Walmart’s Sustainability Call Equals Opportunities for Carbon, Water, Waste Accounting

Walmart plans to ask all of its more than 100,000 suppliers to show how sustainable they are. Helping them prove it could become a big business.

The world's largest retailer announced Thursday that it would start asking suppliers to track their greenhouse-gas emissions, water usage and waste production, among a host of other social and environmental items.

That's the first step in a multi-year plan that will eventually lead to a consumer label that can tell Walmart shoppers how sustainable each product is, the company said. To get there, Walmart wants other retailers, suppliers, governments and non-profit groups to join a consortium to come up with standards that can be applied to every retailer, not just itself.

But while that labeling system may be years away, Walmart's U.S.-based suppliers have been asked to answer its 15-point initial sustainability checklist by October.

And for many, the first question on the list – "Have you measured your corporate greenhouse gas emissions?" – may provide a kick in the pants to the small but rapidly growing field of carbon accounting.

Companies promising software and services to track carbon emissions have a relatively small market of $10 million or so today in the United States, according to a study released last month by Groom Energy Solutions and Greentech Media.

But it's expected to double each year or so, the report says – and while impending national cap-and-trade legislation now being debated in Congress is one reason, meeting the demands of the public for more sustainability information is the driver today, says Paul Baier, Groom Energy's vice president of consulting (see Carbon Accounting: It's All About Appearances).

Carbon accounting startups have been getting venture capital interest - and have been getting acquired – as a result. Startups Planet Metrics and Carbonetworks raised millions in the past year (see PlanetMetrics Launches Carbon Modeling, Raises $2.3M).

Fellow startups Clear Standards and eQuilibrium Solutions were bought by SAP and demand response aggregator EnerNoc, respectively, in the past (see stories here and here). And enterprise software giants like IBM, Microsoft and CA are entering the carbon management field, Baier said (see IBM Focuses Supply Chain Heft on Green).

Walmart's request that suppliers report water use and the solid waste generated from their facilities could give a boost to companies that track those as well. That includes IBM, which has made water management a new line of business (see IBM Dives Into Smart Water Management).

Software startup Hara, which promises to track energy, water and fuel use and waste production, among other metrics, landed $6 million from VC powerhouse Kleiner Perkins Caufield & Byers earlier this year and is working with clients including Coca-Cola (see Energy Management Startup Nara Grabs Coke as Client, $6M From Kleiner).

Most companies use spreadsheets to calculate things like carbon emissions, water use and waste output nowadays. Whether or not that level of tracking will be sufficient for Walmart's purposes remains to be seen, but it has come under criticism from both a environmental responsibility and a business efficiency standpoint.

Nonprofit groups Trucost and Investor Responsibility Research Center Institute released a report in June saying that two-thirds of the companies listed on the S&P 500 index don't disclose enough information about their greenhouse-gas emissions.

And an IBM report last month said that most companies it surveyed weren't collecting data on internal sustainability efforts frequently enough to use in business decision-making (see Corporate Social, Environmental Efforts Need More Data, IBM Says).