Green and Green

Wal-Mart revealed its environmental ratings program today setting in motion new manufacturing requirements for energy efficient, less wasteful and more sustainable merchandise in its 1500 stores worldwide.

Wal-Mart intends a consumer-friendly ratings system akin to the FDA’s nutritional labeling program. The effects of which will reconfigure manufacturing and supply chains among Wal-Mart’s 100,000 suppliers for years to come.

Wal-Mart’s announcement reflects a growing cultural trend I call ‘Socratic Consumption’, where consumers aggregate and cooperate to force companies to do the right thing. Once fringe, consumer desire for sustainable products  is now mainstream courtesy of  social media and web 2.0, which enable consumers to force accountability by organizing and restraining their demand. Witness the phenomenon of ‘Carrot Mobs‘, where consumers band together to offer the incentive of bulk purchasing in return for ethical or sustainable practices. Socratic Consumers might appreciate a tie up between Amazon Remembers and The Good Guide on their iPhones, giving consumers ethical and sustainable information on any product at point-of-purchase. And Patagonia’s Footprint Chronicles website follows the journey and impact of its products.

Wal-Mart understands this better than many companies today. In effect they are acting like a social network with 200 billion dollars in annual purchasing power. Wal-Mart is leveraging its enormous scale to be the consumer’s advocate and making ‘green’ also mean ‘green’. Companies will begin to see greener practices as a profit motivator instead of a cost center, a good example being the success of Ray Anderson’s amazing green carpet company.

It will take years to roll-out their labeling plans, but other social programs demonstrate how information disclosure helps consumers and impacts their decision making. A recent study that New York City’s mandated disclosure of nutritional information in chain restaurants has found that 82 pct of diners find that the calorie counts impact their decision making.

In any event, if you’re thinking about your Green programs as ‘initiatives’ instead of deeply embedded practices, Wal-Mart suggest you quickly re-think your strategy.  Those green shoots in the economy may be really ‘green’.

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• Wal-Mart to rate environmental impact (money.cnn.com)
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Tagged as: environmental, Green, New York City, strategy, Supply chain, Wal-Mart