tesco and society review 2014

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Tesco and Society

Report 2014


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Chairman’s foreword 3

Chief Executive’s introduction 4

Our scale for good strategy 6

Our conversations 8

Key activities this year 9

Our three big ambitions 10

Reducing food waste 12

Improving health 16Creating opportunities 20

The essentials 24

Trading responsibly 26

Reducing our impacton the environment 28

Being a great employer 30

Supporting local communities 32

Measurement andperformance 34

Making it happen 37

Data assurance 42

Where to find out more 43

Contents

Our three big ambitions

The essentials

Measurement and performance

Making it happen

Tesco is a global retailer operating in 12 markets acrossAsia and Europe. We employ over 500,000 colleagues

and work with suppliers in over 70 countries. In storeand online we enable over 85 million shopping tripseach week.

In May 2013 we set out our new corporateresponsibility strategy. We committed to usingour scale and capabilities as a global, multichannelretailer to create greater value for society.

This report sets out how we have started to tackle

three urgent issues facing society – food waste, healthand youth unemployment. It also shows how we arestrengthening our work in the four essential areas– trading responsibly, reducing our impact on theenvironment, being a great employer and supportinglocal communities – which are fundamental to the waywe do business.

This year has been about examining the issuesin depth in order to develop clear and focused plans

of action.

There’s a lot more content online:

To find out more about our scale for good strategyand activities visit www.tescoplc.com/society

To read our Annual Report visit www.tescoplc.com/ar2014

Introduction

M ak i n gi t h a p p en

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IITesco and Society Report 2014www.tescoplc.com/society

http://www.tescoplc.com/societyhttp://www.tescoplc.com/ar2014http://www.tescoplc.com/ar2014http://www.tescoplc.com/society


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Chairman’s foreword

This is the second Tesco and SocietyReport, marking the first full year of ourprogramme to re-orientate Tesco’s placein society that I wrote about here last year.

This is not a short or quick process withsnap targets and early results. It is are-casting of the business’s relationshipwith the societies in which it operates.

This work does not replace what we callthe essentials, the basic requirements of anybusiness in the modern world to act ethicallyand responsibly in terms of the environment,its employees, its suppliers and generally tobe a responsible citizen. What we are seekingto do now is to recognise that when you arelarge and have a material impact on the livesof many, it behoves you to consider howactively to use that scale for good. This is whywe have set ourselves the goal of making ameaningful difference in the areas of foodwaste, health and youth unemployment.These are not small ambitions and as such

we will need to apply sustained effort overmany years. While each year we will movecloser towards our goals we also need torecognise that it may take up to a decade tosee lasting change. This reflects the scale ofthe task. Success depends in part on realism,as well as thoughtfulness and resources.

So having set ourselves this new direction, thishas been a year of research, capacity building,solution development and of first steps, notone of targets and delivery at scale. It has alsobeen a year of consulting with others.

The broad nature of these issues means that

it is more helpful to update on initiatives andoutcomes in real time rather than having asingle annual big bang. Consequently, thisreport is a progress update which needs tobe read in the light of our half year reportand our regular online updates.

One point on which we are very clear isthat we do not have a monopoly of wisdomin this area. An important step thereforeover the past year has been to assemblean Advisory Panel of leading experts in thespecific fields on which we have chosento focus.

We have also thought long and hard about

how to measure progress in a meaningfulway. The measures we have selected areset out in our ‘Scale for Good Scorecard’.

I am proud of the energy shown by theexecutive team over the last year and theyhave demonstrated a resolve to make along-term difference. The changes wehave started, from publishing our own foodwaste data to launching our food educationcampaign ‘Eat Happy’, may not in themselvessolve the problems we are facing, but they dolay the foundations for significant, strategicand far-reaching change.

By continuing down this path we can makea genuinely positive difference and makewhat matters better for society as a whole.

Finally, after Chairing the CorporateResponsibility Committee for the lasttwo years, my Board colleague JacquelineTammenoms Bakker has agreed to takeover as Chair from the beginning of this year and will bring you this report next year.Jacqueline’s experience and expertise in thisarea make her the ideal successor as we carryforward our plans set out in this report.

Sir Richard Broadbent

“By continuing downthis path we can makea genuinely positivedifference and makewhat matters betterfor society as a whole.”


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Chief Executive’s introduction

“If we are to succeed inthe future, we need tobecome a sustainableretailer in every senseof the word. We needto make what matters

better for society asa whole. Quite simply– better is better.”

The last three years at Tesco have beenall about one thing: making Tesco betterfor everyone in society – our customers,colleagues, shareholders, suppliers andthe communities we serve.

We have been working to build a betterTesco, improving our offer for customersacross the whole shopping trip by

focusing on what matters most.

In the UK, by far our largest business, wehave been strengthening our foundations– investing in the shopping experience andimproving our range, quality and service.We are pleased to say that many of ourcustomers are now seeing the differenceand that over the next three years we willbring the new Tesco to each and everyone of our UK stores. My team is excitedabout the prospect.

We have also been pioneering in the newera of retailing. As the world steps deeper

into the digital age, we will lead theindustry by providing the most compellingmultichannel offer for our customers.

But building a better Tesco is about morethan providing a great shopping trip.

As I wrote in our f irst Tesco and SocietyReport a year ago, the world’s expectationsof business are undergoing a profoundtransformation. More and more people wantto know: are you part of the problem or partof the solution? Do you use your skills andcapabilities in a responsible way? Customerswant to feel good about shopping with us:

they want to build a relationship that goesbeyond the transactional.

In other words, what matters to peopleis changing – so we too are changing.

I have devoted my forty-year working lifeto Tesco and I believe fundamentally thatat the core of our work lies the creationof social value. This is intrinsic to ourlong-term commercial success and tothe creation of shareholder value. Today,

through our stores and other channelstens of millions of people have access tohigh quality, affordable products on adaily basis.

Thanks in no small part to our skill andto our scale, many communities aroundthe world enjoy a selection of fresh fruit,vegetables, meat and fish at prices they canafford for the first time because of Tesco.It’s one of the things I am most proud of.

I am a realist and I recognise that in this newworld biggest isn’t necessarily consideredbest. There are long-term challenges that

have the potential to impact our businessseriously. There are global challengeswhich, because of our core skills andcapabilities, we can help to address.

If we are to succeed in the future, we needto become a sustainable retailer in everysense of the word. We need to make whatmatters better for society as a whole.Quite simply – better is better.

That’s why last year we announced our newvalue: we use our scale for good. It’s basedon the recognition that if we harness thebreadth of our skills, scale and the can-do

spirit of our colleagues, and work togetherwith our partners in the supply chain, wecan make a major contribution to someof the biggest challenges of our time.


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As a signal of this new intent, we choseto take a lead in tackling three challengeswhere we can make a contribution –reducing food waste globally, improvinghealth and providing opportunities formillions of young people.

These three ambitions, together withour essential responsibilities as a good

corporate citizen – in terms of tradingresponsibly, reducing our impact on theenvironment, being a great employer andsupporting local communities – make usa better business, one which can lead inthe new era of retail.

During the last twelve months more of ourcolleagues have got behind our ambitionand our new value has already proved apowerful motivating force. It’s the firstphase of a journey and we have still onlyachieved a fraction of the change weultimately want to see.

One of the biggest improvements wehave made over the last year is in the scaleof our engagement. We were determinedto seek out the best advice and supportfor all of our ambitions, which meant joining the global conversation aroundeach of these issues.

We have held meetings with campaignersand experts. We have held roundtablediscussions on a range of subjects includinghealth, young people, food waste and foodsourcing. Representatives from across thebusiness have participated in key conferences.I was pleased to speak at the Global Green

Growth Forum in Copenhagen. By sharingthese platforms, we have helped to raiseawareness of these challenges and boosted,in particular, the profile of food waste as asocial and environmental concern.

We have also worked hard to move to amore open, transparent conversation. Weare starting to share details of our activities,progress and challenges on our differentchannels throughout the year.

But the most important change wehave made has been in the way we haveapproached our ambitions. In each case,

we want to make significant, lastingchanges – not launch short-termsuperficial initiatives.

That’s why the focus of this year has beengathering the best possible insights to setlong-term direction, whether it’s researchon the specific challenges facing youngpeople, our ‘Healthy Little DifferencesTracker’ to measure the nutritional profileof shopping trips, or producing detailedfood waste profiles for our most popularproducts – together with action plans toreduce waste at each part of the value chain.

This insight-to-action approach holdsthe key to our success for the future. It’sthe theme of this year’s Tesco and SocietyReport. As we continue down this pathover the coming years, we can use ourscale for good across society and makewhat matters better, together.

Philip Clarke

“The focus of this year hasbeen gathering the bestpossible insights toset long-term direction.”


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We introduced our third value – we use our scale for

good – in recognition of the fact that we can make

a wider contribution to society by drawing on our

operational skills and our scale. This new value stands

alongside two other corporate values: no one tries

harder for customers and we treat everyone how

we like to be treated.

Taken together, our values set out thekind of business we want to be and helpus to deliver our core purpose – we makewhat matters better, together.

Significantly, our values do not sit inisolation from our business strategy.They reinforce and underpin it.

The world is changing. Many of the mostpressing social and environmental issuescan only be solved if businesses workalongside communities, governments,experts and charitable organisations totackle them.

We want to be a leader in tackling thesechallenges because they are relevantand because there is value in doing so.In the new era of retail, we believe thatcustomers will increasingly rewardcompanies that they trust and thatmake a wider contribution to society.

That is why over the past year we set outon a journey to help tackle three long-term challenges which are relevant to usas a global retailer and which matter tosociety. These challenges are representedin our three big ambitions:

• Leading in the global fight againstfood waste

• Helping customers and colleagueslive healthier lives

• Creating opportunities for millionsof young people

These issues also matter to the future

of Tesco. For example:

• Reducing food waste helps to addressthe long-term concern about foodsecurity as well as helping to makeus more efficient

Over

500,000colleagues around the world

Over

85 millionshopping trips a week

Suppliers in over

70countries

Rebecca ShelleyGroup Corporate Affairs Director

• Health and obesity are issues thatour customers really care about andare driving demand for healthy products

• Attracting and retaining people withthe right skills is important for developinga pipeline of future talent – youngpeople are our customers andcolleagues of the future

At the same time, we have continuedto strengthen the work we do around ouressential commitments – those areas ofresponsibility which are fundamental tothe way we do business every day: tradingresponsibly; reducing our impact on theenvironment; being a great employer andsupporting local communities.

We started by mapping the problems anddeveloping strategies which will enableus to make the biggest difference for thefuture. Insight-to-action has been thebasis for all our work this year.

We have also taken action in key areas.For example, we have calculated andshared food waste data in our ownoperations and across the value chain.We have launched The Tesco Eat HappyProject to help improve the nextgeneration’s relationship with food andwe have carried out new research on thechallenges young people are facing.

In many cases, using our scale for goodmeans being more collaborative, includinghelping to connect and coordinate differentpartners in different countries and acrossa global supply chain. As this report shows,

we have already been able to buildpartnerships and collaborate across a rangeof areas this year. Our aim for next year willbe to move from insight-to-action towardsan approach which uses action to achievelong-term impact.


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Our scale for good strategy


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Using our scale for good

Our role in society is an extension of our core purpose:we make what matters better, together.

Our values are: no one tries harder for customers; we treateveryone how we like to be treated; and we use our scalefor good.

Our three big ambitions and our four essentials showhow we will use our scale for good.


To create new

opportunities

for millions of

young people

around the worldCreating opportunitiespage 20

To improve health

and through this

help to tackle the

global obesity crisis

Improving healthpage 16

To lead in reducing

food waste globally

Reducing food wastepage 12

The essentials

We traderesponsibly

by putting ourcustomers first andbuilding strongpartnerships toprovide highquality products

Trading responsiblypage 26

We are reducingour impact on the

environment byaiming to be azero-carbon businessby 2050 and usingscarce resourcesresponsibly, includingin our supply chain

Reducing our impacton the environmentpage 28

We are a greatemployer

– creatingopportunitiesthat make ourcolleagues happyand proud ofwhat they do

Being a great employerpage 30

We supportour local

communitiesby being a goodneighbour andrunning ourbusiness to thehighest standards

Supporting local communitiespage 32


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We’ve learned a great deal by listening tocustomers, experts, campaigners, investors andsuppliers. We’ve also joined the debate and taken

to public platforms to share our point of view.

We have hosted a series of roundtables on food waste, supplychains and health. We have established Young People’s Panelsin Europe and the UK and we have brought together an advisorypanel of international experts to work directly with our ChiefExecutive to advise on our scale for good strategy. We’ve alsoset up an independent supply chain advisory panel.

Through our conversations with investors we know that theyrecognise the importance of our strategy for our long-termcommercial success. In addition, we listen to and work with oursuppliers across the countries we source from and we engage

with our customers in a variety of ways, in order to understandwhat matters and how we can help.

We’ve spoken at a number of conferences across the world.These include: The National Farmers Union Annual Conference;the third Green Growth Forum; WWF’s Livewell for Life andWRAP’s Annual Conference.

We’re helping to raise the profile of these issues so thatwe can work together with others to find solutions.More information on page 38

Rebecca Shelley, our Corporate AffairsDirector, speaking with the UK Secretary

of State for Environment, Food and RuralAffairs, Owen Paterson MP at “A BetterRetailing Climate” event hosted by the

British Retail Consortium.

“The biggest challenge when starting my career wasto actually start it…which places to go to, who to speak

to and what equipment I needed.”

“Businesses have a big role – they should be able to takeus on, help us and develop us so we can enter that

environment as professional as we can be.”

What young people told us during a research

programme with youth engagement agency Livity.

Speaking at The National Farmers Union Annual Conference,our Group Commercial Director Kevin Grace said:

“We are all united in the food chain and only when we findcommon interest will we be able to use the strength of the

whole chain to serve the clearest and most important commoninterest of all: giving customers what they want; engaging themto buy more of farming’s production and increasing production

capacity to meet the demand for quality, affordable food.”


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Our conversations


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APPLES

BANANAS

BAKERY

GRAPES

27%

19%

34%

20%

Food waste dataThis year, for the first time, we havepublished externally assured food wastedata for our own UK operations. We’vealso identified where food waste arisesacross the value chain for 25 of our most

commonly purchased products. Theseproducts represent over 20% of ourfresh UK food sales.More information on page 14

Food donationsThis year a total of 8.5 million meals’ worth offood was donated to people in need throughour food collections across Europe. Polandand the UK have led the way on donatingsurplus food from our stores and distributioncentres respectively. We will be rolling out afood surplus blueprint across our markets. More information on pages 15 and 33

We’ve provided opportunities for over 150,000 youngpeople in our operating markets through a range ofactivities including schools outreach and skillsdevelopment. To help us do more, we’ve created YoungPeople’s Panels in Europe and the UK and carried outresearch to understand the support that young people

need. More information on page 20

Opportunitiesfor young people

Our team of experts in the countries we source fromwork with our suppliers to ensure the best productsare available for our customers whenever they wantthem. Our online networks connect suppliers so thatthey can share best practice. Our Producer Network

now has over 2,000 members with representativesfrom 47 countries. More information on page 27

Supply chain experts

Health checksThrough our partnership with Diabetes UKwe’ve helped carry out 70,000 Type 2 diabetesrisk assessments online and in Tescopharmacies. More information on page 19

The Tesco Eat

Happy ProjectThe Tesco Eat Happy Project is ourlong-term commitment to help childrenand young people grow up with a happierand healthier relationship with food.In the UK our first initiative is Farm toFork where we will take one million UKprimary school pupils on Farm to ForkTrails. In Hungary we have launchedour pilot TeenChef healthy cookingcompetition. We are rolling out EatHappy across our operating markets. More information on page 19

Building on our experience and expertise,and the insights and advice we gained fromexperts, we have enhanced our understanding

of the issues we are tackling.

We have started to take action and makea difference. This page sets out someof our priority areas.

Scale for Good Scorecardpage 34

We’ve also set out focused plansand established a benchmark ofour performance in our Scale for

Good Scorecard.


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Key activities this year


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Our three big ambitions are:

• To lead in reducing foodwaste globally

• To improve health andthrough this help to tacklethe global obesity crisis

• To create new opportunitiesfor millions of young peoplearound the world

All three ambitions reflect

real and pressing concerns insociety. They are also issueswhich are relevant to us asa large global retailer andto which we can apply ourskills and our scale to makea positive difference.

Our goal in each case is to deliversignificant, long-term change.


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We are facing an overwhelming body ofevidence which points to the long-termhealth and social costs of an unhealthyrelationship with food. As a globalretailer we can provide customers withthe information and choices they needand help them to live healthier lives.

The key to improving health is discoveringwhat is driving health choices and habitsin all our markets.

Our ‘Healthy Little Differences Tracker’is central to our approach. This tracker,which measures the nutritional content ofour customers’ shopping baskets, will helpus to understand what is driving healthyand unhealthy shopping trends – andto design solutions to encourage peopleto buy more healthily.

We have already removed three billioncalories from our soft drinks and throughThe Tesco Eat Happy Project we are makingour contribution to help improve the next

generation’s relationship with food.

73 million young people are unemployedglobally and 120 million potential newyoung workers enter the global labourmarket each year. Against this backdropyoung people are facing great challengesin getting started in their careers andface growing concerns about future skills.

We want to help take on this challenge andour ambition is to create opportunities formillions of young people around the world.

To achieve this, we need to focus on thespecific challenges young people are facing.That is why we have been listening to youngpeople through research, focus groups andby establishing Young People’s Panels. Inaddition, we have introduced a range ofprogrammes. For example, in Thailand wehave launched a new vocational trainingprogramme to give students on-the-jobtraining. We want to make a lasting impactand help break the cycle – no job, noexperience, no experience, no job.

It is unacceptable that around a third of

the world’s food is being wasted eachyear. As one of the world’s largest foodretailers, we want to make a positivedifference, using our scale and reach.

We do not just want to reduce food wastein our own operations. We have a sharedresponsibility to reduce food waste acrossthe value chain wherever it occurs – infields, farms, distribution networks andin our homes.

To do that effectively, we need the best

possible insights into precisely where foodis wasted and why.

That is why we have published new data,including externally assured statisticson waste within our own operations. Bysharing this information we have addedimportant evidence to the debate on howto tackle food waste. We are now takingaction to tackle hotspots across the valuechain and are donating surplus food tothose in need.


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Improving health

Creating opportunities

Reducing food waste


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Reducing food waste

Expert perspective

Since WRAP published itsground-breaking food wasteresearch and launched LoveFood Hate Waste, the UK hascut avoidable food waste bynearly a quarter.

Public awareness of food waste isat an all-time high, thanks largelyto our effective partnerships withlocal authorities, communitygroups and retailers like Tesco.The work Tesco has done to putreducing food waste at the heartof its strategy is helping us andthe wider industry to make adifference. A major combinedeffort from retailers, brands,governments and consumerscould, I believe, not only halve UK

household food waste by 2025but also provide a good practicemodel to help other countries toprevent unnecessary food waste.

Dr Liz GoodwinCEO, WRAP


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In recent years, the world has grown increasingly

concerned about the volume of food which is wasted.

As research by the UN has shown, enormous amounts

of food are being lost and wasted globally – at least

1.3 billion tonnes each year.

“Reducing food wasteis a systemic challengeand we cannot tackleit on our own. That is whywe have engaged leadingnational andinternational bodies.”

Aside from the unnecessary pressurethis puts on land and natural resources,together with the associated emissionof greenhouse gases, this waste costsour customers vast sums of money. Forexample, according to the UK’s WasteResource Action Programme (WR AP),the average British family with childrenthrows away £700 worth of food per year.

For these reasons we committed to takea lead in reducing food waste globally.

We have a shared responsibility for foodwaste across the value chain – from farm tofork – and we have made clear that we wantto do more than reduce waste within ourown stores and distribution centres. The keyto delivering real reductions is to identifywhere most waste occurs and designtailored solutions to tackling these hotspots.

That is why, using our unique viewpoint inthe food value chain, we have been working

to develop new insights into food waste,including waste profiles for 25 of our mostfrequently purchased food products. Wehave also been sharing data on food wastewithin our UK operations.

Reducing food waste is a systemicchallenge and we cannot tackle it onour own. That is why we have engagedleading national and international bodiesby sharing our insight and ideas and bycollaborating on programmes, for examplethe World Resource Institute’s Food Lossand Waste Protocol. Our Chief Executive,Philip Clarke, announced that we would

participate in the development of thisprotocol at the Global Green GrowthSummit in Copenhagen.

We have engaged closely with the UnitedNations Environment Programme, we areworking alongside the campaign Think.Eat.Save and we have recently signed up to theEuropean Fusions project. We also engagewith campaigners, including TristramStuart, who are working hard to keep foodwaste on the public agenda and challengestakeholders to do more.

Drawing on this expertise and our owninsights, we have developed targetedapproaches to tackling food waste. Theseinitiatives are tailored to the food wastechallenges identified for each of ouroperating markets.

We know that this is going to be a long journey. The key to success will be aboutbuilding strong partnerships with oursuppliers and finding engaging ways ofhelping our customers to reduce wasteand save money in a way which deliversmore sustainable consumption.

Matt Simister

Commercial Director– Group Food

1.3 billionAround 1.3 billion tonnes of food arelost or wasted each year globally

£700UK families are throwing away theequivalent of around £700 worthof food per year

Source: WRAP

56,580∆

tonnes of food were wasted within ourUK operations in 2013/14

∆ Within the scope of KPMG LLP’s limitedassurance opinion – see page 42 formore details.


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Reducing food waste


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KPMG have independently assured our food

waste data. This shows that during 2013/14,56,580∆ tonnes of food were wasted in Tescostores and distribution centres in the UK.

This represents less than 1%† of the numberof food products sold in our stores over thisperiod. We have worked hard to reducewaste to this level – reducing waste makescommercial sense. The challenge now is toinnovate to reduce this figure further and sharebest practice across all our operating markets.

We are rolling out a blueprint of best

practice worldwide. This providesclear guidance on handling produce,store ordering and other wastereduction procedures.

In specific areas where the waste figuresare high we have targeted action plans. Forexample we have re-designed our in-storebakeries so that less bread is displayed atany one time and is replenished morefrequently when demand is high.

Targeting food waste hotspots

We have developed food waste profiles for 25 of our mostfrequently purchased food products. These profiles highlightthe percentage of total food production wasted at every stageof the value chain.

To reduce losses in the field and processing we are:

• Reviewing waste alongside customer preferences when selecting differentpotato varieties

• Using satellite and aerial mapping technology to identify specif ic trends in field losses• Introducing new technology to remove stones earlier in processing to reduce damage

To help customers reduce food waste in the home we are reviewing opportunitiesfor modified atmosphere packaging which could help the potatoes to last longer.

Potatoes

To help reduce the amount of cheese our customers waste at home we have:

• Introduced re-sealable packaging on all British cheddars• Standardised the on-pack shelf life information so that customers know, for example,

that all soft and blue cheeses should be used within three days of opening• Added recipes on our Real Food website to provide ways for customers to use up

any leftover cheese

Cheese

Lamb

To reduce waste in processing we are trialling innovative ways of storingand transporting lamb to improve product quality and freshness.

To increase shelf life for customers we are rolling out specialised packaging.This technology has been successfully introduced for beef, giving customersup to an extra five days to consume the product, and we hope it will havea similar impact for lamb.

Analysing our own operations

The first step to long-term

change is greater transparency.That is why we are publishingfor the first time data onfood waste within our ownUK operations for a fullfinancial year.

Below is a selection of these profiles and a summaryof how we are tackling the food waste hotspots.Visit www.tescoplc.com/society/foodwaste to seeall 25 hotspots.*

FieldLosses

RetailWaste

ConsumerWaste

ProcessingLosses

9% 6% 1% 39%

FieldLosses

RetailWaste

ConsumerWaste

ProcessingLosses

1%


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20%of total productionwasted

By establishing wasteprofiles for grapes this year,we know that 20% of grapeproduction is wasted atvarious points in the valuechain. Of that waste, arounda third is lost in fields andalmost two thirds is wastedin customers’ homes.

In order to help reduce this waste we areshortening the supply chain. This reducesthe scope for grapes to be left to rot in fieldsor to go to waste in customers’ homes.

Grapes

We have been working to significantlyimprove the variety, quality and value ofthe fresh fruit and vegetables we offerour customers.

A key aspect of this is to make it mucheasier for customers to reduce food wastein their own homes, which accordingto WRAP data is as high as 15% offood produced.

The Produce Revolution

To make a positive differencefor the long term, we have tomake it easier for customersto reduce food waste.

As part of the programme we are:

• Re-designing produce packaging toinclude facts around food waste on keypacks, as well as tips about reducingwaste. These will be aligned with WRAP’sLove Food, Hate Waste Campaign

• Introducing new in-store greengrocersto assist customers and training for allcolleagues working in produce on thecorrect storage advice for fruit andvegetables in the home and tips aboutleftover usage

There are two parts to our work:

1. We have guaranteed in advance that wewill buy at least 80% of grapes from oursuppliers. This means that suppliers arebetter able to forecast demand and areless likely to end up with unsold grapes.

2. As a result of this change, we have beenable to cut out a stage in our distributionchain and reduce the time grapes taketo arrive in the UK. This means that thecode life on the product is increased, and

in some cases we are giving customersan extra 10 days of freshness.

We are significantly increasing the volume ofproducts moving through our supply chainin this way, from five million cases two yearsago to 14 million cases this year. In additionto grapes this includes products such asapples, pears, tomatoes and mushrooms.

Watch the video herewww.tescoplc.com/society/grapesvideo

FieldLosses

RetailWaste

ConsumerWaste

ProcessingLosses

6% 1% 1% 13%

Extending our food surplus workThe nature of our business means thatthere is some surplus food that we havestocked but have not been able to sell.In the UK, we use the following hierarchyto manage surplus food and prevent itfrom going to landfill.

1. We try to minimise surplus – forexample by reducing to clear foodsclose to their expiry date

2. If food cannot be sold, we offer itwhere possible to those in need bydonating to charities

3. We send all bakery waste to beconverted into animal feed forlivestock and our chicken fat andcooking oil is converted into biodiesel

4. If these options are not available,we recover energy from foodwaste through anaerobic digestionor incineration

We have made significant progress on

managing our surplus food. Our team inPoland have been donating surplus foodfrom 31 stores to those in need. Theydonated 80 tonnes in the first 100 days.

In the UK we are donating surplusfood from our grocery home shoppingstores and from our fresh fooddistribution centres. In Ireland we havebeen trialling donating surplus foodfrom our stores to local food surpluscharities using a dedicated mobilephone app. In South Korea we haveso far donated over 430,000 bags ofbakery (equivalent to 151 tonnes) tothose in need in the local community.

Putting surplus food to good use isa key focus for our teams across ouroperating markets in the coming year.

What’s next

In focus


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Improving health

Expert perspective

To tackle the growing globalthreat of non-communicablediseases over the long term,we need to ensure that wecreate the environment forchildren to make good healthchoices and ensure that wecan properly support childrenwho become overweight.

This requires focused public-private partnerships atcommunity and national level,as well as collaborative actionto share programmes andresearch findings internationally.

Businesses have a key roleto play and I am interested tosee how The Tesco Eat Happy

Project can help childrenmake better food choices.

Professor Paul GatelyProfessor of Exercise and Obesity, LeedsMetropolitan University


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As one of the world’s largest foodproviders we can play a major role inaddressing this problem. We can providecustomers and wider society with theinformation and choices they need tomake it easier to live healthier lives.

Health is an increasingly emotional issuefor our customers – two thirds worry about

their own health or that of their family.Food dominates customers’ thoughtsand feelings around how healthy theirlifestyles are.

That’s why the cornerstone of our planis how we use our data. This includesthe development of our ‘Healthy LittleDifferences Tracker’ to measure thenutritional profile of the food ourcustomers buy. In time our customerswill be able to use their own data tounderstand the nutritional profile oftheir shopping, helping them to improveit year after year. We are piloting these

tools now and are convinced that theycan make a unique difference to howwe support healthy lifestyles, first inthe UK and then in every country inwhich we operate.

We have also launched The Tesco Eat HappyProject – our long-term commitment toimprove the next generation’s relationshipwith food. The first phase is our Farm toFork Trails to help children understandwhere their food comes from. Tens ofthousands of children have already takenpart in a Farm to Fork Trail.

“We can providecustomers andwider society withthe information andchoices they need tomake it easier to livehealthier lives.”


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E n g a g i n

g s o c i e

t yH e l p i n

g c u s t o m

e r s

Improving ouroperations

Our ambition is to help improve healthfor our customers, colleagues and widersociety. We want the nutritional profileof shopping trips around the world toget healthier, year after year.

Our approach

Achieving our ambition: where we can make a difference

• Introducing healthier products suchas our new Healthy Living brand inthe UK and VitaKids in Slovakia

• Giving a balanced choice of productsin store and online

• Reformulating our products to improvetheir health profile – we have made most

progress in our soft drinks category• Strengthening our health and

wellbeing programmes for colleagues

We are taking an insight and data-led approach so that wemake effective, sustainable use of all levers at our disposal –in stores, online, as well as awareness and educationprogrammes in wider society.

By doing this we can act directly in our stores and ownoperations, encourage healthier choices with our customersand galvanise change across society.

• Through The Tesco Eat Happy Projectand our Farm to Fork initiative we canhelp the next generation to have ahealthier and happier relationshipwith food

• Our well established Get ActiveCampaigns such as aerobics in

Thailand, Run for Life in Slovakiaand Race for Life in the UK providemuch needed opportunities for ourcommunities to get moving andhave fun at the same time

• Using our product and customer data toprovide personalised recommendations

• Raising awareness of diabetes riskfactors and carrying out riskassessments in store and online

• Providing broader health andwellbeing support through

www.tescohealthandwellbeing.com and by extending our ‘HealthyAppetites’ programme in Poland


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Improving health

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The average

Tesco customer in

the UK is buying

20% less sugar

in soft drinks

than in 2011

What’s next

Our Healthy LittleDifferences TrackerOur key focus in the coming year is toestablish our Healthy Little DifferencesTracker across all our markets. We

recognise the challenge involved incombining nutritional data for over100,000 products with our salesand customer data.

We will also continue to look foropportunities to use our data for socialgood by sharing our customer insight(on a purely opt-in basis) to help informnew medical research.

There is a serious gap in children’sunderstanding of food and what is healthy,with 10% of 7-14 year olds thinking thattomato ketchup counts as one of theirfive-a-day. We know that eating habits areformed early so food education is critical

to changing behaviours.

The Tesco Eat Happy Project

Through reformulation, new productdevelopment and promotional and layoutchanges we can make it easier for ourcustomers to make healthier choices.

“ We have already removed three billioncalories from our soft drinks and identifiedten key areas where we can go further,working with the soft drinks industryto ensure our customers have a rangeof choices available.”

David BeardmoreCategory Buying Manager, Soft Drinks

Healthier product choices

70,000Diabetes health checksin store and online

Partnering with Diabetes UK

Our National Charity Partner in the UK isDiabetes UK. This year we helped to runthe biggest Type 2 diabetes awareness

campaign in UK history, reaching millionsof people with posters and adverts. Wehave already helped to run over 70,000Type 2 diabetes risk assessments in Tescopharmacies and online and we have

In focus

Source: Dunnhumby Clubcard data, 7 weeks ending24 February 2013 vs same period 2011.

We have made most progress in our softdrinks category and have committed to gofurther. Here are a few examples of how:

1. We will reduce sugar by 25% on theremaining Tesco Brand carbonates

2. 60% of all new product developmentwill focus on low or no calorie products

3. We will use new technology to removebetween 20% and 30% of sugarwithout using artif icial sweeteners

We plan to extend this reformulationwork into other product areas and will betargeting added sugar during 2014/15.

Our product reformulation is guided by ourhealthy little differences tracker analysis.For more information on our tracker andhow we use it visitwww.tescoplc.com/society/health

To help address this need, we developedthe Tesco Eat Happy Project. The firstinitiative is our Farm to Fork Trails. We havetrained over 700 colleagues and selectedsuppliers to run trails for school children.We want to take one million primary school

pupils on trails across the UK. And throughFarm to Fork Online Field Trips, children willbe transported to far off places to f ind outhow their food is grown. In addition, weare helping kids learn to cook by holdingcooking lessons with the Children’s FoodTrust in some stores over the summer.

Educating children about healthy eatingand cooking has also been the flagshipprogramme of Tesco Hungary through ourTeenChef initiative. Over one hundred 8-14 year olds took part in the pilot competition bycooking their favourite healthy meals and

sharing the videos or photos online.

Through our Eat Happy Project we havemade a long-term commitment to improvethe next generation’s relationship withfood across our operating markets.www.eathappyproject.com

distributed information about diabetesto over a million customers.

For more information about our nationalcharity partnership see page 32.

We need to establish processes to ensurethe data collection is sustainable.

We will use the insight from the tracker toinform our work on reformulation and to

identify other ways we can help customersto make healthier choices for themselvesand their families – for example bybuilding tools that offer personalisedrecommendations and advice.


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Young person’s perspective

The progress of our societiesis based, among otherelements, on our capacityto involve young men andwomen in building anddesigning the future.

Young people have aspirationsfor the future. They are eagerto participate in the lives of theirsocieties and are key agents fortechnological innovation.

Yet they also face an uncertainfuture. Tackling high levelsof youth unemployment is acritical challenge for society.The Young People’s Panel is agreat indication that Tesco isaware of the power that young

people bring to business andwants to listen to us.

Merve Atalay (24 years old)Non-Food Group Manager, Tesco KipaMember of Tesco’s European YoungPeople’s Panel


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www.tescoplc.com/society 20Tesco and Society Report 2014


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Our approach is based on three core ideas.

First, with over half a million colleaguesacross the Group in a wide variety of roles,we are in the business of forging newpaths and providing new opportunities.It is that expertise which we want to bringto this issue.

Second, while we employ over one hundredthousand young people, we want to domore than simply create new opportunitieswithin our own operations. We want tohelp equip young people with the keyemployability skills that will help them inwhatever career they decide to pursue.

Finally, just as we are doing with Healthand Food Waste, our goal is to achievea sustainable impact – and to do that weneed the best possible insights to guideaction. We need to listen to what reallymatters to young people and understandthe barriers they face and how we can help.

That is why we have carried out extensiveresearch on the problems facing youngpeople, including:

• Research in partnership with youthengagement agency Livity on thechallenges young people in the UKare facing

• Focus groups with young peopleand parents across Europe

Judith NelsonUK Personnel Director

73 millionyoung people are unemployed globally

64%of young people in the UK believebusinesses do not do enough tohelp them

We employ over

100,000young people

Creating opportunities for young people remains a

critical challenge. Youth unemployment is at crisis

levels across Europe. Developing future skills is a

global concern. That’s why we are determined to

be part of the solution and to create opportunities

for millions of young people around the world.

• We have also established Young People’sPanels in Europe and the UK. Thesepanels are made up of young colleaguesfrom across our business, who bring adiverse range of perspectives and newideas on how we can support youngpeople. They will advise us on how toprioritise key activities and ensure ourplans make a real difference to

young people

While the findings from this researchare extensive it is clear that young peopleneed help to build the right skills for theworld of work and find it difficult to get a job without experience. Our goal is to helpbreak the cycle – no job, no experience,no experience, no job.

We have already introduced a range ofnew programmes to address some of thechallenges and opportunities identified byour research. For example, in Thailand wehave launched a new vocational training

programme to give students access toon-the-job learning during their studies,in Turkey we are using our Family Clubsto offer young people free skills trainingand in the Czech Republic we are providing young people with project managementskills as part of our ExtraClass initiative.Together, programmes like these arehelping us to make a significant differenceto young people’s lives.


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FUTURE

H e r e t o

h e l p

C u s t o m

e r

A s s i s t a

n t

Creating opportunities sits at the core of ourbusiness. But achieving our ambition meansdoing more than simply enabling moreyoung people to enter the retail industry.

We want to help inspire, equip and enableyoung people across society to startsuccessful careers.

Our approach

Hosted open

days for almost

Job applicationworkshops for almost

750

Preparing for work

Careers advice for over

7,000

500

70,000 joined our team

400places on graduate

or school leaverschemes

6,000Almost

apprenticeships

At Tesco

14,00060,000

Provided skills

training for almost

educationalscholarships

Shown beloware some keyactivities that

have contributedto this total

In totalwe have created

158,000opportunities foryoung people in2013/14 across

the Group

Hardto

reach


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Earlier this year, wecommissioned the youthengagement agency Livityto survey over a thousand young people across theUK and ask them about thechallenges they are facingwhen trying to get startedon a rewarding and

inspiring career.

Understanding the challenges young people face

What’s next

The Tesco Youth AcademyThis year we will be launching a globalacademy through which we will shareour expertise in training and development

to support young people to develop keyskills for life and work. Based on the trainingin core skills and leadership behaviours thatwe offer to Tesco colleagues, the Academywill cover themes such as how to be at your

school outreach programmes that willbring these skills to life in the classroom.

In the future we hope that through the

Tesco Youth Academy we will be able tooffer more information to young peopleabout different careers in which theseskills are valuable, and how they canuse them when searching for a job.

We already provide a range of opportunitiesto support young people, from our graduateand school leaver programmes to advice on

CV writing and interview skills. But with youthunemployment rates in many of the countrieswhere we operate at crisis levels, we knowthat there is a significant group of youngpeople who need our support urgently: thosewho are not in education, employment ortraining. We cannot solve this problem aloneand so have been working in partnership withothers to launch a range of initiatives to helpthese young people.

In Ireland, we have launched thePositive2Work programme in partnershipwith the Irish Government. This six-weekemployability programme, leading to a

nationally recognised qualification, givesunemployed young people the skills andexperience they need to get started in theretail industry. So far, 64 young peoplehave benefited from this programme,

Supporting those who are most in need

In focus

Irish Government Minister for Social Protection

Joan Burton at the Tesco-Positive2Work

graduation ceremony with some of the students.

The insights from this research have provedan important guide to our strategy. Theyhave highlighted that while young peopleare ambitious and determined, they arelooking for support from employers,educators and government to give themthe best chance of fulfilling their aspirations.

The research found that:

• 50% of young people are worried aboutthe lack of opportunities available

• Young people lack role models: 31%

have never met a person who hasa job they would like to do

• Young people are looking for bettercareers advice at an early age. Most turnto parents or careers advisors for help,but feel the jobs market has changed somuch their advice is no longer relevant

• 64% say that businesses do not doenough to help them get the beststart to their careers

Despite these findings, 65% of youngpeople remain optimistic about theirfutures. In addition, 76% say they wantto work for profit-making businesses thatgive back to society.

Alongside this research, we held a seriesof focus groups, both in the UK andCentral Europe, to hear in more detail

about the support young people needfrom businesses. One point which wasparticularly clear was the need to buildstronger and closer links between schoolsand employers to help prepare youngpeople for the world of work. This is akey priority for us over the coming year.

with over 50% of students gaining full-timeemployment on completion. The 2014programme will enable 100 young people

to benefit from classroom training and workexperience in our stores across Ireland.

In the UK we are founding members in anew coalition of UK businesses which havemade a commitment to create opportunitiesfor thousands of unemployed young peoplethrough the Movement to Work initiative.Working with The Prince’s Trust we will beoffering a structured vocational trainingscheme to help prepare young people not ineducation, employment or training. We willbe offering 500 places on this scheme overthe next two years.

Our focus will be on areas of highdeprivation or unemployment and willreinforce the work we have been doing tohelp long-term unemployed people throughour Regeneration Partnership stores.

best, how to work well in a team and howto use creative thinking.

It will make learning materials available

to teachers that are adapted to theneeds of each country’s educationsystem, and enable young people toaccess this information online. We willalso be mobilising our colleagues through


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When we set out our vision to use ourscale for good, we made clear that it mustapply across the business. As one of theworld’s largest retailers, it is essential that

we create a positive impact wherever weoperate and whatever we do.

To help define the wider role we canplay in society, we set out our essentialcommitments. Delivering in these areasis a fundamental part of how businessmust operate and of our role in society.They cover:

• Trading responsibly: instilling trustin every customer transaction andbuilding strong supplier partnerships

• Reducing our impact on theenvironment: continuing to lead

on fighting climate change andsustainability issues

• Being a great employer: creatingopportunities that make ourcolleagues happy and proud ofwhat they do

• Supporting local communities: being a good neighbour and actingon the issues and causes that matter

Each one of these areas is critical to ourbusiness and to society.

• Given the growing concerns about foodsecurity, it is vital that we work closely

with our suppliers to build long-termrelationships so that we can provideaffordable products that our customerstrust. We can only do this by workingin partnership to address issues suchas sustainability and labour standards.

“To help define thewider role we canplay in society, we

set out our essentialcommitments.Delivering in theseareas is a fundamentalpart of how businessmust operate and ofour role in society.”

Josh HardieGroup Corporate ResponsibilityDirector

• We have been clear for many yearsthat climate change is the biggestenvironmental threat the world faces.We are helping to fight it by becoming

a zero-carbon business and actingacross the supply chain. Unless we takebold steps our business will not be ableto operate successfully in the future.

• Social mobility and inequality are majorconcerns in many countries. We want tohelp create opportunities within ourbusiness and give everyone the chanceto get on and get ahead. This will helpus to attract and retain the best people,to make them proud advocates of ourbusiness and to improve customer service.

• As a business which has a presence in

thousands of local communities, we relyon thriving neighbourhoods and wewant to support all parts of societyto prosper and succeed. We willonly succeed by being part of thesecommunities, not separate from them.

Our aim is to have a positive impact ineach one of these essential areas byworking in collaboration with customers,colleagues and wider society. Just as withour three big ambitions, we are committedto being transparent about our progressand we have developed a scorecard tomeasure how we are performing against

our key commitments.

The essentials


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Trust is integral to our success: ourcustomers want to buy high quality safeproducts that are sourced responsibly;they want to know that we have fair,accurate and honest pricing policies; andit’s vitally important that customers trustus to handle their information sensitively.

Meanwhile, as we work in a climate ofgrowing food insecurity, we need strong,lasting and trusted relationships with allour suppliers. Our success as a business –and as a society – depends on whether wecan work together to source high qualitygoods affordably.

Trading responsibly

Without concerted action, climatechange will have a critical impact onthe way we all live – adversely affectingecosystems, increasing water scarcityand creating a growing number ofextreme weather events.

We have continued to lead the waywith our climate change strategy. We areprogressing towards our ambition of beinga zero-carbon business by 2050. We haveconsistently improved our energy eff iciencyand reduced our relative carbon emissions.We are also working to improve resourceefficiency and address sustainability risksacross our supply chain.

Reducing our impact on the environment

At Tesco, we want to be both a great placeto work and an employer that providesopportunities for colleagues to get on andget ahead. We pride ourselves that 77%of our managers, directors and businessleaders have worked their way up withinthe company and are encouraged that inour UK business there is no significantpay gap between men and women.

We want to keep moving our cultureforward to help deliver our businessstrategy. Our aim is to create a culturewhich is happy, healthy, high performingand committed to our customers, productsand services. To help achieve this we haveinvested in training and re-launched ourcolleague engagement survey to ensurethat we fully listen to and understand whatmatters to colleagues.

Being a great employer

It is essential that every community weoperate in can thrive and be successful.We know that our business can only bevibrant if those communities are vibrant– and we work hard to support localcommunities in a variety of ways.

Significantly, what matters about ourapproach is that alongside the supportwe provide to local and national charities,we also use our skills and scale in order tohelp tackle local problems and addressurgent challenges.

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Our trading responsibly report can be read online

at www.tescoplc.com/society/tradingresponsibly

We are building strongpartnerships with trustedsuppliers so that we candeliver high quality,

safe products that areresponsibly producedfor our customers atan affordable price.

A community of trading partnersWe operate in a competitive, dynamicindustry which is changing at a fasterpace than ever before. Building strongpartnerships with suppliers and managingour supply chains effectively are crucial if

we are to recognise and respond tothese changes.

In February we published a report whichoutlined the changes that we have beenmaking to our trading relationships in theUK and internationally, such as simplifyingour meat supply chains, establishingdirect relationships with banana growersand collaborating to improve conditionsacross the garment industry. This reportcan be read online at www.tescoplc.com/society/tradingresponsibly.

As the report sets out, we have a team

of experts working on the ground in thecountries we source from. They findgreat products and use their expertise toinnovate in partnership with our suppliers.

We are a founding member of the EthicalTrading Initiative. We monitor compliancethrough supplier audits (2,600 werecarried out in 2013/14). While auditsare important, they are only part ofour programme to ensure strong labourstandards. Identification of key risk areasand collaboration across the industryare essential to drive improvements.

In addition, our pioneering online suppliercommunities have continued to grow. Theyprovide a free network for suppliers to talkto us, share advice and learn best practice.We are particularly encouraged that ourProducer Network now has 2,000 members

with representatives from 47 countries.

Customer trustCustomers of course want to know thatthe products they buy are great qualityand fairly priced.

To help build customer trust in our foodwe are simplifying our supply chains andensuring traceability. For example, wecarried out a stringent review of our meatsupply chain and published the resultsof extensive authenticity tests.

We are making our pricing and

promotions simple, consistent and easyto understand. Over the past year, wehave seen improvements across all ourprice perception measures in the UKand errors are at their lowest level. InFebruary 2014 we announced that wewould invest £200 million in lower pricingin the UK which will continue to buildcustomer trust.

As more and more customers chooseto shop online, data security has neverbeen more important. That’s why we areplanning to release a more comprehensiveCustomer Data Charter later this year

which will reflect our multichannel visionand reassure customers that we handletheir data responsibly.

Trading responsibly

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We have expertsbased across theworld providingtangible help forgrowers, sharingknowledge andresolving issues

What’s next

We will continue to develop thestrong long-term partnerships weneed to source high quality goodssustainably for our customers.

• Enhancing and expanding ourProducer Network and Knowledge Hub

• Investing in pricing and simplifyingpromotions for customers

• Launching an updated Customer Data

Charter to align with our multichannelvision and to reassure customers thatwe handle their data responsibly

We have invested in local expertise in the countries wesource from, ranging from Italy and Spain to South Africaand Chile. These colleagues have expert local knowledgeof the industry, including many years of growing experiencethemselves. Through regular visits they develop strongrelationships with our suppliers, helping to provide thebest quality products and supporting local communities.

Our team of supply chain experts

Our suppliers have been providing us withanonymous feedback for a decade. This year we carried out our most comprehensivepartner viewpoint survey yet, giving usa global view of supplier satisfaction.

We invited almost twice as many suppliersto give feedback as last year and increasedthe number of languages available forparticipants from 9 to 12. The greatergranularity of the report means that wecan identify relative areas of strength and

internally benchmark our markets andcategories with consistent measures. Wewill use this feedback to help build stronglong-term relationships with our partners.

Listening to and responding to concerns

Our established ‘protector line’ is primarilyused by colleagues and contractors to reportsuspected breaches of our code of businessconduct or internal company policies.

In the coming year we are launching anindependent ‘protector line’ service for useby any of our suppliers. Their employeeswill be able to raise confidentially concernsof wrongdoing in the provision of eithergoods or serv ices for or on behalf of Tesco.Issues will be recorded, investigated and

where necessary action will be taken.

In focus

For example, Daniel Pacheco is ourTechnical Manager for bananas in SouthAmerica. Daniel is from Costa Rica and has

worked as a banana grower for more than10 years. He understands how importantbananas are to the local economy andknows what training growers need, fromfarming techniques to food hygiene andsafety processes. He works closely withgrowers to ensure we meet high standardsand that we do not waste crop, forexample bananas not sold on the marketcan be transformed into compost andused in the field like fertiliser.

Watch the video hererealfood.tesco.com/videos-and-tips/banana-farming-in-costa-rica.html

To help build trust and strongpartnerships with our supplierswe have independent andanonymous feedback channels.

Some of our focus areas are:• Continuing to build supplier relationships

to help producers to deal with volatilityand uncertainty and give suppliers theconfidence to invest in innovation

• Investing in expertise and skills tosupport the development of oursupply chains

http://localhost/var/www/apps/conversion/tmp/scratch_4/realfood.tesco.com/videos-and-tips/banana-farming-in-costa-rica.htmlhttp://localhost/var/www/apps/conversion/tmp/scratch_4/realfood.tesco.com/videos-and-tips/banana-farming-in-costa-rica.htmlhttp://localhost/var/www/apps/conversion/tmp/scratch_4/realfood.tesco.com/videos-and-tips/banana-farming-in-costa-rica.htmlhttp://localhost/var/www/apps/conversion/tmp/scratch_4/realfood.tesco.com/videos-and-tips/banana-farming-in-costa-rica.html


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We are committed toreducing our impacton the environment –including the climate,

marine environments,forests, farmlands andother natural systems.

Understanding our impacts and addressingthem is integral to our long-term successas a business. It enables us to make apositive contribution to wider society andrespond to increasing concerns aroundlong-term food security and short-term

price volatility. This work starts in our ownoperations, but as a global retailer sourcingproducts from around the world, we alsohave a responsibility to safeguard theenvironments we source from.

Tackling climate changeWe want to be a zero-carbon business by2050. We have medium-term targets forcarbon emissions reduction, in our ownoperations and in the products we sell andthis year we achieved our carbon targets.We are improving the energy efficiencyof our stores and distribution centres,reducing the leakage of refrigerant gases

and continuing to pioneer the use ofnatural refrigeration. These translate intosignificant reductions in carbon and othergreenhouse gases from our own estate.Through the energy eff iciency measureswe have taken across the Group since 2006,we are saving over £280 million in energycosts per year. We have once again beenrecognised by CDP as one of the leadingFTSE companies for our carbon disclosure.

In addition to reducing the carbon impactof our operations, we are committed toworking with suppliers to do the same forthe products we sell. Our first step was toconduct a carbon hotspots analysis toidentify the total carbon footprints of our

products. We are now able to see whichof our product categories and lifecyclestages have the highest carbon intensity.This has enabled us to focus our work onthe areas of highest carbon intensity, forexample agriculture and manufacturing.

Using scarce resources responsiblyWe know that our environmental impactsgo beyond cutting emissions. We haveaccelerated our work with expertstakeholders inside and outside ourbusiness to improve our understandingof these impacts and to help us do more.In particular, we are now looking in

more detail at the broader impactsof agriculture, for example its effectson food systems and land use.

But we know that it takes critical massto effect real change and that we have abigger responsibility than just improvingthe sustainability of our own supply chains,so we are also looking for opportunitiesto make a contribution to the broaderindustry, for example by working withcolleagues in the Consumer GoodsForum towards zero net deforestation.

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What’s next

We will continue to challengeourselves to remain at the cuttingedge of emissions reduction.

Finally, we will be building on our sustainablesourcing work by strengthening our existingpolicies and sharing best practice. We havealready prioritised four agricultural rawmaterials that are globally recognised asdriving deforestation. These are palm oil,cattle products, soy and timber productsand we will now identify the next 5 to 10

to which we are most exposed.

Forests are home to some of the mostcomplex ecosystems and play an importantrole in regulating the earth’s climate.

Marine environments are integral to humansocieties, providing food and playing animportant role in regulating the climate.

According to WWF, tropical forests are home to over 300 millionpeople around the world and 1.6 billion people depend on theseforests for their livelihoods. They are also home to 80% of theterrestrial biodiversity on the planet. We have committed, throughour work with the Consumer Goods Forum, to achieve zero netdeforestation by 2020. In line with this, we have prioritised four keycommodities that are globally recognised as driving deforestation:

palm oil; cattle products; soy and timber products (including paper,pulp and packaging).

For each commodity we are mapping our value chain to help usdevelop sustainable sourcing options and drive action at both acompany and industry level. There are major challenges inachieving this target and so it is important that we workin partnership with other retailers, brands and our suppliers.

This year, we have made strong progressin reducing carbon emissions per casedelivered and remain on track towards our2020 reduction target of 25% comparedwith 2011.

Our distribution team continues to driveinnovation in fuel efficiency and emissionsreduction across our operating markets.By purchasing our own freight fleet inMalaysia, we can now use larger andmore efficient lorries. This will enable usto reduce the number of trips we makeby over 8,000 a year.

In Thailand, we are opening new distribution

centres so that we can transport products toour customers more efficiently. Our new

Reducing emissions in our distribution network

Khon Kaen regional distribution centre alonewill allow us to reduce the distance driven byour trucks by 400,000 kilometres each week.

In Europe we are utilising different modesof transport to maximise efficiency. Forexample, the products we source fromPoland are now shipped directly to theUK, rather than travelling by road. Similarly,for products from Turkey we are using seaand rail transport to help bring themto the UK. These improvements to ourEuropean freight network are helping usto save 4.3 million kilometres per year.

7.8%reduction in carbon emissions percase of goods delivered vs 2011

In focus

This year we launched our LED buyingclub, an innovative business model whichhelps our suppliers invest in energy

efficient lighting technology. Over thecoming year, we will look at similar waysto leverage our scale to help our suppliersimprove their sustainability performance.

Worldwide fish stocks are being depleted as a result of overfishing.In addition, some f ishing practices cause damage to the physicalmarine environment or result in by-catch – that is, marine speciesunintentionally caught in fishing nets.

Over the last year, significant concerns have been raised over theway that some fish are caught. Through our responsible seafood

sourcing strategy, we are working with the Sustainable FisheriesPartnership – a fisheries expert NGO – to assess the sustainabilityof all our fisheries. This will help to ensure that our sourcingpractices do not contribute to overuse or destruction of themarine environment.

Sustainable sourcing in forests… …and in marine environments

In our own operations, we have alreadymade excellent progress in moving awayfrom using emission-intensive refrigerantgases to lower-emission alternatives. Wehave been at the forefront of introducingnatural refrigeration and will increase thenumber of natural refrigerant systems wehave across our operating markets in the

coming year.


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Our colleagues serve ourcustomers and distributeour products every day. Itreally matters that we give

them the greatest possiblesupport to do their workand develop as individuals.

We want all our colleaguesto be proud of what theyachieve and feel supportedto put customers first ineverything they do.

Opportunities to get onAs the diagram on the next page shows,we help our colleagues to develop at everystage of their careers. To maintain andcreate more opportunities for colleagues,we have been further investing in training

and skills:

• Leaders at Tesco: To equip our colleaguesfor a new era of retailing, we have set up aleadership skills training programme. 2,500colleagues have already participated in thisthree-day Leaders at Tesco programme.

• Women in Leadership: We have astrong record as an equal opportunityemployer. To enable more women tofulfil their potential, our ‘Women inLeadership’ programme supportstalented women to build on theirstrengths and develop their careers.

• Tesco Academy: To make learning and

training as flexible as possible, we supportour Group training programmes with anextensive offer of online resources, fromshort animated videos on Leadershipand Management topics, to access tothe world’s largest library of businessbook summaries. This year, access toour Academy Online has doubled,from 20,000 users to 40,000.

• Fresh food expertise: We have beenconnecting our store colleagues withour supply chain, to improve customerservice and to ignite our colleagues’passion for the products that we sell.This includes taking our fishmongers

to see how our fish is caught.

A responsive andcollaborative cultureWe want to connect better with ourcolleagues. This means finding new waysto listen and asking relevant questionsthat encourage our colleagues to talk

to us freely and honestly. To build thisculture across the Group, we have a teamdedicated to developing new listeninginitiatives to help us identify opportunitiesfor change and improvement.

• Colleague engagement: We arecontinuously listening to our colleaguesto find out what matters to them andworking to make it better. This year, wetrialled a new survey with 90,000 of ourcolleagues called ‘What Matters To You?’,something which all colleagues will havethe opportunity to complete in 2014.We are also exploring social engagement

tools, for example the UK has trialled‘Your Voice Matters’, a quarterly onlinetemperature check.

• Tesco Angels: In Slovakia, colleagueshave been contributing to Tesco Angels,a scheme to support colleagues in timesof hardship. This year we raised £16,710and Tesco topped up donations by 100%.Almost 50 colleagues have already beenhelped through the programme.

Being a great employer


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In focus

Opportunities at TescoWe work to create opportunities at every stage of an individual’scareer so that they can achieve their aspirations. We are introducinga new People Plan across our markets for 2014/15 to ensure that allcolleagues are empowered to do their best in a happy, healthy,high-performing team.

Mid-careerIn the new global economy it matters more thanever that our colleagues can develop new skillsand grow as professionals at every stage of theircareers. That is why we pride ourselves on ourdevelopment and training programmes. This year 6.2% of our colleagues took part in one ofour formal development training programmesto help them move to the next level.

Advanced careerAcross the world there are serious concernsabout economic mobility and inequality – forexample, almost half of FTSE 100 CEOs wereeducated at independent schools. At Tesco wehave a strong record of enabling people to riseto the boardroom from the shop floor and 77%of our managers, directors and business leaders

have worked their way up within the business.

Retirement

An issue in many of our markets is howto support ageing societies. At Tesco, we offerflexible retirement so people can continue towork after national retirement age. In addition,we believe in lifelong learning – our oldestapprentice was 71.

Starting a careerFinding a job is a major concern across manyof our markets – particularly for young people.

We are proud of our record in creating newopportunities and we offer a huge rangeof paths into different careers. Across ouroperating markets, we employ over 100,000 young people and we have a range of entryprogrammes to fit different qualificationsand aspirations.


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tesco and society review 2014

Documents