Tesco PLC

From Lauraibm

Current revision as of 09:47, 19 July 2007

MI Summary

Environmental Policy

Tesco aims to apply the principle of sustainable development, meeting the needs of the present without compromising future generations:

• Tesco, its directors, officers and employees will at all times comply with all applicable laws and regulations relating to the environment.
• We will develop, maintain and implement policies, procedures and management systems to assess and monitor, on a continuous basis, the environmental impact of our operations.
• We will set targets annually in order to achieve continuous improvement.
• All senior management shall be responsible for ensuring compliance with the Tesco policy, including the establishment of programmes and reporting requirements throughout their organisation.
• We will incorporate in our environmental practices the best available technology that is economically achievable.
• We will minimise the use of all materials and energy and not use any materials derived from endangered species.
• We aim to apply the principles of reduction, reuse and recycling to the management of our products and their packaging.
• We will communicate regularly with our stakeholders, including shareholders, staff, and customers, on matters of environmental policy and practices.
• Tesco is committed to reporting on its environmental performance through our website, www.tesco.com/corporate

(1)

Tesco PLC and Climate Change

There is now an overwhelming scientific consensus that climate change is happening. Scientists tell us that man-made emissions of greenhouse gases are a key factor, and that urgent action by governments, businesses and individuals is needed to combat it. This means there needs to be less reliance on fossil fuel, and that we must nurture the idea of a low-carbon society.

As a result, many customers now want to play their part. However, they need to help overcome some key barriers: a sense that their individual actions won't make a difference; a lack of information about what to do and a worry that buying products that help the environment is expensive.

Tesco is working to tacke these barriers so that we can help deliver a revolution in green consumption - with the fight against climate change at the very heart of it. We also want to set an example by reducing CO2 emissions in our business throughout the world, and by sharing information with other organisations, businesses and Government to stimulate a low-carbon economy.

Our approach We recognise that we need to do more than list a series of enivironmentally-friendly actions, although those do play their part. We are changing our business model so that the reduction of our carbon footprint becomes an important business driver. We have a comprehensive plan that has three key objectives:

• Helping our customers by making green choices easier and more affordable
• Setting an example by measuring and making big cuts in Tesco's greenhouse gas emissions around the world
• Working with others to develop new low-carbon technology throughout the supply chain

Customers: Green Choices

We will make it easier for customers to make green choices by:

Improving information: Working in the widest collaboration, we have begun the search for a universally accepted and commonly understood measure of the carbon footprint of our products covering their lifecycle from manufacture through to use. This will enable us to label all ouor products so that customers can compare their carbon footprint as easily as they can currently compare prices or nutritional profiles.

We are, for example, working with the Energy Saving Trust to develop stronger energy-efficiency labelling for our electrical products, from light bulbs to televisions.

As an interim measure, we have put an aeroplane symbol on all air-freighted products because this method of transport results in far higher carbon emissions than any other. We will also restrict air freight to no more than 1% of our imports with a bias in favour of sourcing from developing countries.

Lowering costs: We will offer more energy-efficient products through our Value range to help customers on tight budgets. We have begun by halving the cost of energy-efficiency light bulbs.

Inspiring children: With DEFRA and the Royal Society of Arts, we have launched Carbon Control to help educate children about the importance of a low-carbon lifestyle. It shows children how simple everyday choices for example, sharing a car for the school run or buying seasonal fruit can make a big difference. To find out more information visit www.carboncontrol.org.uk.

Rewarding 'green' choices: We are developing our Green Clubcard scheme to promote energy-efficient and other 'green' products, such as intelligent plugs that switch off appliances when they are not being used. We also use Green Clubcard to encourage customers to reuse and recycle. Last year, we began offering Clubcard points to people for reusing carrier bags, and our customers have responded by taking over 400 million fewer free plastic bags by the end of April 2007.

Increasing the use of biofuel: We are already the UK market leader in biofuels and during 2007 we aim to double the proportion we sell. This means that customers will be able to buy a 5% bioethanol mix at over 300 petrol stations in the UK. This helps our customers reduce their emissions, as a car driven with our bioethanol mix petrol is responsible for 4.5% less CO2. We were the UK's first major retailer to incorporate biofuel into our standard petrol and diesel, with no price premium.

We also use a 50:50 biodiesel mix in our own vehicles - the highest percentage blend used by any major distribution fleet. We have a 25% stake in biofuel supplier Greenergy, which has opened the UK's largest single-line biodiesel plant, on the Humber estuary, with an annual production capacity of 100,000 tonnes. Greenergy buys rapeseed for conversion to biodiesel from around 1,500 farmers contracted through Grainfarmers, a large agricultural co-operative in the UK.

Promoting 'green' consumerism: We are setting up a Sustainable Consumption Institute (SCI) to bring together experts from many different areas of environmental work: climate science, technology, economics and consumer behaviour. The SCI will help us to take forward our work on carbon footprinting and labelling, to identify particular pressure points in the supply chain, and to guide our business and our customers towards a low-carbon future. As a first step towards developing the Institute we have commissioned work from the Environmental Change Institute at Oxford University.

(2)

Tesco PLC and Resources

Energy Efficiency

Over the next five years we will spend more than £500m on low-carbon technologies to reduce greenhouse gas emissions in our business. We are also working with our suppliers to reduce emissions throughout the supply chain.

In May 2006 we established a £100m Sustainable Technology Fund to suport low-carbon technologies that are not yet fully economically viable, in the hope that we can make them so. we are investing in - or examining seriously - a number of technologies, including renewable energy such as wind turbines and biomass, combined heat and power, and gasification to turn food waste into power. we also consider opportunities for direct investment to make sure that firms with promising technology get the capital they need.

We have a target of halving energy use (kwh/sq ft) in our buildings by 2010, against a baseline of 2000. We will meet this target two years ahead of schedule, in 2008 - largely as a result of investing heavily in energy-efficient technologies such as low-energy fans, cold air retrieval systems, timers on lights and high efficiency refrigeration. Superstore managers have been given accountability for energy consumption, and our staff awareness campaigns include an energy training video produced with the Carbon Trust.

Our verified carbon footprint includes all our existing stores and distribution centres worldwide. We will reduce emissions from these buildings by at least 50% by 2020. We will also ensure that all new stores built between now and 2020 will emit, on average, at least 50% less carbon than an equivalent store built in 2006.

We have to date built three model 'environmental' stores in the UK, which we use as a test bed for the energy-efficient technologies we hope to roll out in all our stores. Our first such store, in Diss, reduced energy consumption by 29% compared with a standard Tesco store of similar size. At Swansea we achieved a 36% reduction. And our most recent environmental store, which opened at Wick in November 2006, has a carbon footprint 50% lower than similar stores.

In April 2007, after the end of the reporting year, we opened our latest environmental store in Shrewsbury, which reduced carbon emissions by 60% compared with a standard store.

(3)

Renewables

We want to find cost effective ways to reduce emissions by generating our own energy through renewables and low carbon technology. In 2006/07, our £100 million fund will enable us to develop wind turbines, solar panels, gasification, trigeneration and combined heat and power.

We are working with the Carbon Trust and Brunel University to develop trigeneration combined heat and power (CHP) technology for our stores and distribution centres over the coming year with the aim of saving over 10,000 tonnes of CO2. These units enable us to capture and reuse heat created through power generation to reduce our overall carbon footprint.

(4)

Refrigeration

As a food retailer, refrigeration currently accounts for over a third of our direct carbon footprint in the UK. The vast majority of large refrigerators in the food industry currently use HFC refrigeration gases - introduced as a replacement for ozone-depleting CFCs and HCFCs but which are now known to be extremely potent greenhouse gases.

Tesco is leading a programme to phase out HFC-based refrigeration. We have so far installed two alternative systems - one based on CO2 and one based on CO2 and hydrocarbon refrigerants. We are sharing what we learn with all interested parties to speed up and promote the use of natural refrigerants.

(5)

Water Consumption

Last year we missed our target of reducing water consumption by 5% per square metre in our UK businesses. We are putting measures in place to achieve our long-term goal of cutting water consumption in the UK by 15% by 2008/09.

(6)

Tesco PLC & Emissions

Vehicle Efficiency

Although our transport fleet accounts for under a sixth of our carbon footprint, we have made substantial progress in reducing its impact. Our vehicles now rarely travel empty after making a delivery, and we have invested in double-deck trailers which carry more products per load. As a result, last year we cut by 10% the amount of CO2 emitted to deliver a case of goods. Over the next five years we will reduce by 50% the CO2 emitted per case of goods delivered.

We are also investing in alternatives to distribution by road. We have already switched from road to rail for transporting goods from our Daventry depot to Scotland and are looking to do more of this, depending on future development of the rail freight network.

In April 2007, after the end of the reporting year, we opened our latest environmental store, in Shrewsbury, which reduced carbon emissions by 60% compared with a standard store. We will also run our Tesco.com home delivery fleet there on electric vans, saving 100 tonnes of CO2 per year, in addition to the 6,000 customer car journeys each van saves annually.

(7)

Biofuels

We are already the UK market leader in biofuels and during 2007 we aim to double the proportion we sell. This means that customers will be able to buy a 5% bioethanol mix at over 300 petrol stations in the UK. This helps our customers reduce their emissions, as a car driven with our bioethanol mix petrol is responsible for 4.5% less CO2. We were the UK's first major retailer to incorporate biofuel into our standard petrol and diesel, with no price premium.

We also use a 50:50 biodiesel mix in our own vehicles - the highest percentage blend used by any major distribution fleet. We have a 25% stake in biofuel supplier Greenergy, which has opened the UK's largest single-line biodiesel plant, on the Humber estuary, with an annual production capacity of 100,000 tonnes. Greenergy buys rapeseed for conversion to biodiesel from around 1,500 farmers contracted through Grainfarmers, a large agricultural co-operative in the UK.

(8)

Green Transport & Travel

Since the beginning of 2003, green travel plans for staff have become an integral part of our new store and store extension development proposals. We are committed to reducing the number of employees coming to work by car, through initiatives like walking buddies and car sharing. Where employees take part in these schemes, we guarantee them a ride home in the event of emergenicies. Staff can share lifts by registering at our dedicated website - www.tescocarshare.com and can take a bus between our main offices to help cut emissions and congestion.

(9)

Tesco PLC & Waste/Recycling

Approach

Tesco recognises that waste and packaging cannot continue to grow: landfill capacity is finite and the amount of energy and raw materials used is unsustainable. Our policy is to use the 'waste hierarchy' to deliver change - through waste minimisation, reuse and recycling. Disposal is considered the last resort.

The following targets frame our packaging and waste strategy:

• Reduce the amount of packaging on both branded and Tesco own-label products by 25% by 2010
• Label all our own-label packaging according to whether it can be reused, recycled or composted beginning in 2008
• Increase the proportion of waste from our own operations that we recycle from 71% in 2006 to 80% in 2009
• Double customer recycling at sites where we introduce automated recycling units from 2006 levels by 2008
• Cut the number of carrier bags given out by 25% by May 2008 compared to May 2006 As a signatory to the UK

Government's 2005 Courtauld Commitment, we are also committed to helping WRAP achieve the following three targets:

• Design out packaging waste growth by 2008
• Deliver absolute reductions in packaging waste by March 2010
• Identify ways to tackle the problem of food waste

(10)

Operations

71% of our waste was recycled during 2006/07. This included over 80% of our paper, cardboard and plastic. Over the last seven years, our reuseable 'green trays' have helped us to replace the cardboard boxes and other packaging used to transport and display products. In 2006/07, 224 million green tray trips wee made, saving over 132,000 tonnes of cardboard packaging.

To reduce further waste we send to landfill, in July 2006 we started supplying surplus food from 35 stores to the charity Fare Share, which distributes it to the needy. Our Elephant and Castle store in South London supplied over 200kg of food. In 2006, Fare Share provided 3.3 million meals to 350 organisations. Over the coming year we hope to supply Fare Share with surplus food from many more of our stores - initially around Bristol, Sunderland, Glasgow, Leeds and Aberdeen. We are also continuing to explore the option of gasification to generate energy from the 120,000 tonnes of general waste produced each year. We participated in WRAP's round table on food waste in 2006, and are also investing the viability of composting and anaerobic digestion.

Making our packaging more 'retail ready' is also a key strategic focus, particularly where this reduces overall waste. For example, we are now using reusable plastic flower buckets as an alternative to cardboard packaging, saving 150 tonnes of cardboard.

Product packaging In 2006 we carried out a packaging review, and developed guidance with WRAP on the principles of minimisation, reuse and recycling, which have been distributed to Tesco buyers and technical managers. The guidance has already helped us to draw together new plans to reduce packaging on our 'hardline' products such as consumer electricals and toys, leading to reductions of up to 90% in the packaging used.

Over the last year, we have focused our efforts in the following areas:

Reducing the amount of materials used:

• Glass is the biggest single contributor to the packaging weight we pass on to our customers. We have been leading a project with WRAP to reduce the amount of glass used in wine, spirits and beer packaging. By challenging the industry to produce lighter weight wine bottles, we have reduced our annual glass usage by 2,600 tonnes from one single supplier, a 15% saving. And by importing New World wines in bulk and bottling them in lightweight glass in the UK, we have saved an estimated 4,100 tonnes of carbon emissions.
• Packaging on produce has been reduced by 10,300 tonnes this year, through removing packaging such as liners where we could, reducing the types of packaging (trays, film and labels) and introducing reusable packaging such as collapsible and returnable crates.
• We have also been using 'best in class' data to ensure that our own-brand products use the lightest weight packaging currently available.
• By using one label instead of two to label clothes, we have halved cardboard use in this area.

Using recycled materials in our packaging:

• We are introducing a new tray for bakery products. Made from 60-80% recycled plastic, it will divert at least 210 tonnes of plastic going into landfill each year. The tray is also 100% recyclable where facilities exist. A lack of available recyclate in the UK means we currently have to source it from Europe. However, we hope that our own in-store recycling facilities will soon provide source material.

Making packaging more valuable to recycle:

• We have started using glued plastic labels on soft drinks bottles instead of paper.

Introducing compostable and degradable packaging:

• 20% of our Organics range is now in fully home-compostable packaging, with a further 60% in degradable packaging - converting 855 tonnes of plastic packaging.

We participated in WRAP's retail round table on biodegradable packaging in February 2007.

During the year, we collected data to understand how much of our packaging is recycled/recyclable/compostable/easily lightweighted in order to set clear targets. In April 2007, we committed ourselves to reducing the amount of packaging on both branded and Tesco own-label products by 25% by 2010.

(11)

Customers

Recycling is a key issue for our customers and we aim to make it even easier.

As part of our commitment to double customer recycling by 2008, we have developed market-leading recycling facilities. Our innovative automated recycling units, introduced in 2005, sort plastic, metal and glass so our customers don't have to. The units then shred the waste so that more can be stored, reducing the frequency of collections.

On average, the installed units are now collecting around eight tonnes of waste for recycling every week, double the amount that our previous customer facilities collected. By February 2008, we plan to have these units at 106 stores - an investment of over £15m this year. We hope to be able to sell materials collected in these units to our packaging suppliers to ensure it goes back into Tesco packaging, thus closing the recycling loop.

We are also undertaking a trial where customers are given the incentive of Green Clubcard Points for the waste that they recycle in the unit.

To help customers further, we have also introduced Green Clubcard Points on mobiles and inkjet cartridges (up to 500 points per mobile and 100 points for an inkjet cartridge). Our mobile phone recycling scheme is the most successful of its kind in Europe, so far collecting 800,000 handsets.

Since 2003, we have collected and recycled 800,000 inkjet cartridges.

For the sixth year we have worked with the Woodland Trust to collect christmas cards for recycling, with customers bringing around 75 million cards back to our stores. This equates to around 1,500 tonnes of cardboard in 2006/07, up 300 tonnes on last year. We are also working closely with operators to improve textile recycling facilities on our sites, and are currently participating in WRAP's trial for the collection of batteries in store.

Carrier bags In August 2006 Tesco became the first supermarket to reward customers for reusing carrier bags, by giving them a Green point on our loyalty Clubcard scheme for every bag reused. This followed customer research which confirmed our belief that we should reward positive behaviour rather than trying to force change.

We hope that this step will enable us to cut the number of bags we give out by 25% over the next two years - a total of one billion bags saved. With the help of a major national television advertising campaign and an investment of more than £1 million in staff training, we are well on our way to achieving this ambitious target. By April 2007 we estimated that we had given out 400 million fewer bags, roughly 13 million a week saved.

We are also replacing our standard carrier bag with one that is bigger and stronger, saving the overall amount of plastic used as well as the number of bags. Early indications showed a 39% reduction in the number of bags used in store once the new bag is introduced. We have also introduced a new range of our 'Bag for Life', in a variety of sizes, designs and materials.

In August 2006 we also made a commitment to use degradable plastic for all of our standard carrier bags in the UK. By February 2007 around 75% of our bags were degradable. These new bags break down in as little as 60 days with no harmful residue. These bags can also be recycled, unlike biodegradable bags.

We were the first retailer to sign up to a new UK Government Voluntary Code on carrier bags, launched in February 2007. This aimed to cut the number of bags used, reduce the environmental impact of each bag and increase bag recycling rates.

Customers can recycle carrier bags at all our stores, except Express, and these bags are recycled into new plastic products such as black bin bags. Our home delivery drivers also now collect customers' bags to take back to the store for recycling.

(12)

Sources

• 1. Environmental Policy
• 2. Climate Change
• 3. Energy Efficiency
• 4. Renewables
• 5. Refrigeration
• 6. Water Consumption
• 7. Vehicle Efficiency
• 8. Biofuels
• 9. Green Transport & Travel
• 10. Approach to Waste & Recycling
• 11. Operations in Waste & Recycling
• 12. Customers and Recycling