Tesco

RATING

SECTOR

Consumer Defensive

WEBSITE

CONTACT

Tesco House

Shire Park Kestrel Way

Welwyn Garden City AL7 1GA

United Kingdom

STOCK EXCHANGE

LISTING

4th on FTSE 100 Sustainability

EMPLOYEES

450,000

CHIEF SUSTAINABILITY OFFICER

Alison Rothnie (Head of Corp. Responsibility)

Mark Little (Head of Sustainability – Sourcing and Waste Policy)

Kate Blacker (Sustainable Packaging Developer)

AWARDS

MSC ‘Fish Counter of the Year’ Award 2017

CONTENT SOURCE

FURTHER READING

Tesco

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

Tesco provides retailing and associated activities in the United Kingdom, China, the Czech Republic, Hungary, Ireland, India, Japan, Malaysia, Poland, Slovakia, South Korea, Thailand, Turkey and the U.S. They are the market leader of groceries in the UK (where it has a market share of around 28.4%), Ireland, Hungary and Thailand.

The first Tesco shop opened in 1931. Originally a UK grocer, Tesco has expanded globally since the early 1990s, with operations in 11 other countries in the world. Since the 1960s, Tesco has diversified into areas such as the retailing of books, clothing, electronics, furniture, toys, petrol, software, financial services, telecoms and internet services. 

In the 1990s,Tesco repositioned itself from being a down-market high-volume low-cost retailer, to one designed to attract a range of social groups by offering products ranging from low-cost “Tesco Value” items to its “Tesco Finest” range.

Company Sustainable Activity

In 2019, Tesco scored 60th in the SAM ESG, and 4th in FTSE 100 Sustainability ranking and report. They developed a private-label “Tesco Nurture Certification”  for agricultural produce. This certifies that a supplier or producer’s products come from environmentally friendly, socially responsible, and sustainable cultivation.

Partnerships: Tesco has launched new partnerships with WWF and the Prince’s Trust, and built on ongoing relationships with its Health Charity Partners – Cancer Research UK, Diabetes UK and the British Heart Foundation – and with food banks around the world. As members of the UN Global Compact, Tesco continues to collaborate with others to support the achievement of the UN Sustainable Development Goals. Through its membership of Champions 12.3 Tesco is working to accelerate action to reduce food waste globally.

Tesco are members of Malawi Tea 2020, a coalition that brings together tea producers, trade unions, international tea buyers, NGOs and donors, with the objective of paying tea workers a living wage by 2020. The coalition has helped bring about the first ever collective bargaining agreement between the Tea Association of Malawi and the Plantation Agricultural Workers Union.

Sourcing: Tesco’s Responsible Sourcing Managers, on the ground across the world, work with suppliers to ensure its products are sourced with respect for the environment and the people involved. All Tesco’s UK Own Brand bananas and black teas are Rainforest Alliance Certified™. In 2019 Tesco announced that 100% of the cocoa sourced for its UK Own Brand chocolate products, as well as all its green coffee beans, are also now Rainforest Alliance Certified™.

In 2017, Tesco became signatories of the Taskforce on Climate-related Financial Disclosures (TCFD). By doing so, the company has committed to be transparent about the short- and long-term risks to its business associated with climate change and its efforts to mitigate them.

Product design and production: In May 2018, Tesco launched an industry-leading ‘preferred materials’ list for packaging in the UK, which categorized materials into red, amber and green according to their recyclability. By working with its suppliers, Tesco will have removed the hardest to recycle ‘red’ materials from its UK Own Brand packaging by the end of 2019. 

Delivery: Tesco continues to reduce emissions associated with the distribution of its products by maximizing the efficiency of its deliveries, using all the space in vehicles where possible and organizing routes to minimize the distances travelled. Tesco has also signed up to the Clean Van Commitment (CVC), making a public commitment to support the switch to low emission vehicles.

Deforestation: As part of its Little Helps Plan, and through its membership of the Consumer Goods Forum (CGF), Tesco is committed to achieving zero net deforestation in the sourcing of soy, palm oil, wood/paper and Brazilian beef for its Own Brand products by 2020.

Soy is grown in several areas across South America and growing demand is putting pressure on these ecosystems. In 2019, Tesco was the first UK retailer to develop and begin to implement a Zero Deforestation Soy Transition Plan. In the future, 100% of South American soy used in Tesco’s UK supply chain will be covered by farm-level zero deforestation certification, and they will also aim to source from regions where all the soy farms in the wider area have been verified as zero deforestation. Tesco has already begun this transition with its UK chicken suppliers and is working to do the same across all other livestock. By 2020, Tesco wants to achieve zero net deforestation in its sourcing of raw materials.

Tesco is also a member of the Palm Oil Transparency Coalition and, this year, will be publishing details of the palm traders it sources from. They have started mapping the palm oil used by its international businesses to build a fuller understanding of its palm oil supply chains globally.

Recycling: Tesco will replace plastic-wrapped multipacks with plastic-free multibuys on tinned food eliminating 350 tons of plastic from the environment from March 2020. The change applies to both Tesco own brand products and branded products, like Heinz Beanz. It contributes to Tesco’s commitment to remove 1bn pieces of plastic from its own brand products by the end of 2020.

Tesco are taking actions:

  • Remove all non-recyclable and hard to recycle materials;
  • Where we can’t remove, reduce it to an absolute minimum;
  • Explore new opportunities to reuse it, and if we can’t, then;
  • Ensure it is all recycled as part of a closed loop.

Next, Tesco is tackling excess packaging. This year, they will assess the size and suitability of packaging as part of ranging decisions. Reviewing the packaging of every single product creates a huge opportunity. For example, using 23% less packaging on just one line of multi-buy crisps removes 5,000 tons of packaging and 50,000 road miles. Similarly, removing croissant packaging means 41,000 fewer plastic packs per week.

1. REMOVE

They first published a preferred material list in 2018 and have since removed all of the hardest to recycle materials from Tesco’s Own Brand packaging. This equates to removing more than 10,000 tons of the hardest to recycle materials from over 1000 products. Everything from ready meal trays, to the small plastic bags used for fruit and veg, to sporks and straws are set to go.

2. REDUCE

In August, Tesco met with 1,500 suppliers to let them know that packaging will form a key part of their decision-making process which determines which products are sold in stores. They have worked with suppliers, making clear that Tesco reserves the right to no longer stock products that use excessive or hard to recycle materials.

An exhaustive piece of work is underway with suppliers to make sure as little packaging as possible is used. 

3. REUSE

This year, Tesco will launch a ground-breaking partnership with Loop, specialists in refillable and reusable packaging. Starting online, 5,000 customers will be able to order products in packaging that can be reused, rather than recycle the packaging.

This builds on the success of other initiatives such as ‘bring your own container’ and ‘reusable cup’ at counters and in their cafes.

4. RECYCLE

Tesco is exploring new technologies to make sure things like film lids and pouches can be recycled. It’s been hugely popular and they have collected 50 tons of plastic for recycling so far.

To close the loop so packaging can be used, re-used, collected and recycled continuously, Tesco found the need for a national collection and recycling infrastructure. They called on the Government to introduce this in January 2018 and offered to help by giving space in parking lots and testing the collection of materials not recycled by local councils.

Certificates

N/A

Sustainable Development Goals

How company covers SDGs

SDG 2 → Facilitate food surplus donation programs in all stores in all regions to provide meals to those in need by 2020.

SDG 3 → To support all of our colleagues to live healthier lives and help our customers make healthier food choices every time they shop with us.

SDG  7 → Source 65% of our electricity from renewable sources by 2020 and 100% by 2030.

SDG  8 → Help our colleagues succeed by providing them with the flexibility, skills and reward to get on’.

SDG 12 Help halve global food waste, farm to fork, by 2030.

SDG 13 Reduce absolute carbon emissions from our operations from 2015 levels: 35% by 2020, 60% by 2025 and 100% by 2050.

SDG 14 Sustainably source all our wild fish.

SDG 15 → Achieve zero net deforestation in our supply chain by 2020.

Progress

In 2018-19 Tesco:  

  • achieved 81% of its target that no food that is safe for human consumption should go to waste in its UK business; 
  • removed 2,914 tons of hard to recycle materials from Own Brand packaging (UK)
  • sourced 58% of its electricity, across the Group, from renewable sources.
  • donated the equivalent of 62.7 million meals to local charities and community groups in the UK, Ireland, Central Europe and Asia; 
  • increased sales of healthy products by 17% year-on-year in its September 2018 ‘helpful little swaps’ event; 
  • begun trials of a ‘reverse vending’ scheme for plastic bottles in the UK and Thailand. 

Targets 

  • become a zero-carbon business by 2050.
  • reduce absolute carbon emissions from operations by 100% from 2015/16 levels: 35% by 2020, 60% by 2025 and 100% by 2050. 
  • source 65% of its electricity from renewable sources by 2020 and 100% by 2030. 

Tesco scraped plastic bags in September with home delivery orders removing 250 million bags per year. Successful trials have already seen Tesco become the first UK retailer to remove all the plastic wrapped around multipacks from its stores. This will see 67 million multipacks of tinned tuna, soup, beans and tomatoes per year sold without plastic wrap every year. 

Tesco has made positive changes to incorporate sustainable policies through their food and services, such as sustainable produce sourcing, material and food recycling, and reducing deforestation within their own food ranges (although they stock other brands, which do not necessarily have the same standards). Tesco has good sustainability targets – such as becoming carbon neutral by 2050 and making sure 100% of its energy is renewable by 2030. Because Tesco does not have as many high-ranking listings in sustainability indices as other companies, we rate them as a B company.

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