Wal-Mart's eco-labeling mandate
Filed under: Company News
Wal-Mart, the country's largest retailer, announced July 15 that it will institute a new policy requiring all of its product suppliers to calculate the environmental costs of their products. These costs will then be tabulated into an easy-to-understand green rating. Wal-Mart (WMT) plans to post these ratings next to the price tags on products.
Some retail experts say this new policy will needlessly raise prices by forcing vendors to do extra work and change packaging styles, which could result in price increases of 1 to 3 percent. Others say consumers will not bother with the new eco-labels.
To understand why Wal-Mart's move is so important, consider the incredible weakness of labeling and transparency laws in the U.S. Large swathes of the consumer products sector are not required to reveal the chemical content of their products. This includes products like household cleaning agents and cosmetics. Shockingly, cosmetics that women put on their skin are rarely tested for human toxicity or to ensure that they do contain harmful agents.
It's logical that the absence of complete ingredient disclosure implies the presence of harmful ingredients. Sure, product companies may argue that they are protecting secret formulas. But that hasn't stopped a number of natural products companies that also have formulas to protect from revealing every ingredient in their products. Tom's of Maine lists all of its product ingredients online, for example. Some consumer products companies do list ingredients on their products, but tend to use very small print, making it difficult to read the label -- let alone understand what the chemical names really mean.
This lack of transparency has been a sore spot for environmental groups for some time. As America has grown more green-aware, these concerns have entered the mainstream. Yet no one group has been able to enforce a simple, easy-to-understand labeling and rating system.
Enter Wal-Mart. The Bentonville behemoth has more enforcement power than the U.S. government when it comes to consumer products. With $406 billion in revenues last year, Wal-Mart is the largest U.S. retailer by far, garnering 7% of consumer retail sales and 21% of grocery sales. No product company seeking a mass audience wants to exclude themselves from Wal-Mart.
Yet that is precisely what will happen to suppliers who fail to comply with Wal-mart's eco-ratings mandate. No compliance, no shelf space. In order to receive the green-ratings label, suppliers will likely have to disclose the absence or presence of potentially harmful substances. This information will no doubt be factored into the label rating, and also appear somewhere on the eco-label itself, perhaps in the form of a warning or an explanatory note.
The net result of all this will be a four-year mad dash to transparency and safer products, as suppliers rejig formulas and production processes to eliminate ingredients with bad reputations. Yes, products might prove more costly in the short run. But over the long haul, Wal-Mart vendors will figure out ways to get prices down even under more stringent eco-label mandates. They had better -- or else their wares will get stripped from the shelves and an eager competitor offering a lower-priced but still eco-friendly product will take their place.
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Reader Comments (Page 1 of 8)
7-17-2009 @ 1:29PM
tricia said...
Walmart never stays stock on anything..
Reply
7-16-2009 @ 4:33PM
Babymonsta said...
i know!!! everytime i find something i like they get rid of it!!!!! why oh why??
7-16-2009 @ 8:49PM
Leslie said...
Tricia Honey..you obviously do not work for the Company and Subsidiaries (sic). You do not know the ordering process much less anything else. To put it simply. depends where the merchandise comes is how long it takes to reach it's destination and considering how many other stores in that district are ordering, it may take longer. Some things come in on a daily basis some things come in 7-10 days and some it takes 4-6 weeks. And for your information, there is mass appeal for good deals at Wal Mart and not everything stays on the shelves. It's impossible to keep some things available when it flies out the door. So Tricia my dear and the rest of you who show distain for Wal Mart..if you think you can run the company better...go for it...you just simply do not understand the logistics of running a multi-billion dollar Corporation.
7-16-2009 @ 2:15PM
ConnieJ said...
Good for Walmart -- transparency and accountability. Now, -- if we could only get some of that from our government -----
Reply
7-16-2009 @ 6:01PM
B.S.Worth said...
Don't be silly, there's no accountility in Washington. But You Can get it at Wal-mart!
7-16-2009 @ 7:24PM
jane said...
CONNIE LOVED YOUR COMMENT.IT TICKLED ME PINK. I SEE ALOT OF PROBLEMS FOR OUR CHILDREN'S CHILDREN IF THE GOVERNMENT KEEPS UP THE SPENDING AT THE RATE THEIR GOING.
7-19-2009 @ 10:14PM
billy said...
Connie i know just to think we had 8 long years of no accountability, that bad hill billy GWB did what ever he wanted and did not answer to us the voters, your right there was no accountability in the gov now from all that George w bush has done, thank god we have a good prez now :)
yes we can and there is change we can believe in now after 8 long years of no accountability from washing and the GOP..
7-19-2009 @ 10:23PM
jbsasktheape said...
Are you joking, Think about it, China which is the worst polluter in the world produces 90% of walmarts merchandise so don't be fooled by this lie walmart is trying.
http://conservusa.proboards.com/
7-20-2009 @ 3:28AM
Simzee said...
Hey Walmart lovers......Walmart should PAY you to shop in that store.
7-16-2009 @ 2:23PM
RobinAZ said...
Q: What do you feed a 500 pound canary?
A: Anything it wants!
Through personal experience as a Wal Mart supplier, I can state that Wal Mart can be brutal with its vendors in pricing, stockage levels, return policies, and labeling discrepancies. That said, this is what capitalism is all about. I just wish Wal Mart was still carrying American-made products; nearly everything they sell is now made in China. No wonder our unemployment numbers are so high.
Reply
7-16-2009 @ 4:43PM
Jon said...
I beg you to understand that Walmart carries as much US made product as any other retailer. Face it, nobody carries american made items like they used to. You have to be fair, they are no better or worse than any other company.
7-16-2009 @ 5:00PM
Grandma68 said...
How can you buy anything any more American made. Goverment has chased all those who make anything American out of the country!!
7-16-2009 @ 5:18PM
webo said...
No, this is not what capitalism is about. It is what monopolies are about. This why small towns are turning to dust and small businesses are closing.
By the way, the taxpayer is covering the healthcare costs for those "happy walmart workers". I guess walmart got out in front on healthcare reform as well!
7-16-2009 @ 7:50PM
skull said...
who can afford to carry producdts made in the U.S.A. with union wages
7-19-2009 @ 9:15PM
mommymoe said...
Robin is 100% correct. When Walmart says jump, the vendors say how high. Walmart can make or break a company's sales plans. If you don't bring in the Walmart number, you won't make your forecast!!
7-19-2009 @ 11:59PM
dale m said...
they carry mostly foreign made items because nothing made in america is worth a damn and hasn't been for decades
7-20-2009 @ 9:00AM
Tony Kondaks said...
Our unemployment numbers being "high" is a recent phenomenon. Indeed, up until this latest economic crisis, our unemployment numbers were incredibly low, despite record sales at Wal-Mart and record import numbers from China.
7-16-2009 @ 2:27PM
Danny Linton said...
ConnieJ....now that is funny....transparency or accountability from OUR government....CAPITALISM RULES, BABY! I just wish that Ross could have become President back in the day...we would be in much better shape right now if that would have happened.
Reply
7-16-2009 @ 2:59PM
RobinAZ said...
Well stated, Professor. And thanks for your kind comments. Arizona certainly has a unique climate, but our time-zone is weird - we don't do Daylight Savings Time here. Best regards to ya'll in the Great Southern Region.
7-16-2009 @ 2:31PM
RobinAZ said...
Just had an epiphany - Wal Mart has been selling junk from China with lead-based paint, and who-knows-what-ingredients, and has been the subject of several lawsuits by consumers and the Feds. This whole thing may be more CYA than eco-friendliness.... just being a little cynical, but still wondering.....
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