Wal-Mart Brazil Thinks Green

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This meeting will change how business is done in profound ways, but nobody knows it yet. Here's one critical question: How long will it take NGOs, consumers, or other pressure groups to realize that the Brazilian operations of these multinationals just agreed to source no products that damage the Amazon? How long before they ask the U.S., EU, or global operations why they haven't set the same goal?

Or another one to ponder: How long before retailers ask suppliers to ban other practices or sourcing strategies? Imagine demands for no hormones or antibiotics in meat or dairy, or for production methods that are water-net-neutral (take no water from aquifers that isn't returned), or for proof of equal pay for women...who knows what will be on the table soon? Forcing change in one part of a multinational organization creates ripples around the globe. Innovators will embrace these commitments or get ahead of them.

These kinds of pacts will radically change the economics for certain production methods and sourcing strategies. For example, Amazonian-sourced beef will soon become much less valuable. On the flip-side, non-Amazon products will find their value rising.

So back to the giant elephant in the room. It's common practice in the sustainability world to place a lot of caveats around declaring Wal-Mart a sustainability leader. So here it goes: Yes, the company has many challenges in areas from health care to pay. Yes, the tracking and transparency challenges of implementing these goals are substantial. Yes, nobody knows what sustainable consumption looks like and whether Wal-Mart's model can fit it at all. But we're not going to stop global consumption, so we better figure out how to get sustainable with the biggest players, not in spite of them.

Who would've imagined Wal-Mart as the answer to some of the toughest questions around? Brazil is facing heat globally about its forests, and it struggles daily with how to manage competing economic and development needs. It seems almost unimaginable that the solution may come from market pressures and from a giant retailer. But now we can picture a world where everyone stops buying beef from cleared land.

It's time to stop denying a major fact: Wal-Mart is changing the world for the better and is setting the new pace in corporate sustainability. The rest of the business world—let alone the politicians still debating action on climate—can only try to keep up.

Provided by Harvard Business—Where Leaders Get Their Edge

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