*Stuart Isett/Fortune Brainstorm Green
As the CEO of Sam’s Club, I spend a lot of time out in our clubs talking to members – both consumers and small business members. Lately, they’re telling me that their budgets are still tight and they’re sticking to buying only the items they have on their shopping lists.
Their main concern is value. But that doesn’t mean they don’t also care about quality, or safety, or that a product is ethically sourced or sustainable. At Walmart and Sam’s Club, we believe that’s our true mission with sustainability – to prevent our customers from having to choose between a product they can afford and a product that is good for them and their families.
Our company is working hard to make a difference in this area, and yesterday I was in Laguna Niguel, Calif., to speak about it at Fortune Brainstorm Green. I talked with Geoff Colvin, senior editor at large for Fortune Magazine, about our Sustainability Index, a standard we have worked to establish that will help us evaluate and improve the products we sell.
As a former chemist, I love this approach. We’re using research and data to drive change in sustainability. And as a leader, I like that it also drives innovation. It allows us, and our suppliers, to constantly be asking how we can do things better.
Since we began working to develop the Index with The Sustainability Consortium in 2009, we have moved from measurement to action. We’re now using TSC’s tools to drive change in our business and across the supply chain. While we know we still have a lot of work to do, I’m proud of the advances we’ve made. More than 250 of our buyers across more than 200 product categories are now using the Index, and next year, the Index will cover 400 product categories and will also influence the design of our private brand products.
Many of the changes the Index has already helped to drive are small fixes that deliver big results. For example, our Sam’s Club beverage buyers worked with the suppliers of Genesis Acai Berry juice to reformulate the juice and transition from a “hot fill” process to a “cold fill” process in their bottling facilities. This simple temperature change drove an 80 percent reduction in the energy used to manufacture the product.
By the end of 2017, 70 percent of the goods we sell in U.S. Walmart stores and Sam’s Club locations will come from suppliers in the United States, China and around the world who use the Index to drive similar improvements. For our members seeking value, I believe this is a fact that truly hits the mark. Not only will they be getting great prices – but they can also take those products home knowing that they’re good choices all around.
It’s easy to question how a company in the business of selling products can ever be truly sustainable. We don’t think it’s Walmart’s or Sam’s Club’s job to tell our customers they can’t have refrigerators or cell phones, or any of the countless, life-improving devices so many of us take for granted. People everywhere aspire to a better quality of life.
But it IS our job to make sure that the products we sell are safe, responsibly manufactured, and affordable – and to put as many healthier, safer, more sustainable choices within reach as we can. That’s where the scientist and the CEO in me are both satisfied: knowing that research and data can help us ensure that a better life is attainable and sustainable for everyone we serve.