmart adopted GreenWERCS in May 2009. Using this green-scoring tool, Walmart found that more than 50% of its products contained no ingredients of concern as identified by the Chemical Intensive Product Sustainable Value Network, which was a positive finding. But the tool also identified products that contained potential ingredients of concern, which created an opportunity to work with suppliers on possible options for improving the environmental profile of those products, according to company information.
In assessing its products, Walmart uses WERCSmart, a supply-chain chemical assessment review program, which provides a system and matrix for evaluating not only the greenness of a formulated product (e.g., cleaning products, automotive products, cosmetics, personal-care products), but also the critical regulatory data needed to safely handle, store, transport, and dispose of such products. WERCS is the third-party authorized by Walmart to conduct the chemical-assessment review process online with suppliers.
The GreenWERCS product analyzes the composition of individual products by leveraging the ingredient data shared by suppliers to examine its potential impact on human health and the environment, explains Lou DeSorbo, president of the WERCS. The assessment uses a pre-identified scoring and weighting algorithm to provide information on the chemical ingredients of the products and indicate whether or not they include persistent, bioaccumulative and toxic substances, carcinogens, mutagens or reproductive toxicants, potential hazardous waste, or probable endocrine disrupters. Once the product formulation is entered into the system, GreenWERCS provides a product’s green score, a visual analysis on how the product ranks, and ways to reformulate the product without hazardous chemicals.
“This green scoring provides a benefit to all those involved in a given supply chain,” says DeSorbo. “A company selling products is able to systematically and quickly evaluate the greenness or sustainability of a given product and can make an informed decision in deciding which products it may want to stock,” he says. “In turn, the supplier receives quantitative information in assessing the sustainability of its products, which in turn can be used by a chemical supplier in evaluating the greenness of the chemicals it supplies. The result is that it provides transparency in the supply chain on the issue of sustainability.”
GreenWERCS, as a green-assessment tool, is based on a user-defined configuration. The tool can be used to evaluate the environmental and health profile of any formulated product, including a pharmaceutical product. The WERCS is applying the tool for Walmart based on that company’s sustainability criteria, but any company can develop its own algorithms based on a its own sustainability requirements. The WERCS provides the expertise not only in the software configuration and application development, but also in applying its databases of regulatory, safety, chemical, and compliance information to help develop those algorithms.
DeSorbo sees green scoring not only as a tool to evaluate the sustainability of products but ultimately as a competitive advantage. “It is one more factor that a supplier can bring into the equation, along with price, quality, reliability of supply, and the other factors that enter into a customer–supplier relationship.”