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Oct. 23, 2008 - Wal-Mart has signed up for the Environmental Defense Fund's new "Greening the Supply Chain" program aimed at engaging Chinese suppliers on energy conservation and other green issues. At a conference yesterday in Bejing, the retail giant also outlined a roadmap for building a more environmentally and socially responsible global supply chain.

The EDF has been working with the Chinese government and with retailers such as Wal-Mart to further the country's development by encouraging market-based environmental policies. Familiar with Wal-Mart's supply chain, the organization says working with suppliers is the only way Wal-Mart can lower its carbon footprint.

"Suppliers are a crucial component of Wal-Mart s environmental impact, since its own efficiency efforts won t keep pace with continued growth," says Gwen Ruta, vice president, corporate partnerships, EDF. "Wal-Mart s best chance for engaging suppliers in China and worldwide is to take a holistic approach to products and supplier relationships, showing them problem areas and the environmental and business benefits of addressing them."

Wal-Mart China president and CEO Ed Chan agrees that there is a need for collaboration between Wal-Mart, the company's suppliers, and the Chinese government. "With the world's largest population, and a robust manufacturing industry, no market presents a greater opportunity for environmental sustainability to take hold than China," he says.

At the Beijing Summit, Wal-Mart laid out strict expectations it is introducing for companies who want to do business with the retailer. These requirements include:

Demonstration of compliance with environmental laws and regulations. Starting in 2009 Chinese factories will be required to certify compliance with laws and regulations where they operate. The agreement will be rolled out suppliers around the world by 2011.

Improved energy efficiency and use of fewer natural resources. Wal-Mart will partner with suppliers to improve energy efficiency in the top 200 factories it sources from directly in China by 20% by 2012. The company will share information and best practices with all of the factories it sources from as well as its competitors.

Higher standards of product safety and quality. Wal-Mart aims to drive returns on defective merchandise virtually out of existence by 2012.

Greater transparency and ownership. By next year, the company will require all direct import suppliers plus all suppliers of private label and non-branded products to provide the name and location of every factory they use to make the products it sells. The company will also have all suppliers it buys from directly to source 95% of their production from factories that receive the highest ratings on environmental and social practices by 2012.

Wal-Mart also announced a major effort to make Wal-Mart China the "most environmentally responsible retailer in China" by committing to make its stores more sustainable. The company will design and open a new store prototype that uses 40% less energy and will reduce energy use at existing stores by 30% by 2010.

The recent push for greener product in China is not just government driven. Chinese consumers are picking up green products more than their Western counterparts. In a recent survey, 69% of Chinese consumers said they expect to spend more money on green products in the coming year compared to 38% of consumers in the U.S., and 33% in the U.K.

Interested readers can learn more about Wal-Mart's efforts, as well as a new supplier certification program targeting Chinese textile and electronics manufacturers at Sustainable Brands International in Miami Beach, FL, December 9-11 where 300 brand and sustainability leaders will gather to hear Beth Keck, Sr. Director of International Sustainability at Wal-Mart and Karen Ho, Director of Business Engagement at World Wildlife Fund who is leading the certification effort in China and others speak about there efforts.