CHALLENGETesco have committed to reduce carbon emissions in the products they sell by 30% by 2020. To help achieve this, Tesco recognised that one of the things they needed to focus on was large scale collaboration with their supply chain, whose carbon footprint is 20 times greater than their direct footprint. Tesco required a solution that would allow them to collaborate closely, quickly and effectively with their suppliers in order to support their ambitious carbon targets. Such a solution did not yet exist.

SOLUTIONTesco took action and partnered with 2degrees in 2010. Together, they developed the Tesco Knowledge Hub – a ground-breaking, actively managed platform that enables Tesco’s top suppliers to work together to reduce the energy costs, waste and environmental impacts of the products Tesco buys.

RESULTS• The world’s first and largest Tier

1 supply base collaboration program, serving 2,100 members across 40+ countries

• Carbon and cost reductions

• Accelerated adoption of best-practice solutions

“I don’t know of any other resource which is as dynamic, and which has been growing consistently in its capability, functionality, reach and

access to people willing to share knowledge and learnings.” Tesco supplier, Jake Backus, Customer Sustainability Director, Coca-Cola

Tesco Knowledge Hub

Tesco collaborates with Tier 1 suppliers to cut carbon

CASE STUDY

HOW IT WORKSThis private online group unites Tesco and its top 1,000 suppliers in their common quest to reduce the energy costs, waste and environmental impacts of the products Tesco buys.

Suppliers work together, in an atmosphere of trust, to share knowledge and best practice, solve problems and make informed decisions. They are joined by Tesco representatives and independent experts and partners, including WRAP, IDG and the Carbon Trust.

The group is actively managed by dedicated 2degrees Community Managers, who facilitate online collaboration, alerting members to relevant insights, webinars, discussion forums and case studies.

Where they identify common, high-value challenges, 2degrees managers work with Tesco and 3rd party experts to create practical solutions, such as The Buying Club (see next page). They also create valuable content and facilitate offline collaboration, arranging site visits and special events.

The Knowledge Hub is the first and largest program of its kind, serving 2,100 members across more than 40 countries.

“The Knowledge Hub is probably one of the most relevant and helpful sources of information and connection on the subject of sustainability for corporates.”

Michael Alexander, Head of Environment, Diageo

“We were really pleased and impressed by the number of great responses to our question around sustainable transport. Understanding what the likes of Foster & Partners, Kelloggs

and Coca Cola are doing in this area has helped us spark discussions at Dyson.” Nicola Warner, CSR Manager, Dyson

Watch this video to see how a site visit to APS Salads inspires others to adopt sustainable best practice

“A valuable source of sustainability hints, tips and ideas from the moment we joined. …I can always pick up the phone, drop an email or post a query and know that we will

get an informed, professional and engaging response – every time!”Collette Butterworth, CSR & Funding Officer, Stobart Group

THE BUYING CLUBThe Buying Club is the first of its kind – a collaborative purchasing club that helps Tesco’s suppliers invest in energy efficient lighting by negotiating substantial bulk discounts and offering expert advice.

Managed by 2degrees and developed in collaboration with Tesco and the Carbon Trust, The Buying Club is available to all members of the Tesco Knowledge Hub, who can participate anonymously.

Member benefits include:

1. Expert advice and guidance fromthe Carbon Trust on the equipment they need and the energy savings they could make.

2. Savings of up to 25% on the costof low energy lighting equipment and installation…

3. Resulting in savings of up to 80%on energy bills.

On average, lighting installations with The Buying Club pay for themselves in under 3 years with ECA, and just over 3.5 years without ECA. Tesco and 2degrees are exploring how this concept can be extended to other areas and cover a wider range of energy saving equipment.

“We are committed to using our scale for good and this initiative is just one way we can do that, helping our suppliers make energy savings.”

Kene Umeasiegbu, Climate Change and Sustainable Sourcing Manager, Tesco

“The Buying Club is a wonderful initiative with a win-win-win situation.”

Shah Khan, Typhoo’s Group Technical and Ethical Manager, Typhoo Group

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RESULTS… A CLOSER LOOKCarbon and cost reductions:

• From individual projects: Suppliers report carbon and cost reductions from projects directly related to the Knowledge Hub

• From collaborative projects: E.g. The Buying Club, with quoted savings in under one year of 3,266 tonnes of carbon and £723,152 in electricity and maintenance

Ground-breaking innovations and positive press Tesco and 2degrees’ partnership has resulted in:

• The first and largest fully-linked Tier 1 supplier collaboration program in the world

• Awards for Tesco, including:

- A Gigaton Award for outstandingcarbon reductions and sustainability performance

- Grocer Gold Award 2013 for ‘GreenRetailer of the Year’

- Shortlisted in the 2014 IGD Awardsfor the Buying Club

Accelerated adoption of best practice:

• Knowledge-sharing and expert advice means suppliers can move faster and with greater confidence

• Healthy competition between suppliers encourages swift adoption

Unprecedented competitor co-working for the common good, inviting one another for site visits, suggesting solutions, sharing innovations and even collaborating on product development

Stronger supplier relationships for Tesco.

1. Commitment to use their scale for good

2. Sensitivity towards supplier concerns, allowing the blind collaboration that ensures the Buying Club works so well

3. Willingness to pioneer and adopt innovative peer-to-peer solutions at scale

2degrees helps major corporations cut costs, reduce risk and achieve smarter growth by being more sustainable. It does this by helping to transform business practices, making it simple and efficient to work closely and at scale with suppliers, internal operations and customers.

Our unique capability results from continued investment in the bespoke technology, innovative processes and expert people that make all this possible.

WHAT MAKES THIS POSSIBLE?

“Tesco is leading the way in sustainable best practice, by finding solutions to

real-life problems and sharing knowledge and innovation with our suppliers to reduce costs

both financially and to the environment.” Andrew Hill, Brand Communications Manager, Tesco

e: tamarajames-thomas@2degreesnetwork.com | t: +44 (0) 1865 597 647 | w: www.2degreesnetwork.com