Wal-Mart and other companies, including P&G, Cargill, Disney, Monsanto, Tyson and Pepsico are founding partners of SC. Asked whether it’s appropriate for these corporate behemoths to be involved in setting standards that will ultimately be used to evaluate their own products, Golden explained,

“You need input from these companies to make effective, feasible, cost-effective and timely rules.” Wal-Mart’s participation is a huge plus for SC’s far-reaching agenda, he said. “Wal-Mart stepped up and made a commitment, and having the world’s largest retailer involved adds a lot of strength to our efforts.”

A Tool for Customers and PR

In five years, Wal-Mart is planning to have sustainability scores on its products that will inform customers of the product’s sustainability, quality and history, Waddoups said. Wal-Mart and SC are working on how best to deliver this information to consumers.

The Sustainability Index initiative has certainly enhanced Wal-Mart’s eco-credentials, but Nelson Lichtenstein, author of “The Retail Revolution: How Wal-Mart Created a Brave New World of Business”, and a history professor at the University of California, Santa Barbara, is cautionary.

“Wal-Mart is improving its supply chain and getting greener, but it’s classic Wal-Mart — it throws the burden onto its supply chains because it can squeeze them and they will scramble to do this by squeezing some other part of their business. At the bottom of the chain, you find perverse things going on — they take it out on the workers,” he said.

Lichtenstein believes the sustainability drive is “partly a political process to get out from under bad press.”

The effort appears to be paying off. Wal-Mart earned the rating of “greenest company” in a recent Green Confidence Index survey.

The Power of the Sustainability Push

Regardless of Wal-Mart’s motives, because of its scale, the positive implications of its Sustainability Index could be a sea change for its $400 billion business, over 100,000 global suppliers, millions of customers around the world and the environment.

Take a look at some of the actions Wal-Mart is already taking to green its supply chains:

Packaging:

Wal-Mart‘s goal is to reduce packaging by 5 percent by 2013, which would be equivalent to removing 200,000 trucks from the road annually and would save the company an estimated $3.4 billion.

The retail giant already only sells 100 percent compacted liquid laundry detergent, having removed all unnecessary water from the product. According to Amy Zettlemoyer-Lazar, director of packaging for Sam’s Club, “That change alone will have saved, over the next three years, an estimated 400 million gallons of water, more than 95 million pounds of plastic resin, 125 million pounds of cardboard, and untold millions of dollars in transportation costs from moving smaller products.”

Energy Efficiency:

After improving energy efficiency in its own stores, Wal-Mart sent its engineers to do energy audits of some suppliers as part of its Supplier Energy Efficiency Project (SEEP).

One supplier, the von Drehle Corporation in North Carolina, which produces paper products, replaced antiquated lighting with fluorescent and installed motion activated sensors upon the recommendations of the energy audit and ended up saving $37,000 a year in one facility alone.

Wal-Mart is working with suppliers to reduce the energy use of its most energy intensive products 25% by 2011. Because a major expense of doing laundry is the cost of heating water for washing machines, Wal-Mart worked with P&G to formulate a cold water detergent.

Each year, Wal-Mart and Sam’s Club sell billions of dollars of electronic products, many of which continue to draw phantom power even when they’re off, so Wal-Mart is working directly with suppliers to reduce phantom power in all their products.

Organic Farming:

As the world’s largest purchaser of organic cotton, Wal-Mart is partnering with 1,000 cotton farmers to help convert millions of acres of land from chemical to organic farming. Because the transition to organic farming takes three years, during which farmers cannot charge organic cotton prices, the retailer is paying the farmers organic cotton prices beginning the first year.

One of the largest purchasers of wild cod and farm-raised seafood, Wal-Mart has also committed to purchase all wild-caught fresh and frozen fish from Marine Stewardship Council-certified sustainable fisheries by 2011.

Company Culture:

To green its company culture, Wal-Mart encourages all employees to brainstorm ideas for more sustainable practices. At the November Global Sustainability Milestone Meeting, a flower department associate related how they realized they could ship fresh flowers in dry packs instead of water, saving water, and space and money in transport. Instead of flying all job candidates to the Bentonville, Ark., headquarters, the head of corporate recruiting now conducts Webcam interviews. In 45 days, the department did 55 virtual interviews, but flew in only 10 candidates, saving $45,000 and thousands of pounds of carbon emissions.

Consumers Want Green Goods