Walmart has a mixed record on sustainability, and in recent years the company has gone to great lengths to “green” their image. One of their environmental initiatives is the Sustainability Consortium, a group of academics, business leaders, and non-profits who are developing tools for companies to reduce the environmental impacts of their products. Founded in 2009, the Consortium now boasts over 100 members from a wide range of industries, including Coca-Cola, Disney, and Monsanto. The group is convened by two universities: Arizona State University and the University of Arkansas.
The Sustainability Consortium has conducted lifecycle assessments of dozens of products in order to determine their social and environmental impacts, as well as identify key opportunities for improvement in the manufacturing, distribution, and disposal of these goods. Their ultimate goal is to standardize the criteria for sustainability across multiple industries so that companies and consumers don’t have to juggle different standards for different kinds of products (e.g. Energy Star for electronics, USDA Organic for food, etc.). The Consortium hopes that standardized reporting will enable retailers to choose responsible suppliers, and they are also researching ways to communicate sustainability claims to consumers.
Membership in the Consortium comes at a high price -- founding members were asked to pay between $50,000-$250,000 a year for three years, with lower fees for small firms. Even government and non-profit members are asked to pay $10,000-$25,000. So why would anyone pay to join the Consortium?
Under the Systems of Exchange typology, we could classify the Consortium as an example of an Associative-Moral effort. As a Moral arrangement, the Consortium focuses on substantive, non-price criteria for supply chain evaluation, such as environmental and health-related impacts. As an Associative effort, the Consortium is mutually beneficial for each of its members. The research and development efforts of the group will help companies lower their carbon emissions, which often reduce costs. Even though the group plans to share its findings with non-members, the members who support this effort from the beginning will be able to ensure that the lifecycle assessments are relevant to their companies. Furthermore, the Consortium is beneficial from a public relations perspective -- sustainability is a key concern for many consumers, and companies could benefit from being associated with the effort.
Cynics have speculated about an additional advantage of membership: the ability of corporations to weaken sustainability standards for their own benefit. Even if the Consortium’s researchers achieve their stated goals of academic integrity and transparency, their biggest obstacle to success may be consumers’ perceptions of corporate influence. Joel Makower, chairman and executive editor of GreenBiz Group Inc., expressed these doubts soon after the Consortium was formed:
"While I don't doubt for a second the sincerity or integrity of Johnson, Golden, and their colleagues [the professors who direct the Consortium’s research efforts], and their stated intention of avoiding conflicts and pursuing transparency, I'm concerned about the optics of it all: the perception that major manufacturers are helping to create the methodologies or otherwise set the rules of rating products, presumably to their advantage. And I worry that this perception could undermine the reputation of the work the group will undertake."
Representatives from the Consortium have talked about eventually housing the standards at a university or an independent non-profit, and this may be a necessary step for the standards to gain wider support. After all, many consumers and media watchdog groups claim that the companies behind the Consortium are the very entities responsible for the environmental and health-related threats that their group claims to address.
Citations:
Biggart, Nicole Woolsey and Rick Delbridge. (2004). “Systems of Exchange.” Academy of Management Review 29(1): pp. 28-49.
Makower, Joel. (2009). “Inside Walmart’s Sustainability Consortium.” GreenBiz.com. (http://www.greenbiz.com/blog/2009/08/17/inside-walmarts-sustainability-consortium)