1. How would you define what a sustainable product is? How could you measure it? Who should define the standards of what counts as sustainable? A sustainable product is a product that provides opportunities to reduce costs and improve environmental performance. The product cannot negatively impact society and the environment. It should positively impact the well-being of mankind. The parties involved in manufacturing, selling, and purchasing the product become a good steward of the environment by engaging in the commerce of such a product. Sustainability should be measured by a third party with no conflict of interest such as a tax auditor. A third party should define the standards of what counts as sustainable with the involvement of NGOs, market players, consumers, and activists in order to define an agreed upon set of standards that will be adopted by all. 2. Assume you are the senior Vice President for Sustainability at Walmart. What is your analysis of the problem (from Walmart's perspective) of defining sustainable products? Selling sustainable products was not possible unless Walmart could find a means of defining, measuring, and communicating its chosen environmental or sustainable standards. Walmart debated whether or not it should "establish a new set of product standards in-house, buy or license an existing set of standards on the open market, or lead a collaborative effort to develop public standards, together with other large corporations and stakeholder groups?" Sustainable products are not consistent across industries, geographic regions, or companies. Standards for what is a sustainable product are not defined. Environmental advocacy groups had attacked Walmart and its suppliers after making an effort to introduce sustainable products. These groups would assert that "some of the products simply did not live up to their environmental claims. It became essential to the validity of Walmart's sustainability efforts that the company would use a measurement system that would provide a consistent framework to measure the relative sustainability of products. While consumers increasingly pressured companies to produce and sell environmentally friendly products, no one knew exactly what constituted a sustainable product. Several measurement models emerged, but the inconsistency between them led to more confusion for consumers and suppliers of Walmart. This developed a large reputation risk for the company. Walmart was expected to take action as one of the world's largest companies. 3. What role should Walmart play in developing product environmental standards? Should it volunteer to lead standard-setting efforts? Should it develop standards in-house (buy or make) or collaborate with others to develop collective standards open to all? Or should it do nothing at all? What are the pros and cons for each of its options? What would be your action plan? The role that Walmart should play in developing product environmental standards is to become a certified B-Corporation. Walmart should not develop standards in-house or collaborate with others to develop collective standards open to all. These standards have already been developed by B Lab. In developing standards and an index, Walmart would need to gather comparative information on many products. It was impossible to gather and manage the information without the help of other firms. While it would require substantial market power to persuade others to provide information that Walmart had, it was not a core capability of Walmart to do so. Today, there are more than 800 Certified B Corps from 27 countries and 60 industries. The information already exists for these companies and is held and managed by B Lab. Walmart could focus on doing what it is in the business so accomplish and leave efforts around sustainability standards development to B Lab, who already takes care of. Another concern involved the credibility of the index if Walmart developed it. A private standards index for suppliers would present the potential risk that the index would be perceived by outsiders as using scientific standards that would benefit Walmart itself. Credibility of the index depends on a multi-stakeholder process for developing the standard. The standards must be audited without any conflicts of interest. Because B Lab developed the standards and measurement index with the help and input of multiple stakeholders, credibility holds. The B Corp standards have been audited. Performance in meeting these standards is measured without any conflicts of interest. Walmart worries about who will develop and run the index as it is not in the business to do so and it is not in Walmart's best interest to do so. This concern is solved because B Lab develops and runs the index. In becoming a certified B Corporation and adopting the standard set by B Lab, Walmart will lose control of the situation. By adopting the standards set by B Lab, Walmart will not have to endure the costs of developing standards and an index. Its credibility is defined by maintaining B Corp status. Walmart can play a huge role in making the standards of a certified B Corporation the standards of sustainability across the world because Walmart would be the largest certified B Corporation. Its market power and ability to move supply chains would have a huge impact on setting the standards universally. Walmart has the opportunity to make an impact on the sustainability of the world. Walmart should use its sustainability department as a team solely devoted to transforming the company into a qualified B Corporation. Walmart should then apply to become a certified B Corporation. Once it is certified as a B Corporation, the sustainability department should devote its efforts on maintaining the status and finding ways to grow the business in a sustainable manner.