It appears that Wal-Mart is giving its Chinese suppliers no option: They must not only deliver the lowest prices on earth, but also make sure these cheap products (American consumers certainly see Wal-Mart items as cheap, but many have no idea how small a fraction of the price tag Wal-Mart pays its suppliers) are Green.
The news came from the latest Wal-Mart Sustainability Summit in Beijing, as reported by Andrew Winston (who just spoke at the Plastics News Sustain ’08 Conference in Chicago) in the Leading Green blog of Harvard Business Online.Specifically, Wal-Mart mandates that:All suppliers will sign new agreements indicating compliance with environmental laws, starting with Chinese suppliers to the U.S., U.K., and Canada in just 3 months. Over the next 3 years, all suppliers globally will sign.The top 200 suppliers will achieve 20% energy efficiency improvement, and most importantly, "By 2012, all suppliers that we buy from directly should source 95% of product from companies that have the highest ratings in audits."Wal-Mart also asks suppliers for higher-quality products. "Zero defective merchandise returns by 2012" is the goal.Don't get me wrong, I'm all for green and high quality. But someone's got to foot the bill. If that additional cost for sustainability and high quality is expected to be covered by Chinese factories that already struggle on razor-thin profits, good luck with that. Let's see if Wal-Mart can defy the "you get what you pay for" of common sense.[Please bear with me. I'll continue to post tomorrow.]