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Solar Industry Impacts of Wal-Mart´s Sustainability Index

Post Time:Aug 25,2009Classify:Industry NewsView:277

Wal-Mart’s unveiling of a sustainability index at their July “Sustainability Milestone Meeting” is shining a spotlight on supply chain management and product lifecycle analysis (LCA). Comprised of 15 questions, the index asks each of Wal-Mart’s suppliers to evaluate themselves on how they are addressing environmental and social issues, ranging from reducing greenhouse gas (GHG) emissions, waste, and water usage, to ensuring responsible sourcing of materials and business practices along their own supply chains. While the index has been variously hailed and criticized, most analysts agree that the world’s largest retailer throwing its weight behind such an initiative has the potential to affect change across many companies’ operations and product development. In fact, Wal-Mart´s approach is likely to emerge as a de facto standard in defining and enforcing corporate environmental responsibility.

What does this mean for solar?

On the plus side, Wal-Mart has already set an example for using photovoltaic power, and perhaps now more of their suppliers will follow that lead as they work to reduce their GHG emissions. At the same time, however, solar companies can and should expect to come under increasing scrutiny for their own product sustainability. This would of course be especially true for any company that might seek to sell do-it-yourself solar kits or plug-and-play PV systems through Wal-Mart in the future. These companies would be obligated to complete the index survey. Other companies should also be prepared to come under increasing scrutiny as general concerns with supply chain management and product lifecycle are brought into sharper focus. In fact, it may be an interesting exercise for all solar companies to look at Wal-Mart’s 15 questions and think honestly about how you would answer them.

Traditionally, solar companies have enjoyed being solution providers for corporations that are working to reduce their carbon footprints. Among electricity generating technologies—and particularly when compared with traditional electricity generation—solar power certainly offers significant environmental benefits, including a small carbon footprint and short energy payback time. Yet, opportunities for improvement remain at every link of the supply chain, from material sourcing to cell processing, module manufacturing, system design, distribution, siting, installation and product disposal.

The consumer and regulatory pressures will differ by value chain stage, location and other issues. However, at some point in time, those companies that do not make a Wal-Mart-type commitment are likely to be harshly judged for failing to align their practices with the values attributed to them as vendors of environmentally-friendly products and services.

Some solar companies are already public about their efforts in this area and are making progress toward greater sustainability. Among these companies are module manufacturers who are focusing on product lifecycle, with particular emphasis on how products are disposed of when they reach life’s end. The module recycling programs of First Solar and Deutsche Solar AG are profiled in the March/April 2009 edition of Renewable Energy World Magazine.

Although the recycling processes of these companies differ, the rooting of their programs in deeper commitments to and strategies around sustainability is essentially the same. In the article, Karsten Wambach, who oversees lifecycle assessment and recycling for Deutsche Solar, is attributed with saying that “the company (Deutsche Solar) was conceived with an environmental policy along the whole value chain, and is fundamentally concerned with optimizing the entire process on an economic and environmental basis.” Lisa Krueger, Vice President of Sustainable Development at First Solar, is attributed with saying that “the company’s (First Solar’s) policy of ‘Product Life Cycle Management’ or extended producer responsibility formed part of its earliest foundations.”

These comments indicate that the first step for other manufacturers is developing an overall sustainability plan, followed by analyzing the lifecycle of their product(s). A recent whitepaper by Deloitte—which was published following the announcement of Wal-Mart’s sustainability index—provides an introduction to lifecycle assessment and describes a few different approaches.

You can also learn more from Lisa Krueger about First Solar’s approach and experiences during the AltaTerra Research web conference, “First Solar: Toward a Sustainable PV Industry” on Tuesday, August 25th.

This is the first event in AltaTerra’s Solar Industry and Sustainability Series. The series recognizes that the intersection between corporate environmental sustainability and clean technology is as much about the companies that offer green products and services ensuring that they are as environmentally sustainable as possible, as it is about Fortune 1000 companies installing green power solutions. In shedding light on this topic, the series reflects one of the ways in which AltaTerra takes an integrated approach to corporate environmental sustainability and the commercial marketplace for clean technology solutions.

Source: SunWizeAuthor: shangyi

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