Wal-Mart is taking the reins in furthering transparency in environmental costs by telling suppliers that they need to determine these costs which Wal-Mart will then turn into a score that will appear next to the product on the shelf.

Wal-Mart Stores Inc. unveiled an environmental labeling program for the products it carries, in a step that could redefine the design and makeup of consumer goods sold around the globe but also boost costs for suppliers and customers.

Wal-Mart Thursday will tell suppliers they must calculate and disclose the full environmental costs of making their products, then allow Wal-Mart to distill the information into a rating system that shoppers will see alongside prices for everything from T-shirts to televisions.

Costs of the program will initially be borne by the suppliers, many of whom are already in shaky financial positions due to the economy.  Eventually, though, prices may rise as a result of this initiative but Wal-Mart feels that its customers born in the 1980s and later will be more willing to pay higher prices to have this information (and they may very well demand this kind of information).

Eventually, through product labels, the experiment will test whether consumers pay more for environmentally superior products. Wal-Mart does not believe consumers now are prepared to pay much more, but it believes that will soon change as those born in the 1980s become the company’s primary customers.

I expect other retailers to follow suit with similar plans especially since many of the suppliers deal with other companies and they may figure that if they are computing these costs for Wal-Mart there is little additional expense to provide the figures to their other customers.  Time will tell how widespread this practice becomes.

Wal-Mart to Assign New ‘Green’ Ratings. Miguel Bustillo. Wall Street Journal. (Eastern edition). New York, N.Y.: Jul 16, 2009. pg. B.1

Corporate News: What ‘Green’ Labels Can Tell Us — Wal-Mart’s Move Will Add to the Clash of Claims on Store Shelves. Jeffrey Ball. Wall Street Journal. (Eastern edition). New York, N.Y.: Jul 16, 2009. pg. B.4