The risks of waiting for legislation: why Wal-Mart's green shift will affect you

While Canadian companies such as Interface Flor continue to prove that going green can create a huge competitive advantage, the vast majority of companies are playing the waiting game. Perhaps inspired by the Harper government's “integrated” approach (widely regarded as a euphemism for wait-for-the-Americans-to-act-first), many see going green as an expense rather than an investment, and prefer to wait for the government to even the field.

But what if a multinational business, say the world's biggest retailer, were to preempt legislation and create a domino effect? The wait-and-see companies would then be at a disadvantage compared to those that had acted before action became necessary.

Last month Wal-Mart volunteered to cut 20 million metric tons of CO2 from its supply chain, among other environmental targets, thereby forcing the company's more-than 100,000 suppliers to reduce their environmental footprints. A market leader for decades, Wal-Mart's influence can hardly be underestimated... other companies will inevitably follow suit in order to remain competitive.

The effects on the company's 1,300 suppliers in Quebec are immediate: they are suddenly confronted with the very real possibility of losing their biggest client – or at least prime shelf space - unless they make a sudden green shift themselves. One of them called me recently looking for help measuring and reducing impacts not only at their Montreal facility, but also across their supply chain within 12 months in order to meet Wal-Mart's standards.

Strategic change can be extremely beneficial, creating opportunities for in-house innovations and a better understanding what drives a company - but the ride can be very bumpy when change is imposed, especially when a deadline looms. When companies act early, going green is less about 180 degree change than an adaptation that gradually improves on current processes, allowing time to develop the sustainable actions that mesh with the companies existing strategies and processes to create value and build trust with employees, clients and suppliers.

Over time the strategies are reviewed, analyzed and improved thereby creating a snowball effect that allows companies to link sustainability with overall performance and improve both. The result is a competitive advantage which companies that wait for legislation or other field-evening pressures cannot hope to match.

And Wal-Mart isn't the only company going green. Loblaws, Canada's number one grocery store group has been working to reduce its supply chain impacts by working to remove endangered fish from its shelves by 2013 and increasing the number of products in its Organics line. Rona, Canada's leading hardware is also a leader in supply chain transparency and has begun evaluating the life-cycle impacts of many products it sells.

The green shift is happening with or without legislation. Is your organization ready to be a leader in the new green economy?