Why Walmart’s scorecard should score big

Walmart’s coming sustainability scorecard will link customers and suppliers to its own corporate sustainability story – and other companies may want to follow suit.

In our latest Eco Pulse™ study, almost half of consumers said corporate environmental reputation impacts their decision to buy a company’s products. What’s not so influential on purchase decisions? Efforts to encourage supplier sustainability.

Less than four percent of respondents rank such efforts in the top three most influential corporate sustainability activities. Nonetheless, as transparency and corporate social responsibility (CSR) become more and more integrated into business strategy, global companies are increasing their supply chain sustainability initiatives. So how can companies leverage these initiatives more with consumers?

Walmart’s on the right track with a scorecard that will highlight supplier sustainability at shelf. The idea is to create a consumer-facing scorecard that will serve as a sustainability “nutrition label.” To do that, Walmart is gathering all the nitty-gritty details from its suppliers – even asking them to get details from their suppliers – then repackaging the information neatly for its customers, based not on particular products’ greenness, but rather on general supplier ranking, which takes into account how companies make their products.

Defining Image, Defining Sustainability

By tailoring its supply chain, Walmart takes on a protector role by providing consumers with the impression they are making supplier decisions based on the greater good. The upshot is that Walmart is becoming the retailer who makes sustainability simple, palatable and convenient by casting the concept – including its own sustainability story ­– in terms of mainstream and affordable brands.

Once the index is translated into scorecards, customers will have a chance to compare the environmental reputations of the makers of their favorite brands – and choose differently in some cases (according to a study Shelton Group performed for our Inner Circle members last year).

A Significant Influence

It’s too early for much in the way of results from the supplier index, but if sustainability scorecards don’t become standard after Walmart implements them – they should.  Scorecards – just like nutrition labels – make informed choices easier and more convenient at shelf, and that makes a difference: In Shelton’s Inner Circle poll, almost two-thirds of consumers said a sustainability scorecard would impact their purchase decision.

So, if you’re the one being scored, scorecards provide a great opportunity for at-shelf differentiation – make use of it. And if you’re in the role of gatekeeper (like Walmart), scorecards show concern for customers and help grow their trust.

Finally, use scorecards to turn supply chain sustainability initiatives into a helpful part of a customer’s shopping experience. Stories in CSR reports are good, but scorecards make the supply chain part of your environmental reputation visible and personal at shelf, where it can be more influential.