Sustainability Scores and Small Business

Small companies looking to break into major retailers these days have to contend with something other than just coveted shelf space:  Their sustainability “score.”

Increasingly, big-name corporations are assessing and selecting their suppliers based on environmental benchmarks. The concept gained traction when Wal-Mart a few years ago unveiled ambitious plans to assess suppliers using its “Sustainability Index,” which considers everything from packaging materials and waste disposal to energy efficiency and greenhouse gas emissions. In 2009, the retailer began sending 15-question assessment forms to 100,000 U.S. suppliers and plans to eventually start labeling products in the store based on their overall environmental friendliness – similar to a nutritional label on food.

In recent weeks, Procter & Gamble and Kaiser Permanente launched similar types of programs. (Some companies, such as Patagonia, have utilized such sustainability assessments of suppliers for a long time.)

Major corporations figure they have the leverage to push environmentally friendlier practices onto their suppliers, and such initiatives, of course, bolster their own reputations as a eco-conscious companies.

But what does this mean for the suppliers, or wanna-be suppliers? It’s more important than ever for small businesses to know their total environmental impact and, if they don’t, to figure it. Wal-Mart’s assessment, for instance, asks its suppliers for detailed information including: “Do you know the location of 100% of the facilities that produce your product(s)?,” “Have you publicly set solid waste reduction targets?” and “What are your total annual greenhouse gas emissions in the most recent year measured?” (Read all of Wal-Mart’s 15 supplier questions.) Procter & Gamble’s assessment gives extra points for using renewable energy.

Small businesses hoping to work with these large corporations should anticipate questions about their environmental practices when they pitch company representatives, and thus be prepared with answers. The more details and real numbers you can mention, the better.

Here are some of the steps a small company can take to ensure its up to snuff when it comes to sustainability scoring:

• Evaluate packaging. Too much packaging creates waste and consumes carbon to produce and transport. Seek ways to keep packaging minimal and use recyclable materials whenever possible.
• Reduce energy usage. Make sure your business is energy efficient, since energy use a big factor in many of the sustainability indexes. Use high-efficiency lights, such as carbon fluorescent lights (CFLs), LEDs or T-8 fluorescents, whenever possible and employ other energy-saving tactics. The government’s Energy Star program offers guidance to small business.
• Select your suppliers carefully. The sustainability indexes don’t just look at your business’s green practices – they care about your suppliers’ and manufacturing facilities’ practices as well. Make sure you do your own assessment on environmental practices when determining which suppliers to use.
• Find organizations that can help. Some local non-profits, economic development initiatives and local governments are dedicated to helping businesses in their area lower their environmental toll. Do an Internet search for groups in your area or ask around. You may be able to get free help.

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