News

According to Wal-Mart’s website, everything the world’s largest retailer does is driven by a “common mission to save people money so they can live better”.

No one could argue too much with the objective but, in the packaging industry at least, there are some concerns about the means to achieving it.

One of Wal-Mart’s latest business management tools is its packaging scorecard, which requires suppliers of goods to submit data on their packaging and its environmental performance against nine criteria (see below).

Following trials with consumer goods suppliers in the US since February 2007, Wal-Mart will roll out the scorecard from this month nationwide with a view to it influencing buying decisions.

Its UK business, Asda, will follow suit with its own version next year, and the industry has welcomed pledges by Asda packaging buyer Shane Monkman that he will adapt the scorecard to meet UK circumstances.

Although more than 3,400 companies had logged on to the Wal-Mart scorecard website by September 2007, entering the details of 13,000-plus products, fundamental concerns remain about the ability of such a scorecard to fully assess the sustainability of individual packs.

Indeed, one US source claims it is mainly a way for Wal-Mart to make its logistics more cost-effective. “A square pack scores very highly,” says the source, “because the scorecard is about shelf space, warehousing and transportation.”

Another US source is less diplomatic, claiming the scorecard is “the most ridiculous thing I have ever seen”.

“There’s no way you can give a pack a score,” she says. “There are too many variables and too many trade-offs.”

Although she concedes that Wal-Mart’s initiative will “probably be positive for the environment because it’s forcing everybody to look at issues they hadn’t looked at before”, she says the retailer’s approach has major flaws.

For example, she says laminates are only scored on the merits of their majority material, so suppliers will not get any credit when they use a material with major environmental benefits if it’s not the main component.

The source also says Wal-Mart is still working on values for two of its scorecard’s nine categories, so it has told suppliers to all enter the same score for their performance in these areas. Wal-Mart declined to comment on these claims in advance of announcements scheduled after Packaging News went to press.
Steve Kelsey, partner at UK design agency PI Group, says the scope of the scorecard is limited because it “focuses on the retailer’s world, which is only a part of the supply chain and therefore not complete”.

Flawed scoring
Julian Carroll, managing director of the European Organisation for Packaging and the Environment (Europen), delivered a particularly critical appraisal of the scorecard at the Annual Sustainable Packaging Forum in Pittsburgh last September, saying its aggregated result “cannot be scientifically validated”.

Carroll also said the scorecard was flawed because its evaluation of the recovery value of packaging excluded primary packaging taken by consumers and only focused on packaging that remained in the custody of Wal-Mart.

Significantly, with Asda’s move in mind, he said the UK was similar to the US because it had not established a nationwide system to collect and manage household packaging waste, and was the exception to the general rule in Europe that legislative pressure had been the main instrument for environmental improvement.

Speaking to Packaging News, Carroll says his speech last September had the “full support” of Europen’s membership, which includes major brand owners and packaging groups such as Rexam, Mondi, Amcor and Ball.

He also highlights a concern raised by others in the UK – that rival retailers might develop their own environmental scoring tool, creating confusion and added complexity for suppliers.

“There’s probably a reluctance among other retailers to be seen to be aping Wal-Mart,” he says. “But if all the retailers do different things, it will cause problems if you are a global or pan-European brand. UK retailers are rolling out these [environmental] initiatives without adequate consultation with other actors in the supply chain.”

For the time being, it does not look like the UK’s other major retailers are developing their own versions of the scorecard, concentrating instead on hitting well-publicised targets on issues such as glass lightweighting and increased recycled content.

However, that’s not to say there’s no chance of a future industry standard being developed. The British Retail Consortium, the trade association for UK retailers, says there could “ultimately be some sort of industry-wide scheme for assessing suppliers’ packaging performance”.

Whatever happens in the future, though, packaging sustainability moved irreversibly into the mainstream when Wal-Mart, with its annual sales of £175bn ($345bn) amounting to more than the GDP of Poland or Saudi Arabia, decided to place the issue right at the heart of its business.