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Wal-Mart creating environmental index for its goods Add to ...

Wal-Mart Stores Inc., the world's biggest retailer, will announce Thursday the development of an index that will be used to measure the social and environmental impact of the products it sells in its discount stores.

The information could be used to one day provide consumers a label assessing how "green" or "sustainable" a product is.

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"In 2005, Wal-Mart set an aspirational goal to sell products that sustain our resources and environment," states Matt Kistler, Wal-Mart's senior vice-president of sustainability, on a website discussing the index.

"While important strides have been made in this area, we believe that to drive Wal-Mart's supply chain towards sustainable business practices we need a way to measure each of our current and potential products against this goal."

Wal-Mart has reached out to professors and environmental groups for help in developing the index. The retailer said it will be used to evaluate its 60,000 suppliers and determine which merchandise winds up on its store shelves.

Company spokesman David Tovar said the retailer was not providing any comment on the event being held Thursday.

Wal-Mart has laid out the far-reaching goals of one day using only renewable energy and creating zero waste.

Since launching its environmental push in 2005 under former CEO Lee Scott, it has challenged the thousands of manufacturers that make the products it sells to cut waste, use renewable resources and produce products that can be easily recycled.

Because of its status as the world's largest retailer, Wal-Mart is considered one of the few companies with enough heft to force its suppliers to change. Those that do not could face the prospect of losing Wal-Mart's business.

In October, Wal-Mart held a summit in China where it said it would enforce stricter quality and environmental standards for suppliers in that country, even if that could pressure margins and result in higher prices.

Wal-Mart shares were up 21 cents, or 0.5 per cent, at $48.35 in afternoon trade on the New York Stock Exchange.

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