tesco cr report 2011 final

8/3/2019 Tesco Cr Report 2011 Final

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CorporateResponsibility

Report 2011


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Achievements and challenges

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1bnlocallysourcedproductssoldintheUK

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erin2010

CarbonDisclosure

Project

Below is an overview of our keyachievements and challenges over the

past year. More information can be found

online. Our performance against our

Key Performance Indicators is on page 58.

Overview


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Providing customers with healthy choices 32

Healhy oons 35Bee nomaon 35cve lesyle 36

pogess on seleced 2010/11 oes 39

Actively supporting local communities 40

onge, gowng communes 43ommuny naves 44haable gvng 45

pogess on seleced 2010/11 oes 47

Creating good jobs and careers 48

rewads and benes 51tanng and develomen 53ommuncaon 54

incluson 55Healh and saey 56pogess on seleced 2010/11 oes 57

Governance

Key peomance indcaos 58

po es o 2011/12 60Managng cooae esonsbly 61How we lsen o move ou saegy 62

wads 64 vew om foum o he fuue

Overview

chevemens and challengeshe xecuves noducon 2tesco aound he wold 4

u aoach 6eang a susanable gowh busness 8

Buying and selling our products responsibly 10

ules 13

resonsble soucng 15pogess on seleced 2010/11 oes 19

Caring for the environment 20

lmae change 22Buldngs 26

tanso 27uly chan 27usomes 28

Wase, ackagng and ecyclng 30pogess on seleced 2010/11 oes 31

p10Buyingandselling

ourproductsresponsibly

p20Environment,

climatechangeandwaste

p32Healthyc

hoices

andbetter

information

Contents

Overview


5/70 TescoPLCCorporate Responsibility Report 20111

Overview

Responsibletrading

Environment

Health

Community

People

Governance

This report is about how we create value for our customers byrespecting their values and staying true to our own. Its about

doing business in a socially responsible and sustainable way.Unless otherwise stated, the statements and data relate to ourfinancial year 2010/11, the period March 2010 to February 2011.This is the period we are referring to when we describe an activityas taking place this year.

More information can be found on our website about how weapproach corporate responsibility in each of our markets, specificinitiatives and targets, as well as case studies and video contentshowing what it means for Tesco day-to-day.

This report and online content together form the basis of ourreporting on corporate responsibility.

Welcome to Tescos 2011Corporate Responsibility

Report.


6/702TescoPLCCorporate Responsibility Report 2011

Attimeslikethese,peopletendtovaluetheirlocalcommunitiesmore,butatthesametimetoworrythattheyareundergreaterthreat.WhetheritisexpressedthroughProfessorRobertPutnamsseminalworkonthedeclineofcivicengagementintheUS,or

throughUKPrimeMinisterDavidCameronsideaofaBigSociety,wecanseeadesiretostrengthenthefabricofcommunitiesindiff iculttimes.Businessmustplayapositiveroleinthiswork,andbusinesseslikeTesco,whichliveandbreatheintheveryheartofcommunities,haveaparticularresponsibility.Iamthefirsttobelievethatthereisalwaysmorewecando.ButIampleasedthatwearemakingarealcontribution,whetheritisthroughourSchoolsofExtendedEducationwhicharesuchavitalpartofourstoresinSouthKorea;ourCommunityFairsintheUKwhichhelpedlocalcharitiestorecruitafantastictotalofover10,000newvolunteerslastsummer;ortheworkofourCommunityChampionsinseveralcountriesdedicatedmembersoftheTescoteamwhoeverydaymakeapositivedifferenceforlocalschools,charitiesandvoluntarygroups.

AfterthefailuretosecureaglobalagreementonclimatechangeatCopenhagenattheendof2009,wesawmorepositivesignsinCancunlastDecember.IsharetherealhopethatfurtheradvancescanbemadeinDurbanlaterthisyear.Whilstthepaceofpoliticalprogressmayappearslow,onereallypositivedevelopmenthasemerged.Aswehavecometorealisethatthepoliticianscannotbythemselvesshouldertheburdenoftacklingclimatechange,wehavebeguntounderstandtheextraordinarypotentialcontributionthatbusinesscanmake.

Again,Ibelievethatretailandthebroaderconsumergoodsindustryhasahugelyexcitingopportunity.Undertheoutstandingleadershipofmypredecessor,SirTerryLeahy,Tescosetitself

firmlyonthepathtobealow-carbonbusinessby2020andazero-carbonbusinessby2050.Weareontrackwithourtargets,openinglow-carbonandzero-carbonstoresaroundtheworld,andarereportingforthesecondsuccessiveyearabsoluteemissionsreductionsintheUK,ourlargestmarket.

Welcome to my first Corporate Responsibility

Report as the Group CEO at Tesco.

IhavehadtheprivilegetoserveTescoanditscustomersfor

37years,firstintheUKandmorerecentlyinourgrowinginternationalbusiness.Ihaveseenatfirsthandhow,despitetheenormousdiversityofthe14countriesinwhichweoperate,ourcustomersandourstaffexpressthesamedesires:toleadhealthylives,tobepartofstrongcommunities,tocarefortheenvironment,andtogivetheirloyaltytobusinessesthatprovidegoodjobsandbuyandselltheirproductsresponsibly.

WegiveexpressiontotheseuniversalthemesthroughourCommunityPromises,andtheyformthebackboneofourcorporateresponsibilitywork.

Lookingbackoverthepastyear,manyfamiliesinmanycountrieshavefoundeconomicconditionschallenging.LedbytheAsian

economies,prospectshavesinceimprovedandwecananticipateabrighterfuture,evenincountrieswherethepaceofrecoveryisslow.Tescoismakingapositivecontributiontoeconomicrecoveryinmanymarkets:investingingrowth,buildingrelationswithnewsuppliers,andprovidingrewardingjobsandcareers,notonlyinretailandfinancialservicesbutalsoinemergingareaslikelow-carbonengineering,logisticsandresourcemanagement.

Throughouttheglobaldownturn,byimprovingproductivityandbybearingdownoninflationandothercosts,Tescohasplayedabigpartinhelpingfamiliesbalancetheirbudgets.Wemustneverforgetthatprovidingsafe,nutritiousandaffordablefoodisoneofourmostvaluedcontributionstocorporateresponsibility.

Chief Executives

introduction

Overview


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First,asaretailer,thecustomermustbeattheheartofourstrategy.Anybusinesscanmakeprogressthroughitsownactionsandthroughitscommercialrelationships.AtrustedbrandlikeTescocaninform,enlistandempowermanymillionsofcustomersaroundtheworld.Ourworkinincentivisinggreenchoicesisastart,andthereissomuchmorewecando.IamconfidentthattheSustainableConsumptionInstitutewhichTescoendowedattheUniversityofManchestercanguideusandothersinthiswork.

Secondly,ourworkoncorporateresponsibilitycannotsucceedwithoutthecollaboration,supportandcandidguidanceofthemanyNGOsandothermembersofcivilsocietywhoshareourpassionforcommunityandsustainability.Iwantpartnershipinthisareaalsotobeamarkofmyleadership.

IhopeyouenjoyreadingthislatestCorporateResponsibilityReport.Itisveryimportantwork.Iwelcomeyourfeedbackandyourengagement.

Philip Clarke

Formethough,theprizeisevenbiggerthanthis.Emissionsinoursupplychainingrowing,manufacturing,processingandtransportingthegoodswesellareatleasttentimesthoseofourownbusiness.Recognisingthis,wehavesetourselvesagoaltoreducecarbonemissionsfromtheproductswesellby30%by2020.ItisherethatIseetheextraordinarypotentialoftheconsumergoodsindustry.Oursupplychainsoperateacrossnationalboundaries,encompasseverycontinent,andinvolve

thousandsofdifferentproductsandprocesses.Byengagingourthousandsofsuppliersacrosstheglobe,bysharingknowledge,andbycollaboratingwithotherglobalbusinessesandNGOs,Tescoandourindustrycanhaveatransformativeeffect.

Wehavemadeastart.ThroughourjointleadershipoftheglobalConsumerGoodsForumprogrammeonsustainability,Tescoandmanyotherbusinessesarecommittedtothehugelysignificantgoalofhelpingtoendglobaldeforestationby2020.

Thisworkbringshomeclearlythatthechallengeswefaceonsustainabilityareinterconnected.Climatechangecannotbetackledwithoutasolutiontorainforestdestruction.Thesurvivalofourrainforestswillnotbeachievedunlesswefindaway

toincreaseglobalfoodproductionsustainably.Thisinturndependsonconcertedadvancesintacklingwaterdepletionandinreducingwaste.

Sothereismuchmoretobeachievedonsustainabilityinthecomingyears.Tescohasahugecontributiontomake,andIwantthattobeamajorfocusofmyleadership.

Incorporateresponsibilityasinotherareas,partnershipiskey.Iseetwoareasoffocushere.

TescoPLCCorporate Responsibility Report 20113

Overview

Responsibletrading

Environment

Health

Community

People

Governance


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Headquartered in the UK,we employ 492,714 staff in14 markets, and operate5,380 stores worldwide.

4Tesco PLC Corporate Responsibility Report 2011

Tesco around

the world

USRevenue*

495mNumber of stores

164Employees

4,134Selling space (sq ft, % of Group)

1.7m sq ft1.6%

UKRevenue*

40,766mNumber of stores

2,715Employees


36.7m sq ft35.4%

Tesco BankRevenue*

919mEmployees

1,274

Employee figures represent the average number ofemployees during the year

* Revenues are sales excluding VAT and exclude the

impact of IFRIC 13 (customer loyalty schemes)

GDP growth: Economist Intelligence Unit

Overview


9/70Tesco PLC Corporate Responsibility Report 20115

EuropeRevenue*


1,082Employees


30.2m sq ft29.2%

AsiaRevenue*


1,419Employees


35.0m sq ft

33.8%

IndiaIn India, we have an exclusive

franchise agreement with

Trent, the retail arm of the

Tata Group. We are supporting

the development of their Star

Bazaar format.

Overview

Responsibletrading

Environment

Health

Community

People

Governance


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Buying and selling our products

responsibly, p10

Caring for the environment, p20

Actively supporting local

communities, p40

Providing customers withhealthy choices, p32

Creating good jobs and careers, p48

Overview

Responsibletrading

Environment

Health

Community

People

Governance


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Caring for the environment

Atthemostbasiclevel,reducingourenvironmentalimpactsavesusmoney,aswellasensuringthatweremainsustainableandcompetitive.Between2000and2008,wehalvedourenergyusepersquarefoot.Ifwehadnotmadethesesavingsandthosewehavemadesince2008ourenergyusewouldbemorethandoubleitscurrentlevel.Attodaysenergyprices,wearesavingover150millionperyearinenergycosts.

OurfocusontheenvironmenthastakenusintonewbusinessareassuchasourHomeEfficiency

Service,offeringinsulationandsolarenergyproductstoUKhomeowners.HavingareputationasagreenpioneerhelpsourexpansioninnewgrowthmarketssuchasChinaandSouthKorea,whereweareabletoshareourexperience.

8TescoPLCCorporate Responsibility Report 2011

Creating a sustainable

growth business

Buying and selling our products responsibly

Buyingandsellingourproductsresponsiblyhelpsusbuildtrustamongallourstakeholders.TrustintheTescobrandenablesustogrowourexistingbusiness,

aswellasdiversifyintonewbusinessareassuchaspersonalfinanceandtelecoms.

Strongrelationshipswithoursuppliersallowustoinnovatetomeetchangingcustomerneedsandtoattractnewsupplierstoworkwithus.Assupplychainsincreasinglycomeunderstrainfromenvironmentalchangeandpopulationgrowth,weareworkingtomakethemmoresustainable.

Corporate responsibility at Tesco is about creating a sustainable core for a successful

growth business.

As highlighted by Forum for the Future in our 2010 Corporate Responsibility Report, thereare opportunities for Tesco to take the lead in developing new retail business models and

realise our ambition to use our size as a force for good.

150msavedperyearinenergyco

sts

Overview



Actively supporting local communities

Providing customers with healthy choices

Creating good jobs and careers

Businessesthatareintunewiththeneedsoftheircommunities,sensitivetotheirconcernsandthathelpthemmeettheirgoals,arerewardedwithmorecustomersandgreaterloyalty.

Understandinglocalcommunitiesallowsustoserveourcustomersnomatterwhattheirbackgroundandprovidethemwithnewservicesandproducts.

Insomemarkets,customersexpectbasicfoodsafetyasagiven;inothers,itremainsfront

ofmind.Ifwehaveareputationforsellingsafefoodinamarketwherefoodsafetyisanissue,ithelpsusbuildtrust,givingusasignificantcompetitiveadvantageandtheopportunitytoworkwithgovernmentstoimprovestandards.

Helpingcustomerseatmorehealthilyallowsustoopenupnewbusinessopportunities,especiallyinmarketswhereobesityisamajorissue.Ourgetactiveprogrammesaroundtheworldhelpourcustomersgetfit,aswellasincreasingtheirloyalty.

Oursuccessdependsonour492,714staffworldwidedoingagreatjobforcustomers.Thismeans

attractingtherightpeopleandhelpingthemtodevelop.Aswegrow,wecreatenewjobs,andhelpstafffulfiltheirpotentialsothattheycandeliverforcustomersandcommunities.

Ifwefailtoattractandretaingoodpeople,wefindithardertoserveourcustomerswell.Asaresult,theymaychoosetogoelsewhere.Providinggoodjobsandcareersandhelpingstafftofeelgoodaboutthecompanytheyworkformeanstheywillthriveandstaylongerwithus,anddothebestjobforcustomers. 492,714

staffdoingagreatjobworldwide

Strongrelationshipswithour

suppliersallowustoinnovateto

meet changing customer needsand to attractnew suppliersto workwith us.

Overview

Responsibletrading

Environment

Health

Community

People

Governance



Buying andselling ourproductsresponsibly



Overview

Responsibletrading

Environment

Health

Community

People

Governance



Responsible

trading

Throughout the world, our customers want

safe, affordable products. any also want

to know that what they buy is sourced to

robust ethical and environmental standards.We believe it is possible to provide for all

our customers, whatever their needs, whilstupholding strong standards across our

business and in our supply chains.

Buyingandsellingourproductsresponsiblymeansensuringeveryoneinoursupplychainistreatedhonestlyandfairly,andthatcareistakentominimisetheimpactourproductshaveontheenvironment.Thatincludeshowwe:

treatoursuppliersandhowoursuppliersemployeesaretreated;

workwithcommunitieswherewesourceourproducts; establishandmonitoranimalwelfare;and

worktoensureproductscomefromsustainablesourceswhereverpossible.

Weworkinpartnershipwithoursupplierstoensureourproductsaresourcedresponsibly.Ourtechnicalteamsacrosstheworld,workingalongsideourcommercialteams,ensurethatourstandardsaremetineveryareaofourbusiness,andwehaveethicaltrademanagersinkeysourcingcountries.Formoreinformationseewww.tescoplc.com/tradingfairly.

Insomemarkets,productscertifiedasbeingresponsiblysourcedareincreasinglyimportanttoourcustomers.Inothers,itisanew

concept.Trueleadershipmeansmakingresponsiblysourcedproductsmuchmorewidelyavailable,sothatmakingamoreresponsiblechoiceisanaffordable,everydaydecision.

Wehavecommittedtoreducingthecarbonemissionsoftheproductsinoursupplychainby30%by2020.Formoreinformationseepage27.

1,600Independentethicalauditscarriedoutonsuppliersites

100%NewUKtargettocatchown-brandcannedtunabypoleandlineby2012

1 billionLocallysourcedproductssoldintheUK

20%PalmoilinTescoUKown-brandproductsfromanRSPOcertifiedsystem

2010/11 in numbers




SUPPERS

abour conditions in our supply chain

Millionsofpeoplewhoworkinoursupplychainrelyonusfortheirlivelihoods,andourtrademakesanimportantcontributiontothecommunitiesofmanymore.Inturn,werelyonoursupplierstoprovideuswithproductsourcustomerswant.Ensuringgoodlabourstandardsthroughoutoursupplychainisnotonlytherightthingtodo,butalsomakesgoodbusinesssense.

WewereafoundermemberoftheEthicalTradingInitiative(ETI)andweexpectallsupplierstomeetthestandardssetoutundertheETIBaseCodeandensuretheirworkerstherightswithinit.Formoreinformationseewww.ethicaltrade.org.

WhilesuppliersoperatingindevelopedmarketsmostlycomplywiththeprovisionsoftheBaseCode,complianceinothermarketsremainsmorechallenging.Wesupportoursuppliers,wherevertheyarebased,tomeetthestandardswerequire.In2009,welaunched

TradingFairly,anewapproachtoethicaltrading,basedonfourkeyprinciples:

valuesensuringweworkwithsupplierswhoshareourvalues;

monitoringgettingtothetruthaboutconditionsforworkersinoursupplychains;

improvementsupportingoursupplierstoimprove;and

transparencybeingopenandhonest,workingwithothers.

Thisyear,weextendedourTradingFairlyprogrammetoourowncorporatepurchasing.Thiscoversthegoodswebuyforourownuse,andservicescontractedwiththirdparties:everythingfromcarrierbagstocarwashes.

Relationships with suppliers

TomakeTradingFairlyareality,weinvestsubstantiallyinsupportingsupplierstodeliverit.OurethicaltrademanagersinBangladesh,ChinaandSouthAfricahelpsuppliersand

stakeholdersaddresslocalandnationalchallenges.

Atthesametime,wefundprojectstoaddressspecificlocalneeds.

WearesettingupaSkillsAcademyinBangladeshtoprovidetrainingforoursuppliers,helpingthemimproveeff iciency,makingthemmorecost-effectiveandimprovingconditionsforworkers.

OurLeadershipAcademyinSouthKorea,scheduledtoopeninJuly2011,willalsoprovidetrainingforsuppliers.Initiativeslikethiscanmeanthatgovernmentslookmorefavourablyonoursuppliersasexamplesofbestpractice,andrecognisethevalueofourtradeasaforceforgoodinlocaleconomies.

ValuesSuppliers who share

our values

Communicateourvalues

SetstrongstandardsQualifynewsuppliers

TransparencyBe open and honest

WorkwithothersBuildawarenessBetransparent

MonitoringGet to the truth

AssessriskAudit,reportaccuratelyUnderstandworkersIdentifytrends

ImprovementSupport and improve

CorrectbreachesBuildlong,strongrelationships

DevelopskillsAssistimprovementRewardsuccess

Trading Fairly model

Buyingandsellingourproductsresponsibly

meansensuringeveryoneinoursupply

chain is treated honestly and fairly, andthat care is taken to minimise theimpactour products haveon the environment.

Overview

Responsibletrading

Environment

Health

Community

People

Governance



Rewarding suppliers

TomanageoursupplychaininUKclothing,wenowclassifysuppliersinthreecategoriesGold,SilverandBronzethroughourpreferredsupplierscheme.Weaimtodevelopathree-yearbusinessplanwithourGoldsuppliers,allowingthemtoplanfortheirlabourneedsandwagesoverthelong-term,andbenefit

fromhighervolumesoftrade.InordertoqualifyforGoldstatus,suppliersmustdemonstratequality,reliabilityandgoodethicalperformance.Thisschemehasbeensuccessfulinmotivatingsupplierstofocusonethicalstandards,andisscheduledforroll-outtootherproductsin2012/13.

OurTradingFairlyAwardsrewardthosesupplierswhoaremakingparticularlystrongeffortstoimproveconditionsforworkers.Formoreinformationseewww.tescoplc.com/tradingfairly.

Growing exports

Westrengthenoursupplychainssustainabilitybyhelpingexportsgrow.

InIndiawehavebeenworkingwiththeJointEconomicTrade

Committee(Jetco)tohelpIndianexportersaccessinternationalmarkets,andheldaTescoMeettheBuyereventinMumbaiin2010.

IntheUK,weholdanannualshowcaseforThaigoodsintheUK.Thisyear,athree-weekeventwasheldinmorethan430stores,promotingfreshThaifruit.

Thisyear,weheldaTurkishWeekeventin110storesinCentralEurope,inwhichwesoldaspecialrangeofproductsfromTurkey.Duringtheweek,wesold1.2millionworthofproducts.

Weaimtobuildlong-termrelationshipswithsuppliers,sogettingregularfeedbackfromthemisahighpriority.Theresultsofourannualsurveyofsuppliers,SupplierViewpoint,formoneofourGroupKeyPerformanceIndicators(seepage58formoreonKPIs).Theanonymoussurveyismanagedbyanindependentthird-partyprovider.

SuppliersareaskedindetailabouttheirrelationshipwithTesco,includingwhetherTescotreatsthemwithrespectandprofessionalism,andhowcommittedwearetomeetingtheircustomersrequirements.In2010/11:

theresponserateof54%wasthehighesttodate,althoughslightlybelowourtargetof60%;and

weexceededourtargetof80%positiveresponses,achievinganaverageof82%positiveresponsesfrom3,887suppliersworldwide.

Robust supplier audits

Ourauditingprocessworkstoidentifykeyissuesandfocus

resources.Ifwediscoverthatworkershumanrightsarenotrespected,weworkcloselywiththesuppliertoaddresstheissueimmediately.Ifthesuppliershowsalackofcommitment,wemovetoterminatetherelationship.Ourindustry-leadingAuditorRecognitionProgrammeensuresthatweonlyacceptauditsconductedbyvetted,independentauditors.

During2010,over1,600suppliersitesweresubjecttoindependentethicalauditsandTescostaffmadeanadditional4,300visits.Formoreinformationseewww.tescoplc.com/tradingfairly.

Weaimtobuildlong-term

relationshipswithsuppliers,so getting regular feedbackfrom themis a high priority.



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CENTRALEUROPEANSUPPLIERPROGRAMME

FeedbackfromsuppliershashighlightedthatsomesmallsuppliersinourCentralEuropeanmarketsworryaboutthepotentialimpactthatTescocouldhaveonthem.Asaresult,inthecomingyearwewillfocusonextendedprogrammes

foroursuppliersintheCzechRepublic,Hungary,Poland,SlovakiaandTurkey.Wewillholdregionalmeet-the-buyerroadshowstoincreasethenumberofproductswesellfromsmall,regionalproducers.


UK Bribery Act

TheUKBriberyActbecomeslawin2011,creatinganewcriminaloffenceforUKcompanieswhichfailtopreventbriberybeingcommittedbyemployeesandassociatedpersonsactingfororonthecompanysbehalf.Acompanysonlydefenceisthatithadadequateproceduresinplacetopreventsuchcontraventionsoccurring.

Wealreadyhavewell-establishedpoliciesandprocessesrelating

tobriberyandgifts,andourCodeofBusinessConductprovidesveryclearguidanceforstaffaroundtheworldonthehighstandardsofbehaviourweexpect.ThesewillbeupdatedbeforetheActcomesintoeffectandwillbesupportedwithtrainingandcommunicationacrosstheGroup.

RESPOSBE SOURCG

Wearecommittedtotheresponsiblesourcingofrawmaterialsforourown-brandproductswhereverpossible,andtomanagingtheimpactwehaveonbiodiversity.WehavemademostprogressintheUK,andareworkingtoimprovestandardsinallourmarkets.

TogetherwithUnilever,Tescoco-chairstheSustainabilitySteeringGroupoftheConsumerGoodsForum,andisleadingtheprojectannouncedinDecember2010toachievezeronetdeforestationby2020.Thisworkinvolvesdevelopingandcommittingtosustainablesupplychainsforeachofthecommoditiesbelow.

Palm oil

Palmoilanditsderivativesappearinsmallquantitiesinmanyofourproducts,andweareworkingtoensurethattheycomefromsustainablesources.WearefullmembersoftheRoundtableonSustainablePalmOil(RSPO)andofthecoalitionofover50UK-basedcompaniescallingontheindustrytostopalldeforestationofrainforestandpeatforestsforpalmoilexpansion.

In2010,wesetatargetofusing100%certifiedsustainablepalmoilinallourUKown-brandproductsby2015,andsourcingallouroilfromanRSPO-certif iedsystemsuchasGreenPalmby2012.Thisisachallengingtarget,asthetraceabilityandcertif icationofpalmoilanditsderivativesisstillinitsinfancy.

Wehaveissuedallofourown-brandsupplierswithatimelineandcodeofpractice,settingoutourdetailedexpectations.

From2012,wewillonlyacceptUKproductsusingpalmoilthatisfullytraceablesothatby2015allthepalmoilinourUKown-brandproductswillcomefromcertifiedsustainablesources.

Thisyear,wehavecontinuedtomakeprogressagainstourtarget.Around20%oftheTescoown-brandproductsthatcontainpalmoiloritsderivativesnowcomplywithourcodeofpractice,representingprogresstowardsour2012and2015targets.

9,700InPoland,wesellmorethan9,700regionalproducts.

Overview

Responsibletrading

Environment

Health

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Governance



Seafood

AstheUKsbiggestfishmonger,withmorethan480fishcounters,weshareglobalconcernsaboutthesustainablesourcingofseafood,andarecommittedtotakingfishonlyfromresponsiblymanagedsources.WearedevelopingarobustsystemforevaluatingfisheriesinassociationwiththeSustainableFisheriesPartnership,guidedbyprinciplesandpracticalrecommendationsfromleadingindustrybodiessuchastheMarineConservationSocietyandtheMarineStewardshipCouncil.

Weshareconcernsaboutcertainmethodsoftunafishing.In2010,wehitourtargetofsourcing25%ofourown-brandcannedtunabypoleandline,andthisyearwecommittedtosourcing100%inthiswaybytheendof2012,providedthatthiscanbeachievedinasustainableway.Meetingthischallengingtargetwillrequireustoworkwithoursupplierstoeffectrealchangeintheindustry.

Wealsorecogniseourresponsibilitytooffercustomersalternativespeciesoffish.IntheUK,wherecustomerstendtopurchaseonlyafewspeciescod,haddockandsalmonwearehelpingtointroducecustomerstootherspeciessuchasdab,pouting(seebox)andcoley.Wenowhaveupto40speciesavailablethroughourUKfishcounters.

Ineachofourinternationalmarkets,seafoodpreferencesandsourcesofsupplyaredifferent.Wearethereforeworkingwithoursupplierstodevelopaprogrammetoimprovethesustainabilityofourofferinginourinternationalmarkets.Thisyear,wesignedWWFssharedstatementontheEUCommonFisheriesPolicy,callingforthe2012reformofthepolicytodeliversustainablefisheriesthroughoutEurope.

Formoreinformationseewww.tescoplc.com/seafood.

Timber

WearecommittedtopurchasingtimberandtimberproductsfortheUKmarketonlyfromlegal,sustainablesources.

ThefourmilliontillrollsweuseperyearintheUKarecertif iedbytheForestStewardshipCouncil(FSC).

TheTescoMediaPublishingCentre,whichprintstheTescoDirectcatalogue,flyersandleafletsisfullycertifiedbyFSCandtheProgrammefortheEndorsementofForestCertification(PEFC).

In2010,wetookthedifficultdecisiontodelistAsiaPulp&PaperasasuppliertoourUKandChinesebusinesses,aswecouldnotsatisfyourselvesofthesustainabilityoftheirsourcing.

Soy

IntheUK,ourown-brandsoyproductscomeonlyfromsustainable,non-GMsources.WearesignatoriesoftheBrazilianmoratoriumonthesourcingofsoyfromtheAmazon,whichhasbeensuccessfulinreducingdeforestationfromsoyproduction.Ourinternalsystemstrackallsoy-relatedingredientstoensure

theycomefromanon-GMsourceoutsideoftheAmazonbiome.

WealsotrackthesoyusedasanimalfeedbyourmeatsuppliersthroughFEMASanindependentassuranceschemeforfeedandcantracethisbacktoasourceoutsidetheAmazonbiome.Thissystemalsoguaranteesnon-GMpoultryfeedforbothmeatandeggs.

ocal sourcing

Buyinglocalproductshelpstodevelopandsustainthecommunitiesinwhichweoperate,andisoftenwhatourcustomersdemand.Wehaveruninitiativesinseveralmarketstoboostourofferoflocalproducts.Forexample,thisyearwerantworegionalsupplierforumeventsinHungary,sourcingandsigningupnewlocalsuppliers.

Manyofourmarketshavesoldlocalproductsforsometimebecauseimportsaremoreexpensive.InPoland,wesellmorethan9,700regionalproducts.

Inothermarkets,thereisincreasingdemandfromcustomersforlocallyproducedandsourcedfoods.IntheUK,customerstellusthatbuyinglocalfoodsisimportanttothemformanyreasons,includingsupportforthelocaleconomy.LocallinesarethoseproducedandsoldwithinacountyorneighbouringcountyinEngland,orwithinthecountryinIreland,ScotlandandWales.

WehavefivededicatedregionalbuyingofficesacrosstheUK.Thisyearweincreasedsalesoflocalproductsto1billion,from850millionin2009.

TescoisthefirstUKretailertolaunchawebsitededicatedtolocalfoods,atwww.tesco.com/local.

Fairtrade

Fairtradeproductsaremostsuccessfulinourmoreestablishedmarkets.IntheUK,wenowhavethelargestrangeofFairtradecottonschooluniformitemsonthehighstreet,andeveryyearweparticipateinFairtradeFortnight,offeringpromotionsonFairtradeproduce,chocolate,teaandcoffee.ThisyearwelaunchedFairtradeproductsinPoland.Formoreinformationseewww.tescoplc.com/fairtrade.


DIRECTSOURCINGINCHINA

InChina,weworkwiththeGovernmentonalargenumberofagriculturalprojects.Wehave123directsourcingbasesin40cities,andsell1,400itemsthataresourceddirectlyfromfarmers,helpingthemimprovetheirmargins.Forexample,

inShandongweworkwithleadingagriculturalcompaniestopurchase20,000tonnesofFujiapplesdirectlyeveryyear,benefitingmorethan50,000farmers.

HELPINGCUSTOMERSTOTRNEWSPECIESOFFISH

Earlierthisyear,ourUKbusinessbegantosellpouting,aresponsiblysourced,low-costwhitefish.DespitebeingthemostcommonspeciesoffishinUKwaters,poutingwaslittleknownamongcustomers.SoonafteritslaunchatTesco,weweresellinghalfasmuchpoutingascod,theUKsmostpopularwhitefish.Poutingisnotatargetspecies,sopromotingittocustomershelpstotakepressureoffstocksofotherwhitefishsuchascodandhaddock.



40speciesa

vailable

throughourUK

fishcounters

Overview

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Health

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Governance



Water

WaterscarcityisanissueinmanyofthecountriesinwhichweoperateincludingChina,India,TurkeyandtheUSandaffectsmanyofoursuppliers.Inthenextyear,wewillconductdetailedsurveysofwateruseinourUKstores,andtrialwater-savinginitiatives,sowecansetawaterreductiontargetforourUKstores

anddepots.

However,waterusedinourdirectoperationsrepresentsaround1%ofthetotalwaterfootprintoftheproductswesell.Weestimatethatover850billionlitresofwaterareusedinoursupplychaineachyear,andanadditional1,000billionlitresareusedwhencustomersuseourproducts.In2011/12,wewillworkwithtwopriorityproductgroupsfreshproduceandclothingtodevelopwaterstewardshipstrategieswithsuppliersinwater-scarceregions.WewillalsosharebestpracticeonwatermanagementwithoursuppliersthroughourKnowledgeHub(seepage27).

Animal welfare

Wehavehighstandardsforanimalwelfarenotonlybecauseourcustomersdemandthem,butbecauseitistherightthingtodo.Aswithmanyofourresponsiblesourcingpolicies,customersandotherstakeholdersaroundtheworldhavedifferingviewsonanimalwelfare.

WearetheonlymajorsupermarkettoinsistonthesamehighstandardsforallfreshmeatsoldintheUK,evenifitisimported.Forexample,wedonotallowtheuseofsowstallsinpigproductionanywhereintheworld.

Wearealsotheonlymajorsupermarkettocarryoutindependentwelfareauditsabovetheminimumindustrystandards.AllfreshmeatandpoultrysupplierstoourUKbusinessareinspectedatleastevery15monthsbyIntegraFoodSecure,anindependent,accreditedauditcompany.

ThisyearwecommittedtoworkingwithoursupplierstoensureallabattoirsthatsupplyourUKmarketwillhaveCCTV,monitoringcompliancewithourhighanimalwelfarestandards.

Formoreinformationseewww.tescofarming.com.

Animal testing

Wedonotsupporttestingonanimalsforcosmeticorhouseholdproducts,anddonotcarryoutorcommissionsuchtestsonourown-brandproductsortheingredientstheycontain.WesupporttheFundfortheReplacementofAnimalsinMedicalExperimentation(FRAME),whichseekstoendanimaltesting.

TescoNaturallyandNaturalrangesdonotuseanyingredientthathasbeentestedorretestedonanimalsforcosmeticpurposessince31December1990.AllotherTescoproductsoperateafixedcut-offdate,foringredients,of31December2007.

100%In2010,wereachedourtargetofcatching25%ofourown-brandcannedtunabypoleandline,andthisyearwecommittedtosourcing100%inthiswaybytheendof2012.

Allfreshmeatandpoultrysuppliers

toourUKbusinessareinspectedatleast

every15monthsbyanindependent,

accreditedauditcompany.

TESCOBANK

AtTescoBank,wehaveadutytoourcustomerstosellourproductsresponsibly.Weassessallcreditapplicationsagainstourcreditscoringandaffordabilitycriteria.

Whencustomersfindthemselvesinfinancialdifficulty,wewill

workwiththemtounderstandtheircircumstancesandagreesuitablepaymentplanstohelpthemrepaytheirdebts.

Formoreinformationseewww.tescoplc.com/countries.




PROGRESS O SEECTE 2010/11 PRORTES

Poland

Czech Republic/Slovakia

alaysia

Runtrainingfor50regionalsuppliers

Createopportunitiesforlocalsuppliersthroughsupplierengagementevents

IncreasesalesofproductsfromsmallbusinessesbyRM630million

(129million)

Achieved we ran training for130 regional suppliers

Achieved as a result of these events,we now sell local breads in our Czechstores

Achieved we increased sales of

products from small businessesby R670 million (137 million)

UK 25%ofourcannedtunatobecaughtbypoleandlineby2010 Achieved our target is now 100%by 2012

Overview

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Health

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Caring fortheenvironment

ZeroWeaimtobeazero-

carbonbusiness

by2050



Overview

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Health

Community

People

Governance



A growing,

green business

As one of the worlds leading retailers, we

have a clear responsibility and a significant

opportunity to protect our environment.

Ouraimistocreatemoresustainablewaysofdoingbusiness.Wearereducingourimpactontheenvironment,includingenergyuseandwaste.Weareworkingwithoursupplierstomanageresourcesmorecarefullyinoursupplychains:forexample,reducingwaterusageortacklingdeforestation.Weareempoweringourcustomerswho,together,canhaveapositiveimpactontheenvironmentthatfaroutweighsourown,tocreateamassmovementingreenconsumption.

CATE CHAGE

Climatechangeisoneofthegreatestthreatsmankindfaces.Ittranscendsnationalboundaries,andthreatenstoaffectusall

inmanydifferentways:fromriskstosupplychains,tothedirectimpactthatchangesintheclimatewillhaveonourcustomerslivesandtheoperationofourstores.

Retailbusinessescanplayapowerfulroleintacklingclimatechange.Wearedeterminednotonlytoplayourpart,buttoplayaleadingrole.

ForTesco,leadershiponclimatechangemeans:

settingaclearexamplethroughourchallenginglong-termtargets,andmakinggenuineprogressagainstthem;

workingwithotherbusinessestotransformtheconsumergoodsindustrybytacklingcarbonhotspotsintheglobalsupplychain;

usingourpositionasatrustedglobalbrandtoinspireourstaff,customersandneighbourstotakeactiontoprotecttheenvironment.With492,714employeesandmillionsofcustomersworldwide,wecanhaveapositiveinfluenceonmillionsofpeopleeverysingleday;and

workingwithgovernmentsacrosstheworldtobuildanunderstandingofclimatechangeandtheactionsneededtotackleit.Forexample,wehaveadvisedtheUKGovernmentonreducingcarbonemissionsacrosstheGovernmentestate,andweorganisedaconferenceinShanghaiinsummer2010,bringingtogethertheChineseGovernment,academics,NGOsandtheprivatesectortodiscusshowtomeetthechallengeofclimatechange.


ZeroOurfirstoverseaszero-carbonstoreinJaromer,CzechRepublic

1 billionGreenClubcardpointsawardedtoUKcustomerseachyear

1,100CarbonfootprintscalculatedforeverydayTescoproductsintheUK

24,000ChildreninTurkeyeducatedontheimpactofclimatechange

2010/11 in numbers



Ourglobaldirectcarbonfootprintismeasuredincarbondioxideequivalent,orCO2e.Differentgreenhousegaseshavedifferent

effectsontheclimate,andCO2eisawayofstandardisingtheglobalwarmingeffectoftheseemissions.

Eachyear,weupdateourcarbonfootprintcalculationstoreflectthelatestUKGovernmentguidance,allowingustoassessourperformanceaccuratelyovertime.Lastyear,wereportedour2009/10globaldirectcarbonfootprintas5.17milliontonnesofCO2e.Wehaverecalculatedthisfigurewiththelatestemissions

factors,andhavealsoincorporatedarevisionduetoanerrorwithsomeemissionsfactorswithinourcarbonreportingtool.

Therevised2009/10globaldirectcarbonfootprintis5.35milliontonnesofCO2e.

Formoreinformationabouthowwecalculateourcarbonfootprint,includingreportingstandards,ourdefinitionofdirectemissions,andthecurrentemissionsfactors,seewww.tescoplc.com/reporting.

How we calculate our carbon footprint

Tobecomeazero-carbonbusinessby2050

By2012,wewillhalvedistributionemissionsofeachcaseofgoodsdelivered,againstabaselineof2006

By2020,wewillhalveemissionsfromour2006/7baselineportfolioofbuildings

Newstoresbuiltbetween2007and2020toemithalftheCO2eofa2006newstore

Toreducetheemissionsoftheproductsinoursupplychainby30%by2020

Tofindwaystohelpourcustomersreducetheirowncarbonfootprintsby50%by2020

Wehavesetambitioustargetstoreduceourownfootprint,reducetheemissionsfromoursupplychain,

andhelpourcustomerstoreducetheirfootprintstoo.

our commitments

Overview

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28/70

Our performance

Tescoisaglobalbusinessgrowingatasignificantrate.Businessgrowthiscompatiblewithtacklingclimatechangeprovideditislow-carbongrowth.Significantglobalcarbonreductionsareanurgentnecessity,andthefastestwaytoachievethemwillbebyreplacinghigh-carbonactivitieswithlower-carbonones.

Wearemakingprogressinbecomingalow-carbonenterprise.ThisyearTescowasnamedthetopretailerintheCarbonDisclosureProjects2010UKFTSE350andGlobal500reportsforourcarbonreportingandperformance.

Ourglobaldirectcarbonfootprintin2010/11was5.44milliontonnesofCO2e(seeboxonpage23fordetailsofhowwecalculateourcarbonfootprint).Thisyear,wecontinuedtodecoupleourbusinessgrowthfromthegrowthinourcarbonemissions:whileournetsalesareagrewby8.8%,ourcarbonfootprintincreasedbyonly2%.

Wehavemadeparticularprogressthisyearinreducingemissionsfromrefrigeration.IntheUKalone,wehavesavedaround165,000

tonnesofCO2ebyreducingleakageoffridgegas,whichhasaglobalwarmingeffectthousandsoftimesgreaterthanCO2.

In2009/10,ourUKbusinessrecordedanabsolutereductioninCO2eemissionsof1%(revisedfromthe2%statedinour2010reportseeboxonpage23fordetails),despitesignificantbusinessgrowth.Thisyear,thankstoarelentlessfocusonrefrigerantemissionsaswellasfurtherprogressonenergyefficiency,wehavereducedourabsoluteCO 2eemissionsintheUKby5%.


Getting to zero

Achievingourambitionofbecomingazero-carbonbusinessby2050willrequireustoreduceourabsolutecarbonemissionsacrosstheGroup.Weaimtoachievethisnotbypurchasingcarbonoffsetsbutbygeneratingourelectricityandheat/coolingfromrenewablesources.Ifthereareanyresidualemissionsthatwecannoteliminate,wewillgeneratemorerenewableenergythanweneedandpasstheexcesstoothers.

ASSURANCESUMMARSTATEMENT

EnvironmentalResourcesManagementLimited(ERM)hasprovidedindependentexternalassuranceofour2010/11globaldirectcarbonfootprintforthisreport.Hereistheirresponse:

WereviewedTescosapproachtomeasuringandreportingitsdirectcarbonemissionsatGrouplevelandinarepresentativesampleofmarkets(China,Ireland,theUKandtheUS).

WeconcludethatTescosglobaldirectcarbonfootprint(totaldirectcarbondioxideequivalentemissionsandpercentagebreakdownperemissionstype)isappropriatelystated.Forfurtherdetailsontheworkweundertookandourfindings,pleasereadourfullassurancestatementatwww.tescoplc.com/reporting.

Pleasenotethatthe2008Tescoaccountingyearwas53weekslongratherthantheusual52weeks.AsinCRreportsfor2008/9and2009/10,the2008figureshavebeenadjustedtoa52-weekyeartoallowlike-for-likecomparisonwithotheryears.

TOTALCARBONFOOTPRINTBSOURCE2010/11

1 Grid electricity 63.92%

2 Refrigerants 15.89%

3 iesel/oil 12.05%

4 atural gas/PG(including district heating) 7%

5 Business travel 1.14%12

3

4

5

total carbon footprint by market 2010/11

Country kgCO2e

China 357,835,896

CzechRepublic 206,063,393

Hungary 227,607,623

India 16,769,044

Ireland 224,158,169

Japan 30,079,003

Malaysia 166,494,221

Poland 410,182,360

Slovakia 77,781,743

SouthKorea 492,770,531

Thailand 533,940,207

Turkey 109,890,505

UnitedKingdom 2,486,454,492

UnitedStates 100,339,734




66%Ourhea

tingandcooling

systematRamse

yuses66%

lessenergythan

atypical

storeofasimilarsize.

Overview

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Health

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BUGS

ow-carbon stores

Since2005,wehavebeencuttingthecarbonfootprintofTescostoresacrosstheworld.Wehaveanambitiousprogrammeofcarbonreductioninournewandexistingstores,designinginfeaturessuchasincreasednaturaldaylighttoourstandardnewstores.Inourexistingestate,weareworkingtoreplaceoldequipmentwithnewtechnologytohelpourstaffcutcarbon(seebox).

Zero-carbon stores

Weopenedtheworldsfirstzero-carbonsupermarketinRamsey,Cambridgeshire,in2009.Thisyear,weopenedourfirstoverseaszero-carbonstoreinJaromer ,CzechRepublic,andcompletedtwomorezero-carbonstoresintheUK,inWelshpoolandBourne.Thesestoresallowustotestnewtechnologiesthatwecanrollouttofuturenewstores.

Ourzero-carbonstoresaredesignedtouseaslittleenergyaspossible.Forexample,ourheatingandcoolingsystematRamseyuses66%lessenergythanatypicalstoreofasimilarsize.

WegenerateourownenergyonsitefromaCombinedHeatandPower(CHP)system,whichusesasustainablebiofuelmadefromwastefishoiltogenerateheatandpower.

ExcesselectricitythatwegenerateisexportedtotheNationalGrid.

Ramseyissavingtheequivalentof2,000tonnesofCO2eperyear,comparedtoasimilarnewstore.

Wewillshortlyopenourfirstzero-carbonbuildingsinAsia.Ourfirstzero-carbonstoreinthecontinentwillopeninthesecondhalfof

2011inBangPhra,Thailand,andTescosLeadershipAcademyinSouthKorea,tobecompletedinJuly2011,willalsobezerocarbon.

atural refrigeration

Therefrigerantgasesusedinalmostallrefrigerationsystemsknownashydroflurocarbons(HFCs)canmakeaverysignificantcontributiontoclimatechange.Theycomprise16%ofTescosglobalcarbonfootprintandwearecommittedto

findingalternatives.Wehavealreadyinstallednon-HFCnaturalrefrigerationsystemsinHungaryandtheUK,andinourexistingstoresintheUKwehavereducedHFCemissionsby15%comparedto2009/10.WewillpilotanaturalrefrigerationsysteminTurkeyin2011/12.

InNovember2010,alongwithothermembersoftheConsumerGoodsForum,wepledgedtobeginphasingoutHFCrefrigerantsfrom2015,wherethisispermittedbylocalandnationalregulations,andworksintheclimateandwiththestoreformat.Weareactivelylookingatnon-HFCsystemsthatcouldalsoworkintropicalclimateslikeMalaysiaandThailand,andinsmallerformatandexistingstores.

Renewable energy

Eventhemostenergy-efficientbuildingsanddistributionsystemsneedtousesomeenergy.Generatingourownrenewableenergyisthereforeakeypartofourclimatechangestrategy,andwearetriallingseveraltechnologies,includingphotovoltaicroofpanelsandcladding,solarhotwatergeneration,CHPandgroundsourceheatpumps.

Thisyear,weinstalledfourwindturbinestopowerthreeUKdepotsusingrenewableenergy.Eachturbinewillproduceenoughenergytopower500homes,savingaround3,200tonnesofCO 2e.AnysurpluspowergeneratedwillbeexportedbacktotheNationalGrid.

In2007,weinstalledoneofCaliforniaslargestroof-mountedsolarinstallationsonourdistributioncentreinRiverside.Thisyear,the

installationgeneratedenoughenergytopowermorethan400homes.In2011/12,wewillinstallsolarpanelsontenofourstoresinArizona,whichwillgenerateabout20%oftheenergyusedin-store.

6m fewer milesThisyear,ourUKrailnetworksavedsixmillionroadmilesandover8,000tonnesofCO 2e.

53.26

2010/11

56.91

2009/10

59.64

2008/9

64.84

2007/8

65.10

2006/7

CARBONFOOTPRINTPERSQUAREFOOTkgCO2e/retailsellingspace

ENERGBOARDS

WeareinstallinginteractiveenergyboardsinourstoresintheUKandIreland.Theboardshaveaninteractivetouchscreen

toshowwherethestoreisusingenergyinrealtime,allowingstafftotakeaction.Theyareprojectedtosave15,000tonnesofCO2e,equatingtoacostsavingof2million,everyyear.

TheenergyboardswonBestEnergyReductionProjectoftheearattheEnergyEvent2010,andhelpedTescotowinthePlattsGlobalEnergyAwardforBestEnergyReductionProgramme.



31/70

TRASPORT

In2010/11,ourtotalcarbonfootprintfromtransportwas655,669tonnesofCO2e,12%ofourglobaldirectcarbonfootprint.Thisyear,wehavecontinuedtoreducecarbonemissionspercaseofgoodsdelivered.

Saving fuel

Despitesignificantbusinessgrowth,wehavenotincreasedthesizeofourUKdistributionfleetforfouryears.Wetrainourdriverstomakedrivingmoreeff icient,byacceleratingsmoothly,usingthehighestpossiblegear,andmaintainingaconstantspeed.WearenowreducingthemaximumspeedofourUKvehiclesto50mph.Thisisprojectedtoreduceourfuelconsumptionbyupto3%.

Thisyear,ourUKrailnetworksavedsixmillionroadmilesandover8,000tonnesofCO2e.Wealsocontinuedtoincreasethenumberofdouble-deckertrailersweusetodelivertostores,saving12.5millionroadmilesandnearly17,000tonnesofCO 2e.

ThankstoachangeinEUlegislationthisyear,wecannowbuytrailerswitha12%greatercapacity,allowingustodelivermoregoodsinfewerjourneys.WehavestartedtobuytheseintheCzechRepublic,HungaryandPoland.

WearecurrentlyrollingoutourtransportmanagementsysteminThailand,whereitisprojectedtosave8,600tonnesofCO2ein2011/12.Thissystemfindsthemosteff icientroutefordeliveringproductstostores,andhasalreadyhelpedusreducecarbonemissionsfromtransportinSlovakiaandtheUK.


etwork optimisation

Aswellassavingfuel,weareworkingtorelocateourdepotssothattheyareinthebestpossibleplaceforstoresintheirregion.Thisyear,networkoptimisationhassaved12millionroadmilesintheUK,andover16,000tonnesofCO 2e.

Manyofournon-UKbusinessesarestillgrowingtheirdistributionnetworks.Thisgivesustheopportunitytopositionourdepotsinthebestlocations,toachieveefficiencyindistributionandcarbon.

SUPP CHA

In2009,wesetourselvestheambitioustargetofreducingcarbonemissionsinoursupplychainby30%by2020.Thecarbonemittedingrowing,manufacturing,processingandtransportingtheproductsweselladdsuptoaroundtentimesourdirectcarbonfootprint.Andweknowthatreducingemissionsbyconservingresourcesinoursupplychaincanpaybigdividendsonotherpriorities,suchasendingdeforestation,reducingwasteandusingwatermoreeffectively.

Withhundredsofsuppliersinmanycountries,manywithexpertiseindifferentaspectsofsustainability,thebestwaytomakeprogressistoshareknowledgethroughoursupplychains,acrosstheindustry,andacrossnationalboundaries.Thisyear,weaskedthesupplierstoourUKmarkettocompletequestionnairesontheircarbonreduction,water-saving,andwasteandpackagingreductionprojects.

Sharing knowledge

Toshareknowledgeandexpertisemorewidelyacrossoursupplychain,wehavesetupaKnowledgeHub,anelectronicspacetosharebestpracticewithoursuppliersonadailybasistohelpthemgaintheconfidencetheyneedtoinvestincarbonreduction.Wecurrentlyhaveover150membersofourKnowledgeHub,

andaimtoincreasethisto300in2011/12.

Piloting carbon reduction projects

Wearemappingthebiggestopportunitiestocutcarboninthesupplychainourcarbonhotspotsandwillusethisinformationtodrivecollaborativeprojectswithoursupplierstoreduceemissions.Wearedevelopinganimprovedcarbondatamanagementsolution,whichwillhelpustoaccelerateourcarbonfootprinting.

Wearepilotingthisapproachinthreehigh-volumecategoriesintheUKmilk,bakedbeansandwine.Aswelearnmore,wewillextendtheprogrammetomoresectors.

OurmilkpilotusesresearchbytheTescoDairyCentreofExcellenceattheUniversityofLiverpool,whereresearchershavebeen

monitoringwhethergivingcowsdifferentfoodwillimprovetheirdigestionandreducemethaneemissions.In2011/12,wewillgetcarbonfootprintsofmanyofthefarmsthatproducethemilkwesell.FarmerswillthenbeabletocomparetheirperformancewithotherTescodairyfarmers.Wewillalsousethisinformationtogivefarmersabestpracticeguidewithpracticalideasabouthowtoreducecarbonemissions,frommanuremanagementtoinvestinginrenewables.

LOW-CARBONDEPOTS

WehaveopenedourfirstdepottobepoweredentirelybyrenewableenergyinWidnes,UK.Thedepotisnotconnected

totheNationalGrid,butinsteadissuppliedwithheatandelectricitythroughapartnershipwithlogisticscompanyStobartandrecyclerPDM.Eachyear,PDMsCHPplantwillturn230,000tonnesoffoodwastefromfoodretailersincludingTescointorenewableheatandelectricity,saving7,000tonnesofCO 2e.

OurDaventrydepot,duetoopeninMay2011,hasdirectrailfreightaccessforuptoeighttrainsperday,whichisprojectedtosavenearly20,000tonnesofCO 2eperyear.

June2011willseetheofficialopeningofourlow-carbondepotinJiashan,China.Thebuildingwillusearound30%lessenergythanadepotbuiltin2006,throughbetteruseofnaturallightandrenewableenergytechnologiessuchasgroundsourceheatpumps.

0.141

2010/11

0.150

2009/10

0.156

2008/9

0.162

2007/8

0.177

2006/7

CARBONFOOTPRINTPERCASEOFGOODSDELIVEREDkgCO2e/case

Overview

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Health

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ncentivising green behaviour

IntheUK,wegiveoutoveronebilliongreenClubcardpoints,worthover10million,everyyeartocustomerswhorecyclealuminiumcansatourautomatedrecyclingmachines,recycle

printercartridgesandmobilephones,choosebaglesshomedelivery,buyhomeinsulationorreusecarrierbags.

Thisyear,welaunchedgreenClubcardpointsinPolandtoaddtoexistingschemesinMalaysia,SouthKorea,ThailandandtheUK.In2011/12,weplantolaunchtheschemeinChina,HungaryandTurkey.

Carbon labelling

Carbonfootprintingourproductsgivesusvaluablenewinformationaboutwhereemissionsareconcentratedinthesupplychain,andwheretherearegoodopportunitiestoreducethoseemissions.SinceJanuary2008wehavecarbonfootprinted1,100productsintheUK.

Wewanttoencouragecustomerstoconsidertheenvironmentalimpactoftheproductstheybuy.WehavethereforeworkedwiththeCarbonTrustandotherstakeholderstodevelopauniversalcarbonfootprintlabelthatdescribestheemissionsassociatedwitheachproduct.SinceJanuary2008wehavecarbonlabelled525everydayproductsintheUK.

CUSTOERS

Climatechangewillonlybetackledsuccessfullyifpeoplebecomechampionsofalow-carbonlifestyle.Ourroleistoshowcustomersthatlivinggreenerlivescanbeattractiveandaffordable.IntheUKweknowthatourcustomerscarbonfootprintisaround100timesgreaterthanTescosdirectcarbonfootprint,sowehavearealopportunitytotackleclimatechangebymobilisingourcustomerstomakesmallchangesthatadduptoabigdifference.

In2009wemadeacommitmenttohelpourcustomershalvetheircarbonfootprintsby2020.WehavecarriedoutcustomerresearchineveryTescomarkettoidentifythekeybarriersandactionsneededtohelpcustomersreducetheircarbonfootprints.Price,information,practicalbarriersandasenseofdisempowermentarecommonthemes.Everymarkethasproducedaroadmapoutliningmeasuresplannedtohelpcustomerscutcarbon.

InMalaysia,PolandandSouthKorea,weinvolvechildreningreen

educationalprogrammesandrunenvironmentalcompetitions.OurTomorrowsFootprinteducationalprogrammeinTurkeyhelpschildrenunderstandtheimpactofclimatechange,andhassofarreachedatotalof24,000children.InChina,weareintroducinggreenshuttlebusesandelectriccarchargingpointsatstores.Moreinformationoninitiativesindifferentmarketscanbefoundatwww.tescoplc.com/countries.

1.3bnIntheUK,carbon-labelledproductsaccountfor1.3billionofsaleseachyear.Wehavealsolabelled33productsin

SouthKorea.

SinceJanuary2008,wehavecarbonlabelled525everydayproductsintheUK

Carbon-labelledproductsaccountfor1.3billionofsaleseachyear.InJanuary201159%ofUKcustomersboughtatleastone

carbon-labelledproduct

Carbonlabelsgiveacomparisonwithasimilarproduct,allowingcustomerstomakeagreenerchoice.Manyalsogiveadviceonhowcustomerscanreducethecarbonfootprintoftheproductforexample,bywashingclothesatalowertemperature

WearealsogrowingourcarbonlabellingprogrammeinSouthKorea,andhavenowlabelledatotalof33products

Carbon labelling




Greener products and advice

Thisyear,welaunchedourGreenThingsrangeofenvironmentallyfriendlyhouseholdproductsintheUS,whichisprovingpopularwithcustomers.

IntheUK,ourGreenerLivingproductshelpourcustomersmake

greenerchoices,andtheGreenerLivingwebsiteprovidesadviceonhowcustomerscancuttheircarbonfootprint.37%ofvisitorstothewebsitesaytheyhavechangedtheirbehaviourasaresult,and28%saytheyhavepurchasedagreenproductaftervisitingthesite.

In2011/12,weplantolaunchorexpandgreenwebsitesinourCentralEuropeanmarketstoraiseawarenessandhelpcustomerssavemoneyatthesametime.

ow-carbon services

In2010,welaunchedatotalHomeEfficiencyServiceintheUK,offeringcustomersinsulationandsolarenergyproducts,aswellasinformationaboutplanningissuesandgovernmentfunding.Thishashelpedcustomerssavealmost400,000tonnesofcarbon.

AspartofaUKGovernmentscheme,wehavealsoinstalledmorethan6,000freeinsulationupgradesforsomeofourmostvulnerablecustomers,helpingthemtostaywarmandreducetheirenergybills.Formoreinformationseewww.tesco.com/homeefficiency.

Engaging our staff

Wehavein-storeEnergyChampionsintheCzechRepublic,Hungary,Ireland,Malaysia,Poland,Slovakia,SouthKorea,Thailand,TurkeyandtheUK.Theirroleistofindwaystosave

energyinourstores,andhelptheircolleaguesunderstandtheneedtosaveenergy.

Inautumn2010,werecruitedover70GreenChampionsfromacrossourUKbusiness.Championscomefromalllevelsandfunctionsofthebusiness.TheirroleistoactascatalystsforgreenactivityacrossTesco,andwesupportthemwithregulartrainingsessionsandanonlinenetworkingtool,allowingthemtosharetheirplansandexperiences.

37%ofvisitorstotheGreeneriving

websitesaytheyhavechangedtheir

behaviourasaresult,

and28%saytheyhavepurchasedagreenproductaftervisitingthesite.

CLIMATEWEEK

InMarch2011TescowastheheadlinepartneroftheUKsfirsteverClimateWeek.Thisnationaleventhighlightedthemanypositivestepsthatarealreadybeingtakeninworkplacesandcommunitiestocombatclimatechange.WesupportedClimate

Weekinourstores,throughourproducts,inourpublicationsandwithstaff.TheeventwassupportedandendorsedbyUKPrimeMinister,DavidCameron,formerUNDirectorGeneral,KofiAnnanandformerUSVicePresident,AlGore.

SUSTAINABLECONSUMPTIONINSTITUTE

In2007,Tescocommitted25milliontocreateanewSustainableConsumptionInstitution(SCI)attheUniversityofManchester.TheSCIisamultidisciplinarycentreofglobalexcellence,researchingmajornationalandinternationalissuesassociatedwithsustainabilityandencouragingconsumerstoadoptmoresustainablelifestyles.Amongitsflagshipprojects,theSCIisfocusingonunderstandingconsumerbehaviour,andidentifyingnewtechnologiesandinnovationsacrossthesupplychain.Formoreinformation,seewww.sci.manchester.ac.uk.

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Packaging

Packagingcanappeartobeoneofthebiggestenvironmentalissues.However,packagingprotectstheproductswesell,helpingtoreducefoodwasteandthereforecarbonemissions.

Independentresearchshowsthat,indevelopingcountries,thelackofpackagingorinadequatepackagingcausesuptohalfofallfoodtodecaybeforeitreachestheconsumer,leadingtomorewaste.IntheUK,withmoreefficientpackaging,thefigureisonly3%.

Nevertheless,wearecommittedtoreducingpackagingwherewecandosowithoutcompromisingitsroleinprotectingandpreservingtheproduct.Ourpolicyisbasedonfivekeyprinciples.Packagingshould:

befitforpurpose;

usethelightestweightmaterials;

usematerialsfromthemostsustainablesources;

maximiseopportunitiesforrecyclingandrecovery;and

bedesignedtohavethelowestcarbonimpactkeepinginmindtheproductandvaluechain.

Wehavealreadyreducedpackagingonourown-brandproductsintheUKbymorethan15%since2007.

IntheUK,TescoisasignatorytoWRAPs(WasteandResourcesActionProgramme)Courtauld2,anindustry-widecommitmenttoreducepackagingandwasteby2012,againstabaselineof2009.Wehavecommittedto:

reducetheweight,increaserecyclingratesandincreasetherecycledcontentofgrocerypackaging,loweringitscarbonimpactby10%;

reduceUKhouseholdfoodanddrinkwasteby4%;and

reduceproductandpackagingwasteinthesupplychainby5%.

WehavealsosignedavoluntaryagreementthroughtheindustrybodyIGDtoplayourpartinanindustrytargettorecycle150,000tonnesandeliminate75,000tonnesofwastebytheendof2012,againstabaselineof2009.

WASTE, RECCG A PACKAGG

Waste

ReducingwasteisapriorityforTesco.Balancingtheneedtoensurestapleproductsarealwaysavailabletocustomersagainsttheneedtominimisewasteisanormalpartofstoremanagement.Eachofourbusinesseshasitsowntargetstoreducewasteandimproverecycling,workingwithinthelimitsoflocalinfrastructure.EveryTescostoreintheUKhaswastetargetsthatarereportedonaweeklybasis.

Since2009wehavesentnowastefromourUKstoresdirectlytolandfilltheonlymajorUKretailertodoso.Ifwastecannotberecycled,wemakesurethat,wherepossible,itisusedtomakealternativesourcesofenergy.

Recycling

InChinaweachievedourtargetforcardboardrecycling,andourperformanceforvegetableoilandfreshwasteimproved.

WehaveplanstooperateaRecyclingServiceUnitintheCzechRepublicandcentralisedwasterecyclingthroughdistributioncentresinSlovakia.

InIrelandweheldWasteElectricalandElectronicEquipmentCollectionDaysat28stores,allowingcustomerstobringbacktheiroldelectricalappliancesforrecycling.Werecycledatotalof286tonnesofelectricalwaste,theequivalentof19,000televisionsor150,000hairdryers.

InTurkeysomenewstoresarebeingservedbyanewwastecontractor,whichhelpedusexceedourrecyclingtarget.Werecyclepaper,nylon,certainplasticsandtin,asregulationrequiresustogiveotherplasticsandcardboardtospecialisedcompaniesforfree.

IntheUKwerecycleallourcardboard,metal,officepaper,plastic,chickenfatandcookingoil.WearethelargestretailrecyclerofcardboardintheUK,processingnearly300,000tonnesayear.Thecardboardwerecycleismadeintonewpackaging,aprocessthattakesjust14days.Werecyclearound22,000tonnesofplasticayear,oftenturningitintobinliners.

In2010werolledoutbatteryrecyclingpointstoallourUKstores.Thesehaveprovedpopularandourcustomershaverecycled228tonnesofbatteriesthisyear.WealsoinstalledinnovativenewinformationscreensonourUKautomatedrecyclingmachines,whichcommunicatehowmuchCO 2isbeingsavedbyrecycling.

300,000WearethelargestretailrecyclerofcardboardintheUK,processingnearly300,000tonnesayear.

HANGERRECCLING

Since2009,wehaveprevented1,600tonnesofplasticgoingtolandfillthroughourUKhangerrecyclingprogramme.Customersleavetheirhangersatthecheckout,andtheyareeitherreused

orrecycled.From2011/12onwards,weaimtoprevent5,000tonnesofplasticgoingtolandfilleachyear.



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South Korea

Japan

76,000placesintheeParanGreenLeadersProgramme

Reducedcarrierbaguseby20%

Achieved we provided over 90,000places this year

ot achieved a Tesco Japan customernow uses around 10% fewer carrier bagsthan in 2009

reland 100%ofwastedivertedfromlandfillby2011 ot achieved at the end of 2010/11,90% of waste was diverted from landfill.We have sent no waste from our UKstores directly to landfill since 2009

UK Increasenumberofproductswithcarbonlabelto500andincreasecustomerawarenessofthelabel

Achieved since January 2008, we havecarbon labelled 525 products. 24% ofTesco customers have seen the label

on a product, rising to 30% among16-24-year-olds

UK Reducecarrierbaguseby70%byendof2010(comparedto2006)

ot achieved a Tesco UK customernow uses around 60% fewer carrier bagsthan in 2006. For more details, see ww w.tescoplc.com/carrierbags

Turkey Runeducationprogrammeonclimatechangefor12,000children Achieved over 13,000 children havebeen educated on the impact of climatechange this year, bringing the totalto 24,000

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Providing

customerswithhealthy

choices



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Helping our customers

eat well and get active

We want to help our staff and customers

to lead healthy lives.

As a global business, we know that healthylives means different things in our different

markets. We aim to work with our industry

partners, academic and technical experts,and governments to understand and help

tackle key public health issues for example,

food safety, obesity and alcohol misuse.

Ourfirstpriorityistoprovidesafe,goodvaluefoodforourcustomers.Thisismorechallenginginsomemarketsthaninothers,andwearecommittedtoupholdinghighstandardsoffoodsafetyacrosstheworld.

Wehaveaclearroletoplayinmakinghigh-qualityfoodsaffordabletoeveryone,andingivingcustomerstheinformationtheyneedtomakehealthyfoodchoices.Wecanalsouseourtrustedbrandtoencourageourstaffandcustomersacrosstheworldtoadopthealthy,activelifestyles.

ForTesco,providingcustomerswithhealthychoicesmeans:

makinghealthyoptionsaccessibletoeveryonethroughpriceandpromotions,healthyranges,andbyreformulatingourproducts;

providingthebestinformationonthenutritionalvalueofourproducts,andonhowourstaffandcustomerscanlivehealthylives;and

makingitmoreattractivetoleadanactivelifestyle.


4.2 millionPeoplegotactiveinThailandthroughaerobics,walkingandfootball

18,000ChildrenwhoparticipatedintheTescoBankFootballchallenge

33mAnnualsalesvalueoftheTescoFreeFromrangeintheUK

1 millionSchoolchildrenwhotookpartintheUKsGreatSchoolRun

3,600Productsreformulatedsince2005intheUKtoreducetheirsalt,sugaror

saturatedfatcontent

2010/11 in numbers



HEATH OPTOS

Food safety

Basicfoodsafetyremainsaprimaryconcernforcustomersinsomeofourmarkets.Here,wecanplayanimportantroleinspreadingbestpracticeandimprovingstandards.

Forexample,thereisanenormouslevelofinterestinfoodsafetyinChina.TescoissupportingtheChineseGovernmentasitcodifiestherulesonfoodsafety.Atthesametime,wearesupportingtheChineseauthoritiesinbuildingcapabilitywithinthesupplychain,sharingourknowledgeonfoodsafetyinstorageanddistribution.

Healthy eating brands

Ourhealthyeatingbrandscontainnutritionallybalancedproductswithcontrolledamountsoffats,sugarandsalt.Weoffertheminsevenmarkets.Forexample,ourEatWellrangeintheUSfeaturesreducedcalories,fat,saturatedfatandsalt.

Thisyear,werebrandedtheUKrangeandintroducedanewwavelogoatthetopofpacks,helpingcustomersfindhealthieroptions

moreeasily.WehaveaLightChoicesrangeofproductsintheUK,allofwhichhavelessthan3%fatoratleast30%lessfat(or30%fewercalories)thantheequivalentTescostandardproduct.

Changing the formula

Wehavebeencuttinglevelsofsalt,sugarandsaturatedfatacrossourrangessince2005,andsincethenhavereformulatedover3,600UKproductstoimprovetheirnutritionalcontent600thisyearalone.

IntheUKandUS,allourown-brandproductscontainnoartif icialtransfatsandnoartificialcoloursorflavours.

Wecontinuetoleadonreformulation:forexample,in2010,theUKFoodStandardsAgencysetatargetforsaltreductioninready

meals.TheaverageTescoreadymealalreadycontained10%lesssaltthanthetarget.IntheUS,wehaveremovedhigh-fructosecornsyrupfromallFresh&Easyproducts.

Ineverymarketinwhichweoperate,weworkwithgovernmentstohelpthemachievetheirhealthtargets.WearecurrentlyworkingwiththeUKGovernmentonitsPublicHealthResponsibilityDeal(seebox).

BETTER FORATO

utrition labelling

Allofoureligibleown-brandfoodlinesacrosstheglobehavenutritionlabelling.Theonlyexceptionsarefoodcookedin-store

andproductswhereitwouldbeimpracticaltoaddalabel,suchasherbsandspices.OurnutritionlabellingusesGuidelineDailyAmounts(GDA)andtellscustomershowmanycaloriesandhowmuchsugar,fat,saturatesandsalttheywilleatinoneserving,alongwiththepercentageGDAforatypicaladult.

In2005,TescowasthefirstUKretailertoputnutritioninformationonthefrontoffoodpacks.Thisyear,afterasuccessfultrialinourstaffrestaurants,weintroducednutritionlabellingonthefoodweserveinourUKin-storecafes.Formoreinformation,seewww.tescoplc.com/labelling.

TheUKGovernmentrecommendsthatpeopleconsumefiveindividualportionsoffruitorvegetableseveryday.Wecommunicatethistocustomersthrough5-a-daylabelson

appropriateproducts.The5-a-daymessageisnowwellknownintheUK,butnotinothermarkets.In2011,wewillrollout5-a-daylabellinginChina.

IntheUK,weareworkingwiththeindustrybodyIGDtoencouragetheDepartmentofHealthtoincludecompositefoodsinthe5-a-dayscheme,helpingpeopleeatmorefruitandvegetables.Currently,theofficial5-a-daybrandingonlyappliestofruitandvegetableswherenosaltorsugarhasbeenadded.Thismeansthatifacustomerservesaportionofpeasalongsideoneofourreadymeals,forexample,itwouldcounttowardstheir5-a-day.Butifweaddedthepeastothemeal,itwouldntcount,evenwhenthemealitselfisahealthyoption.WeareworkingwiththeDepartmentofHealthandcolleaguesinindustrytofindasolution.

Wehaveaclearroletoplayinmakinghigh-qualityfoodsaffordabletoeveryone,andingiving customers

theinformation they

need tomakehealthy

food choices.

QUANTITNOTQUALIT

Researchshowsthatpeopletendtoeatbyvolumefillingtheirplatesorbowlsratherthanbythecalorificcontentoftheirmeal.Soreducingthecaloriecontentoffoodcan,insomecases,bemoresuccessfulthanencouragingpeoplesimplyto

eatless.TescoisworkingoncaloriereductionaspartoftheUKGovernmentsPublicHealthResponsibilityDeal,wherewearelookingatwaystohelpcustomersreducetheircalorieintakeforexample,byreducingthesugarcontentoffullsugarsoftdrinks.Thisyear,weremoved430tonnesofsugarfromourcarbonateddrinksandsquashes,equivalenttoa4%reductionacrosstherange.

FREEFROM

In2003,TescowasthefirstUKretailertolaunchanown-brandrangeforcustomerssufferingfromallergiesorintolerancestowheat,glutenand/ormilk.TheTescoFreeFromrangeisnowwortharound33millioneachyear,andresearchtellsusthatprovidingtherangehasapositiveimpactoncustomerloyalty.WeworkcloselywithCoeliacUK,theleadingcharityforpeoplewithcoeliacdisease,tounderstandtheneedsofthosewithglutenintolerance.

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7.1mraisedbystafftakingpartinorsupportingourracessince200

2

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China 36,000

Czech Republic 9,400

Hungary 6,100

alaysia 16,600

Poland 5,100

Slovakia 8,300

South Korea 378,000

Thailand 4.2 million

Turkey 29,000

UK 2.55 million


Canoeing

WeareproudtobehelpingprepareBritishathletesforthe2012OlympicGames,bybecomingtheGoldsponsorofGBCanoeinginpartnershipwiththeBritishCanoeUnion.GBCanoeingis

dedicatedtosupportingthemosttalentedathletesintheOlympicdisciplinesofCanoeSlalomandCanoeSprintRacing,andwereparticularlypleasedtosupporttheirtrainingattheOlympicslalomcoursenearourCheshuntHeadOffice.

Football

Footballcontinuestobeanextraordinarilypopularandeffectivewayofengagingwithchildrenacrossmanyofourmarkets.

WorkingwiththeEnglishFootballAssociation,wefund106coachesthroughouttheUK,whoteachfootballskillstoboysandgirlsaged511.TheFATescoSkillsprogrammeformstheFAscentralstrategyforencouragingchildrentoplayfootballandbuildingthefuturehealthofthegame.Thisyear,weprovidedover740,000placesontheprogramme.

WealsoworkwithEvertonFootballClubandtheShanghaiDisabledPersonsFederationtohelpchildrenwithdisabilitieslearnfootballskills.Inthelastthreeyearsnearly1,500disabledchildrenhavereceivedfootballtraining.Thisyear,weranfootballsummercampsinBeijing,Guangzhou,Shanghai,TaizhouandTianjin.

InApril2011,wewilllaunchtheeParanouthFootballClubinSouthKorea.Theclubwilloperateontwolevels:elite,ateam

of30speciallyselectedchildrengivenprofessionalcoaching,andhobby,aweeklyfootballclassforchildrenatallskilllevels.

TESCOBANKFOOTBALLCHALLENGE

InJanuary2010,TescoBankinvested1millioninanewfootballprogrammeforchildreninScotland,inpartnershipwiththeScottishFootballAssociation.Overfouryears,theTescoBankFootballChallengeaimstoreachover70,000boysandgirlsinatleast1,600primaryschoolsacrossthecountry.Thisyear,18,000childrenhaveparticipatedintheprogramme,andfeedbackhasbeenoverwhelminglypositive,frompupilsandteachersalike.

nJanuary2010,TescoBankinvested1millioninanewfootballprogrammeforchildreninScotland,inpartnershipwiththeScottishFootballAssociation.

GETTINGACTIVEWITHTESCO

Total number of people getting active with Tesco:

over 7 million



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China Rollouttechnicalsupportforsupplierstoimprovefoodsafetyandquality

Achieved we rolled out technicalsupport for suppliers to improvefood safety and quality of own-brandproducts

alaysia Launch50LiteChoiceslines Partially achieved we have launched24 ite Choices lines in-store

UK ExpandFATescoSkillsprogrammeto4.5millionplacesby2014 Achieved for 2010/11 we providedover 740,000 places on the programmethis year

Hungary LaunchaGDAeducationprogrammeincludingatoolkitforstudents ot achieved we have instead focusedon developing healthier products forour customers


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Activelysupportinglocalcommunities

64.3mdonatedtocharitiesandgoodcauses



Overview

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aking a positive

contribution in ourneighbourhoods

We want to be a good neighbour in all the

communities in which we operate. This means

being in tune with the needs and values of

local communities, engaging positively onthe issues that matter to them, and making

lasting contributions that improve localareas. By doing this, we ensure we are true

to our values, and help build our customers

lifetime loyalty.

ThereisadebateintheUKandelsewhereaboutthetaxcontributionofinternationalbusinesses.Thisyear,Tescopaid1.5billionintaxesintheUK,includingcorporationtax,businessratesandemployersNationalInsurancecontributions.AccordingtoarecentsurveyconductedbyPricewaterhouseCoopersonthe

totaltaxcontributionofTheHundredGroup(whichrepresentsthefinancedirectorsoftheUKslargestcompanies),TescowasthehighestrankedcompanyintheUKfortotaltaxespaid.

Ourmostvisiblecontributiontocommunitiesisdeliveredthroughourshops.Weregularlyopenstoresinareaswhichotherbusinesses,includingretailers,haveabandonedorneglected.Thesestoresprovideaccesstoqualityfreshfoodataffordablepricesincommunitiesthatareoftenotherwiseisolated.Theyalsobringmuch-neededjobsandresultingincometothelocalarea.WeareparticularlyproudofourRegenerationPartnershipprogrammeintheUK.

Ourstoresareoftenafocalpointofthelocalcommunity,aplacewherepeoplemeetandinteract.Wewanttoensurethatweunderstandandcanservetheneedsofourcommunities.Forexample,morethan20languagesarespokenbystaffatourCheethamHillstoreintheUK,improvingourabilitytoserveourcustomers.

Butbeyondthis,ourstaffandourcustomerslooktoustogetbehindlocalcauses,whetherthatmeansprovidingfundsforalocalcharity,givingvisibilitytoalocalcampaign,orprovidingopportunitiesforourcustomersandstafftohelponlocalissues.


10mRaisedbycustomersandstaffforcharitiesandgoodcausesinadditiontothe64.3mdonatedbyTesco

50,000PeopletakingclassesatourFamilyClubsinTurkey

700,000OnlinevotesreceivedforenvironmentalfilmsmadebystudentsinPoland

5.7 millionTreesplantedinThailandbyTescocustomerssince2007

10,000+NewvolunteersrecruitedatCommunityFairsin

theUK

2010/11 in numbers


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Community Champions

Ourin-storeCommunityChampionshelpuscommunicateeffectivelywithlocalcommunities.Bygivingouremployeesthetimeandtoolstoworkwiththeirneighbourhood,wemake

arealdifference.CommunityChampionsarepaidtospend18hoursaweekworkingwiththeirlocalcommunity.Forexample:

givingstoretourstolocalschoolchildrenorgoingintothelocalprimaryschooltotalkabouthealthyeating;

organisingcollectionsorbagpackingforalocalcharity;

meetingthefireserviceorlocalcharitiestofindouthowwecanhelpthem;or

gettingourstaffandcustomersinvolvedineventssuchasRaceforLife.

Wehave669CommunityChampionsineightmarketsacrosstheGroup(China,theCzechRepublic,Hungary,Ireland,Malaysia,

Slovakia,SouthKoreaandtheUK).WewillberollingoutCommunityChampionsacrossourstoresinTurkeynextyear.

COUT TATES

Wehavemanyotherinitiativestoengagewithlocalcommunitiestohelpcharities,improveeducationorprotecttheenvironment.

IntheCzechRepublic,ourTescoFoundationsupportslocalNGOsworkinginhealthandsocialcare.In2010/11,CZK700,000(23,700)wassharedbetween21charitiesprovidingequipmentfordisabledpeople,computerprogrammesforblindchildren,andtutoringforchildrenoffamiliesonlowincomes.

InIndia,wehavefundedqualityeducationforpeopleonlow

incomeswiththeParikrmaFoundationsince2007.

InPoland,ourTescoforSchoolsinitiativeranagreeneducationcompetitionforstudentstomakeanenvironmentalfilm.Over600filmsweresubmitted,andalmost700,000onlinevoteswerecastforthebestfilm.The30winningfilm-makersreceivedhigh-techequipmentfortheirschool,and300studentswonanindividualaward.

AlsoinPoland,weheld804store-basedcommunityeventsinsupportoffloodvictims,aswellasrunningablooddonationprogramme.

PROFILE:SHIRLEHAES,COMMUNITCHAMPION,RICHMOND,NORTHORKSHIRE

Withalonghistoryofvolunteeringandapreviousjobasatutor

incitizenship,itsnowonderthatShirley,a43-year-oldmumoftwinboys,jumpedatthechancetobecomeaTescoCommunityChampion.

Ilovemixingwithpeopleandgettingoutintothecommunity,soIknewthisrolewasmadeforme!saysShirley.Ialsothinkcommunityworkisgreatforteam-buildingandboostingmorale,andIknowhowimportantthatisforpeopleworkinginthesedifficulteconomictimes.

Shirleyisagiftedartist,andoftendrawsonhercreativeskillstoreachouttoschoolchildren,staffandcustomers.Shehashelpedchildreninseverallocalschoolstocreatecollagesoutofrecycledmaterials,gettingthemexcitedaboutrecycling.Shirleyalsogivesgreenstoretours,showingcustomershowTescois

reducingenergythroughnewtechnologies,andgivingtipsonhowtheycancuttheirowncarbonfootprints.

Shirleyisanavidfundraiser,andhascollectedforanumberofdifferentcharities,includingHelpforHeroesandTheCancerTrust.Shesays,IlikemakingadifferenceandsupportinglocalcharitiesthatreallybenefitfrommyhelpandtimeIcangivethem.IfeellikeImthefriendlyfaceofabigorganisation.

600+Farmersandfoodproducerswehaveassistedinimprovingtheirbusinessplanningandmarketingthrough

dunnhumbyspartnershipwithKentBusinessSchool.




BUONE,GIVEONE

In2009,welaunchedBuyOne,GiveOne,inwhichtheUKbusinessdonatedaschooluniformtoachildinKenyaforeveryuniformboughtbyourcustomers.12,000childrenreceivednewschooluniformsthroughthescheme.ThisyearweworkedwithSavetheChildrentoexpandtheschemetoBangladeshandSriLanka.Todate,wehavedonated96,000schooluniforms,allowingmorechildrenaccesstoeducation.

InSouthKorea,werun107SchoolsofExtendedEducation,wherechildrencancomeforextracoursesafterschool.Thisyearweprovidedover940,000placesandranover500environment-relatedprogrammes,includingcoursesinrenewableenergy,climatechangeandecosystems.In2011,wewillstartcoursesinmusic,artandEnglishforchildrenoffamiliesonlowincomes.

AlsoinSouthKorea,nearly40,000childrentookpartinourenvironmentalpaintingcompetition,andthewinnersrepresentedtheircountryintheglobalUNEnvironmentPaintingCompetition.

InThailand,aspartofourPlantninemilliontreescampaign,weplanted950,000treesthisyear,bringingthetotalto5.7millionsince2007.

AlsoinThailand,weachievedourOnemillionhoursvolunteeringtarget,whichhasreinforcedourreputationastheretailermostsupportiveoflocalcommunities.

InTurkey,wearetheonlyretailertorunFamilyClubs,where50,000peopletakeclassesintopicsincludingEnglish,Pilates,

chessandsalsa. IntheUKweextendedourCommunityFairsinitiativeto100stores,helpingthousandsoflocalcharitiesandsupplierstoshowcasetheirwork,andrecruitingover10,000volunteers.

Formoreinformation,seewww.tescoplc.com/countries.

Supporting communities in our supply chain

Wearealsoactiveinthecommunitiesthatsupplytheproductswesell.

InSriLanka,wehavebeenworkingtobringtogethercommunitiestornapartbywar.Wearenowthelargestcustomerofthelocalclothingfactory,accountingfor80%oforders.

InpartnershipwithKentBusinessSchool,dunnhumby(ourconsumerresearchbusiness)providescustomerinsightfreeofchargetofarmersandsmallfoodproducersallovertheUK.Overthepastfiveyears,wehavehelpedover600farmersandfoodproducerstoimprovetheirbusinessplanningandmarketing.

CHARTABE GG

Acrosstheglobe,ourstaffandcustomershelpedusraise10millionforcharitythisyear,exceedingourtargetof7million.Thesefundsprovidevaluablesupporttolocal,nationalandinternationalcharities,helpingthemtodevelopnewprogrammesandsupportthoseinneed.

Formoreinformationseewww.tescoplc.com/giving.

Corporate giving

Eachyear,wesetourselvesatargettodonateatleast1%ofourpre-taxprofitstocharitiesandgoodcauses.Thisyearwedonated64.3milliontocharitiesandgoodcausesthroughdirectdonations,cause-relatedmarketing,giftsinkind,stafftimeandmanagementcosts.Thisrepresents1.8%ofourpre-taxprofitsalmostdoubleourtarget.

Emergency relief and humanitarian aid

Weworkhardtorespondquicklytonaturaldisasterswherevertheyhappen.OurpartnershipwiththeRedCrosshashelpedustogetfundstothoseinacuteneed.Thisyear,ouremergencygivingincludeddonationstohelpthevictimsoffloodsinCentralEuropeandtheQinghaiearthquakeinChina,aswellasfloodsinIndonesia,Malaysia,ThailandandVietnam.

WewereoneofthefirstbusinessestorespondtothedevastatingearthquakeandtsunamiinJapaninMarch2011.Wemadeacorporatedonationof50,000asaGroup,andallowedourUKcustomerstodonatetheirClubcardvoucherstotheappeal.OurJapanesebusinessworkedwiththeRedCrosstoenablecustomersinTokyotodonatein-store,andmatchedstaffandcustomerdonationsuntiltheendofApril2011.

Charity of the ear

WerunCharityoftheearcampaignsinfivemarkets.Ineach

market,weselectacharitythatrepresentsacauseourstaffandcustomerscareabout,andthatcanmakeadifferenceontheground.Thisyear,wesupportedthefollowingCharitiesoftheear:

IrelandTheIrishCancerSociety(www.cancer.ie).Weraised950,000(805,000)in2010/11,whichhelpedtofundCaretoDrive,thecharitysnationalvolunteerdrivingserviceforcancerpatients.

JapanTheMake-A-WishFoundation(www.mawj.org).Thefundsweraisedhelpedtograntthewishesofchildrenwithlife-threateningmedicalconditions.

MalaysiaRumahNurSalam(http://nursalamchowkit.blogspot.com).ThemoneyraisedbyTescostaffandcustomersfundsthe

runningcostsofa24-hourshelterandactivitycentrethatprovidesasafeenvironmentforhomelesschildreninKualaLumpur.

PolandTheHappyKidsFoundation(http://www.tesco.pl/spolecznosci-lokalne/tesco-dzieciom.php).ThemoneyweraisedthisyearhashelpedthecharitytoopenanewfosterhomeforsevenchildreninWieruszw,andalsosupportstherunningoffiveotherfosterhomes.

UKCLICSargent(www.clicsargent.org.uk).Weraised7.2millionin2010/11.ThemoneywasusedtofundCLICnurses,whohelpchildrenwithcancerspendmoretimeathomeandlesstimeinhospital.

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ThroughTescoforSchools&Clubs,UKcustomerscancollectandredeemvouchersforequipmentforschools.Thisyear,wedonated9.3millionofequipmentto41,000schoolsandclubs,bringingthetotaltomorethan170millioninthelast20years.

Formoreinformation,seewww.tescoforschoolsandclubs.com.

Customerstoldustheywouldliketoparticipateinthescheme,butcurrentlydonotbecausetheyhavenodirectlinkwithaschoolorclub.In2011/12,wewillintroduceboxesin-storeforcustomerstodeposittheirvouchers,allowingthemtochoosefromseverallocalschoolsandclubs.

IntheUS,weranourShopforSchoolsschemeforathirdyear,inwhichparticipatingschoolsreceiveUS$1foreveryUS$20spentatFresh&Easystores.WealsorunShoppingNightforSchools,where5%oftheprofitsmadeonthatnightgotoaspecificschool.

IntheUK,weexceededourlargestevertargetof5million,raisingamassive7.2millionintotal.WealsodramaticallyincreasedUKcustomerdonationsthroughcoordinatedmarketingwithP&Garoundtheirhouseholdproducts.Ouremployeesurveystellusthat

two-thirdsofstafffeelproudtoworkforTescoasaresultofthiscampaign.nn

ational collections

Wehelpcharitiestoraisemoneybyallowingthemtocollectoutsideourstores.In2010/11,theRoyalBritishLegionraised3.3millionthroughTescocollections,andtheSlovakHumanitarian

Councilraised73,000throughitsChristmascollectionwithTesco.

ThisyearatRamadan,inpartnershipwiththeTurkishRedCrescent,weraisedenoughmoneytoprovideover17,000foodpackagesforpeopleinneed.Wealsodonated1,300unitsofblood,avaluableresourceinTurkey,collectedfrombothourstaffandcustomersinstorecarparks.

Equipment for schools

MARSMEALS

WebegansupportingMarysMeals,aninternationalcharityprovidingmealsforschoolchildren,throughtheTescoCharityTrustin2009.Tescossupportprovidesmealsforover4,000schoolchildreninIndia,Kenya,MalawiandThailandeveryyear.

Inspiredbythisinitialsupport,ourInternationalSourcingOfficeinBangaloredecidedtotakeitsownprojectforward,andhasbeenworkingwithMarysMealstoprovidefoodandprimaryeducationtochildrenwithoutaccesstogovernmentschools.ElevenofourBangaloreofficestafftookpartinamarathontoraisefunds.

WenowprovideallthefundingforacentrerunbyMarysMealsinDelhi,whichcatersforaround40childreneachday.Ourinvolvementhasledtoimprovedsanitationanddrainagefacilitiesatthecentre,aswellascleandrinkingwater,stationery,clothingandutensils.

9.3mThisyearwedonated9.3millionofequipmentto41,000schoolsandclubsintheUK.


TESCOFOUNDATIONINTHECZECHREPUBLIC

WewerenamedthebiggestdonorinhistoryintheCzechRepublicbyNROS,aCzechcharitablefoundation,whentheTescoFoundationraisedCZK3.6million(122,000)forHelptheChildrenthroughacause-relatedmarketingcampaignwithP&G.




Hungary LaunchCommunityChampionsintenstores Achieved we launched CommunityChampions in 21 stores

Poland Organise550eventsforlocalcommunities Achieved we organised a total of 804events for local communities

South Korea ProvideonemillionplacesatourExtendedEducationAcademies(nowcalledSchoolsofExtendedEducation)

ot achieved this year, we providedover 940,000 places

UK DoublenumberofCommunityChampionsto250andrun100successfulCommunityFairs

Achieved we now have over 300Community Champions in the UK

UK OpensixRegenerationPartnershipstoresintheUKandcreateatleast600jobsforlong-termunemplo

tesco cr report 2011 final

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