Tesco CSR

Tesco PLC
contents
01 ABOUT THIS REPORT
02 CHIEF EXECUTIVE’S INTRODUCTION
04 TESCO AT A GLANCE
1 ENVIRONMENT
PAGE 06
2 communities
PAGE 18
suppliers
3 & ethical
trading
PAGE
PAG E 0024
customer
4 choice &
Health
PAGE 32
PAGE 00
5 OUR people
PAGE 40
Corporate Responsibility Report 2009
46 MANAGINg CORPORATE RESPONSIBILITY

50 KEY PERFORMANCE INDICATORS
Tesco PLC
Tesco House
Delamare Road
Cheshunt
Hertfordshire EN8 9SL
Tesco PLC
contents
1 ENVIRONMENT
PAGE 06
2 communities
PAGE 18
suppliers
3 & ethical
trading
PAGE
PAG E 0024
customer
4 choice &
Health
PAGE 32
PAGE 00
5 OUR people
PAGE 40

Tesco PLC
Tesco House
Delamare Road
Cheshunt
Achievements A VIEW FROM
and challenges Achievements
We helped over 4.6 million people FORUM FOR
THE FUTURE
around the world get active –
over two million in Thailand alone.
See page 36.
Challenges
Since we introduced biofuel into our We have removed over 2,500 tonnes of
petrol filling stations there has been saturated fat and 3,000 tonnes of salt
debate about its longer-term impacts. from our products in the UK since 2005. Challenges
We have asked the Sustainable See page 35. We continue to work with
Consumption Institute (SCI) at governments, health organisations
Manchester University to look at this and industry bodies to develop
issue in more detail. See page 16. common standards and targets for
nutritional labelling. See page 33.
Achievements We are not yet able to report Group CUSTOMER Supermarkets have a vital role to play There is still, however, a lot further The next big challenge for Tesco is to
We were the first major retailer to water use in 2008. This is disappointing. CHOICE in these difficult economic times. It is to go. We would urge Tesco to use its address how it can grow whilst respecting
carbon label 100 own-brand products
in Ireland and the UK including orange juice,
We have asked the SCI to help us
establish a meaningful approach. & HEALTH crucial that leading retailers embrace
sustainability in a recession. Of course,
influence to take a bolder position on
issues such as healthy eating. Tesco
environmental limits. Humankind is
already placing intolerable stress on
detergent and potatoes. We will introduce See page 11. they must make cost savings. But they should be leading the industry on the planet’s resources and its ability
them in South Korea this year. See page 11. must also continue to develop products radically reducing salt and sugar in to deal with our emissions. As Tesco
We have been working hard to achieve
very stretching packaging reduction
and services that create real value for foods. We would encourage Tesco continues to expand its business, it must
We opened our first new format consumers whilst not damaging the to further improve the nutritional simultaneously reduce its environmental
environmental store in Cheetham Hill, targets based on weight. We now think Challenges
weight reduction may not be the best We can do more to increase the planet. Those that do so will come out content and sustainability profile of impact. It has already shown that
Manchester, which has a 70% smaller
carbon footprint than an equivalent measure of environmental benefit. local impact of our community of the downturn commercially stronger. its Value range so that it offers healthy, it can deliver radical environmental
We are working with suppliers to achieve activities, building on the affordable food to the mainstream. improvements in specific areas. Next
store built in 2006. Planning permitting,
this will be a model for building stores environment a consensus on a better approach. success of initiatives such Looking at the Report itself, it highlights
how Tesco is trying to tackle the huge
We would also like to see consensus it needs to look at the whole picture.
from now on. See page 9. See page 14. as our 91 South Korean between the major supermarkets To do this, it will have to ask some big
Culture Centres. See page 22. number of issues that it faces as one
on universal nutritional labelling. questions about what a truly sustainable
of the world’s largest retailers. We
We halved our energy use per square foot supermarket looks like, develop some
in our UK stores (against a baseline of 2000). welcome its increased international On climate change, customers
new business models and set – and
See page 7. content, as this better reflects Tesco’s driving to its stores generate a major
Achievements then achieve – some ambitious global
global reach. Aligning the Report’s proportion of Tesco’s indirect carbon
We now have over 250 store sustainability targets.
Community Champions in China,
the Czech Republic, Malaysia,
communities structure with Tesco’s Community
Promises makes sense, and we welcome
footprint. We would therefore urge
Tesco to provide its customers with Peter Madden
Slovakia, South Korea and the UK. the addition of opinion former feedback low-carbon access to its products Chief Executive
See page 22. (‘Others say’) as a sign that Tesco is and services, and to incorporate this
Dan Crossley
beginning to engage more openly with into its eco-store blueprint. We would
We launched our Community Principal Sustainability Advisor
stakeholders. It is encouraging also to encourage Tesco to accelerate its
Promises to show our staff the see Tesco talk explicitly about how it is carbon labelling roll-out, because
many ways in which they can trying to address its indirect impacts. the process of understanding the
make a difference. See page 48. carbon footprint of a product can
Tesco has had a number of notable Forum for the Future – the sustainable
be a very valuable step in helping
We raised a record £6.2 million for achievements over the past 12 months. development charity – works in
our UK Charity of the Year, Marie Curie to drive emissions out of the supply
We are very encouraged to see Tesco partnership with leading organisations
Cancer Care. See page 23. chain. Tesco should also start to apply
reduce the amount of in-store waste in business and the public sector to
relevant lessons it has learned on
going to landfill by one-third in the create a sustainable future. Forum
SUPPLIERS space of a year. We welcome Tesco’s
tackling climate change to tackling
for the Future is a Registered Charity
Achievements
We signed up 726 skilled and vetted & ETHICAL redefining of what constitutes ‘local’
embedded water.
in the UK (number 1040519). It is
auditors from 11 audit bodies around TRADING Achievements
and its growing support for local
products. The commitment to roll out
If Tesco is to truly ‘lead by example’ on
climate change, it must reduce its own
not an auditor or a verifier and these
comments should not be read as
the world to carry out independent audits Challenges 86% of new managers were appointed
of our supply chain. See page 29. We risk assessed 100% of supplier sites from within Tesco. See page 41. the blueprint from its Cheetham Hill absolute carbon emissions year-on-year. verification of data or information
Challenges eco-store across all its other new stores contained within the Report.
and increased the number of high-risk sites Although great progress has
Over 90% of suppliers around the world audited to 87% (up from 73% last year) but In the UK our Local Employment is commendable and we urge Tesco
been made we still need to do Tesco is one of Forum for the Future’s
say we treat them with respect. See page 25. there is still work to do to meet our target of
auditing 100% of high-risk sites. See page 29.
Partnerships provide jobs for the long-term
unemployed and other disadvantaged
OUR PEOPLE more to ensure women are better
represented at senior levels.
to also retrofit all its existing stores.
We are also pleased to see Tesco step
Corporate Partners. Through this
partnership Tesco makes a direct
job seekers wherever we open new stores. See page 44. up its efforts to educate consumers
We are engaged in an active dialogue with See page 20. financial contribution to Forum for
on the carbon footprints of what
animal welfare organisations to continue the Future. Last year Forum’s income
they buy. And we support the idea
to improve industry welfare standards. In South Korea we appointed our first from Tesco represented less than 2%
See page 27. of ‘Regeneration Partnerships’,
female director. See page 44. of Forum’s turnover. The partnership
offering training and employment
is currently in its eighth year. For more
for the long-term unemployed.
information on Forum for the Future
visit www.forumforthefuture.org
Designed and produced by 35 Communications
Consultancy by Context
THE FUTURE
See page 36.
Challenges
Dan Crossley
Achievements
embedded water.
about
this
REPORT
Go online! Welcome to our 2009 Corporate Responsibility
For more information visit Report. In it, we describe our position on key
www.tesco.com/ issues, as well as performance during the year
cr-report09 and targets for future improvement.
The Report covers all Tesco Group activities in
the financial year March 2008 to February 2009,
unless otherwise stated. It is aimed at those
seeking a complete, yet concise, view of our
corporate responsibility strategy, policies
and performance.
For more information visit
www.tesco.com/cr-report09
Responding to feedback
OTHERS SAY We spoke to a wide range of stakeholders
“I’d like to see a shift towards
during the year, and describe this work in
strategic thinking in the annual CR more detail on page 52.
Report, rather than the historic focus.
This would help investors understand
emerging issues. CR information
To get specific feedback on our CR strategy,
should be contextualised to enable performance and reporting, we held two
mainstream investors to understand
how this activity relates to the externally facilitated focus groups of opinion
business strategy” – Investor formers in areas related to our business,
including suppliers, NGOs, government,
“[Last year] the Report contained
nowhere near enough on how the journalists, socially responsible investors
Community Plan is being rolled out and academics. They felt our reporting should
internationally” – Supplier
present other people’s views on key issues as
well as Tesco’s, for balance. To address this, each
chapter includes quotes from these focus groups,
under the heading OTHERS SAY (see page 48).
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1
Tesco PLC Corporate Responsibility Report 2009
chief executive’S
introduction
Chief Executive’s
introduction
This Corporate Responsibility Report demonstrates
our progress in our community and environmental
performance across the Group.
The past year has been difficult for many progress on the environment and helping
of our customers and their communities our customers save money. By growing
around the world. No country has been our business responsibly, we create more
immune from the global recession and jobs and help more people develop skills
the toll it has taken on job security, and careers, helping to tackle social
family incomes, business and community mobility and driving regeneration in
investment as well as individual and many communities.
collective confidence in the future.
Our Community Plan focuses on five
The global recession has its roots in community promises, developed in close
the financial sector and some people consultation with our staff and customers
have come to question whether, left to around the world. These are: actively
themselves, businesses can be expected supporting local communities; buying
to operate in the wider social interest. and selling our products responsibly;
caring for the environment; giving
I understand why people seek to reassess
customers healthy choices; and creating
the role of those institutions which they
good jobs and careers.
believe contributed to the current crisis.
This Corporate Responsibility Report
But I have always believed that
demonstrates our progress in our
effectively run businesses operating
community and environmental
in competitive markets can improve
performance across the Group, shows
both the lives of their direct customers
where we have met our targets and where
and the well-being of their communities
we have not, highlights our belief that
as well as the prospects of society at large.
there is more to do, and expresses our
This, our latest Corporate Responsibility appetite to do more in the coming years.
Report, sets out that case for Tesco.
Climate change remains the major
Three years ago we showed our strategic challenge of our age.
determination that a strong community I fundamentally believe that business has
and environmental performance should a crucial role to play in tackling climate
be at the heart of any modern, successful change, setting an example, guiding
business, by making Community and consumers towards more sustainable
Environment the fifth segment of our forms of consumption, making them
‘Steering Wheel’. Two years ago we put affordable and providing the information
the community at the heart of what we on which to make informed green choices.
do by making it the fifth part of our
We continue to drive down our own
long-term strategy. This year, while
carbon footprint. Our latest environmental
many organisations have reduced their
store in Cheetham Hill, Manchester,
spending in these areas, we have grown
has a carbon footprint 70% below that
our investment in communities. While
of an equivalent store in 2006. It provides
others have questioned whether the
a blueprint for other stores we are building
environment can be a priority in difficult
in the UK and internationally. We now
times, we have demonstrated that
have environmental stores in every
tackling issues like climate change
country in which we operate.
remain at the top of our agenda.
More and more of our customers are
I believe that now, more than ever,
making green choices with Tesco that
is the time to show leadership, supporting
help save money as well as carbon. Green
our customers and our staff as they face
Clubcard points encourage our customers
challenging economic circumstances,
to reuse and recycle, and over 9.5 million
and tackling the issues that matter to
Clubcard customers in the UK now reuse
communities and society. By running our
their bags, halving the number of bags
business responsibly and efficiently we
reduce CO2 emissions and costs – making
2
CO M
MU
“NOW, MORE THAN EVER,
N
IS THE TIME TO SHOW
IT
LEADERSHIP, SUPPORTING
Y
OUR CUSTOMERS AND
OUR STAFF AS THEY FACE
CHALLENGING ECONOMIC
CIRCUMSTANCES, AND
TACKLING THE ISSUES THAT
MATTER TO COMMUNITIES
AND SOCIETY.”
Go online! To see our full ‘Every Little Helps’ strategy

visit www.tesco.com/about-us/strategy
used each week compared to August Our success is built on our ability to listen The financial and economic crisis has hit
2006. In June, Tesco Malaysia became to our customers, and to anticipate and the developing world hard. For developing
the first country outside the UK to launch respond to changes in society. We are countries, international trade is more
green Clubcard points to help customers listening carefully to our staff and our vital than ever. This last year has seen
use fewer carrier bags, issuing over 14,000 customers in this recession, and are us make good progress on our ethical
points in the first week of the reward making sure we support the causes trading standards, growing our expertise
scheme. We also now reward customers that matter to them. Our Community on labour standards and strengthening
in South Korea for reusing their bags and Champions are our strongest expression our audit and training work. And, through
for cycling to our stores. yet of our investment in communities. the SCI we are working hard to understand
We now have Community Champions the best contribution we can make
Over the past year we became the
in 65 stores and five distribution centres to sustainable development through
first major retailer in the world to carbon
in the UK, each working with local our relationship with our international
label products. We have now labelled
schools, charities and services, as well as supply base.
100 products in the UK and Ireland,
in our stores in China, the Czech Republic,
and have many more in the pipeline. There will be more challenging times
Malaysia, Slovakia and South Korea.
South Korea is also starting carbon ahead. But good businesses relish
labelling this year. I am proud that in a year where many challenging times. We know that our
businesses have dramatically reduced customers and their communities depend
The Sustainable Consumption Institute
their community investment, Tesco has on us more than ever. And we know that
(SCI) which we established with a
donated over £57 million to local causes if we fulfil their needs – not just in their
£25 million commitment to the University
and communities. homes but in their communities and in
of Manchester is beginning to bear fruit,
broader society – they will repay us with
tackling some of the many questions I believe this investment in communities
their custom and their loyalty.
about how to make a consumer society is what our staff and customers expect –
sustainable. In addition to making a it reflects their instincts and their This understanding is, I believe, at the
number of senior academic appointments, behaviours. Indeed, in these very difficult heart of a sustainable business.
the SCI last year welcomed its first tranche economic times, they have themselves
of post-doctoral students from around the shown unparalleled energy and
world – sustainability leaders of the future. generosity, breaking all records to raise
The SCI is committed to publishing its over £6 million for our UK Charity of
research findings on an open access basis. the Year, Marie Curie Cancer Care. Terry Leahy Chief Executive
We are acutely aware that recessions In a year where many people have been
create hardship for many families and deeply worried about losing their jobs,
communities. Our customers do not just we have created new jobs and invested
spend less, they worry more. People can in our people. Through our regeneration
feel more isolated or vulnerable in their partnerships, we are continuing to bring
communities, and can be concerned many long-term unemployed people
that civic values and neighbourliness back into work, giving hope not just
are less prevalent than they used to be. to individuals but to the communities
in which they live and work.
3
tesco at
a glance
Stores AND
employees
P
10 11 1213
GROUHTS worldwide
9
8
7
6
HIGHLIG
5
4
1
3
Tesco is the world’s third largest grocery
retailer, with operations in 14 countries.
2
Our scale means we can provide our
customers with great choice and value.
We cater for all sections of the market,
with ranges spanning our Value
and Discount Brands right through No. of stores by market
to our premium ranges, as well as
us
1 UK 2,306 62 new stores and 1,380 new jobs
specialist ranges such as Organic,
2 Thailand 571
Fairtrade (see page 30) and Healthy
3 Poland 319
Living (see page 34). We are also more
4 South Korea 242
than a food retailer. Non-food ranges
5 Hungary 149
accounted for 21% of Group turnover
6 Japan 135
in 2008 and include electrical goods,
7 Republic of Ireland 116
books, home-ware, sports equipment,
8 US 115
personal finance and clothing.
9 Czech Republic 113
10 Turkey 96
11 China 70
12 Slovakia 70
13 Malaysia 29
59.4BN
GROUP 1011121314
SALES 8
9
7
6
No. 3
5
4
europe
Third Largest 3
1
Czech Republic
grocery 18 new stores and 772 new jobs
retailer in 2
the world Hungary
26 new stores and 697 new jobs
Poland
No. of employees 21 new stores and 1,900 new jobs
470,000 by market Republic of Ireland

17 new stores and 1,173 new jobs
PEOPLE 1 UK 286,394
WORLDWIDE 2 Thailand 38,166
Slovakia
3 Poland 23,569
4 Hungary 21,356 Turkey
5 South Korea 20,626 41 new stores and 1,370 new jobs
4,331 6 China 19,452
7 Republic of Ireland 13,764
STORES 8 Czech Republic 12,677
WORLDWIDE 9 Malaysia 9,872
10 Slovakia 8,286
11 Turkey 7,025
14
12 Japan 4,007
13 US 2,583
MARKETS 14 Other* 731
* In 2008 there were an additional 731 people
working in other global locations such as
international buying hubs.
4
10111213
ASIA 8 9
7
China 6
15 new stores and 1,950 new jobs 5
4
Japan
3
2 1
Malaysia
South Korea
Thailand
Revenue by
UK market £m
1 UK 38,191
2 South Korea 3,139
3 Republic of Ireland 2,380
4 Thailand 2,137
5 Poland 1,964
6 Hungary 1,774
7 Czech Republic 1,265
8 Slovakia 894
9 China 800
10 Malaysia 584
11 Turkey 571
12 Japan 408
13 US 206
UK sales
41.5BN
international
sales
17.9BN
India
This year we announced our entry into the Indian market. We are establishing
a wholesale cash & carry business that will offer a comprehensive range
of great value fresh food, grocery and non-food products to small retailers, group non-food
restaurants, kirana stores and other business owners. We will also provide
farmers and other suppliers with a highly efficient route to market.
sales
We have also entered into an exclusive franchise agreement with Trent, 12.5BN
the retail arm of the Tata Group. In return for a fee, Trent will be able to
draw on Tesco’s extensive retail expertise to support the development
of its Star Bazaar hypermarket business. retail services
As we are still establishing this business and it is not yet fully operational, sales
throughout this Report where we refer to 13 markets we have excluded
India as there is no relevant data. However, India is included in our 3.4BN
carbon footprint.
5
As a global business, we have an
important role to play in helping to
minimise climate change. We are proud
of the progress we have made this year
across our businesses, and by working
with our suppliers and customers
we are determined to do more.
Climate changE ENERGY
We want to play a leadership role CHAMPIONS
in tackling climate change. Evolving
scientific evidence tells us that we
around
need to move ever more quickly the world
to reduce emissions. Despite the
recession, customers want to be
green and expect us to be too.
We employ 470,000 people around
the world, and many more people work
in firms and businesses supplying our
stores. Our aim is to mobilise collective
action among customers, suppliers
and employees, to help protect the
environment, and generate a mass
movement in green consumption. To engage staff in our bid to tackle
climate change we now have Energy
Our climate change programme has Champions in the Czech Republic,
three main parts: Hungary, Malaysia, Poland, Slovakia,
• leading by example – reducing our South Korea, Thailand, Turkey and
own direct carbon footprint; the UK.
• working with our supply chains and Our Energy Champions are responsible
partners to reduce emissions more for reducing energy consumption in
broadly; and our stores through engaging staff and
• leading a revolution in green implementing energy-saving measures.
consumption. In the UK we have increased the
Leading by example number of in-store Energy Champions
We want to set an example to our to around 4,000, with up to seven in
customers and suppliers by tackling our large Extra stores.
our own carbon footprint. In 2007
we set ambitious targets to reduce
emissions in our own buildings and
distribution networks. We will: equivalent). This means that our absolute
• halve emissions from existing carbon footprint has increased by 3.7%
buildings by 2020, against a baseline compared with last year.
of 2006; CO2e refers to the amount of CO2 that
• halve distribution emissions of each would have the equivalent global warming
case of goods delivered by 2012, potential as a certain amount of a specific
against a baseline of 2006; and greenhouse gas.
• halve emissions from new stores by
2020, compared with an equivalent Across the Group, energy consumption in
store built in 2006. our existing stores and distribution centres
(those built before 2006) has decreased
We backed our targets with a £100 million by 9.1% this year, and by 12.6% since 2007.
Sustainable Technology Fund starting
in 2007 to support large-scale carbon We are a growing business worldwide.
reduction technologies in our stores, We believe that growth is consistent
distribution centres and supply chains with tackling climate change provided
worldwide. it is low-carbon growth. Indeed, it is only
through low-carbon enterprises replacing
In the UK, our energy use per square foot higher-carbon ones that we will achieve
is now half what it was in 2000. We invested the very challenging emissions reductions
around £60 million in energy-saving and set globally.
low-carbon technologies in 2008.
Over the past year our net sales area
Our direct carbon footprint grew by 16.4% while our carbon footprint
Our global direct carbon footprint in increased by 3.7%. This means we cut our
2008 was 4.9 million tonnes of CO2e carbon intensity by 10.9% year-on-year.
(carbon dioxide equivalent). We publish
WE HAVE HALVED our carbon footprint through the Tesco was commended for its carbon
our energy use independent Carbon Disclosure Project management and reporting approach
per square foot IN and in this Report. We have calculated our in the 2008 global Carbon Disclosure
THE UK SINCE 2000 2008 carbon footprint using up-to-date Leadership Index, and was the
multipliers and have also recalculated highest scoring retailer. This index
our 2007 footprint using those multipliers assesses the approaches taken by the
(see ‘Notes about carbon footprint data’ FTSE 500 companies.
on p8): the updated 2007 figure is 4.75
mtCO2e (million tonnes of carbon dioxide
7
1 ENVIRONMENT in 2008 our global
direct carbon
footprint was
4.9mtCO2e
5
Total emissions (mtCO2e)

4
0
2005/6 2006/7 2007/8 2008/9
Share of emissions by Absolute emissions by Group emissions by

country for 2008/9 market 2005–2009 source for 2008/9
UK 54% UK Grid electricity 62%
Thailand 10% Thailand Refrigerant 20%
South Korea 7% South Korea Diesel/oil 11%
Poland 6% Poland Natural gas/LPG 6%
China 5% China Business travel 1%
Hungary 4% Hungary
Republic of Ireland 3% Republic of Ireland

Czech Republic
Malaysia
3%
3%

Czech Republic
Malaysia
ERM 2008/9
Turkey 2% Turkey assurance
Slovakia 1% Slovakia summary

US
Japan
1%
1%

US
Japan statement
India <1% India “Tesco appointed Environmental Resources
Management Limited (ERM) to provide
independent external assurance of Tesco’s
global direct carbon footprint for its
Notes about carbon footprint data factor used to calculate emissions from 2009 Corporate Responsibility Report.
We have calculated our carbon footprint UK grid electricity. We have recalculated
according to the World Business Council our emissions from previous years on The objective of our engagement was to
for Sustainable Development (WBCSD) the same basis, so that year-on-year conclude whether Tesco has appropriately
greenhouse gas protocol, which is the performance can be reviewed. reported its global direct carbon footprint
internationally recognised standard within this Report (moderate assurance).
In addition, our 2009 figure has been We reviewed Tesco’s approach to measuring
for corporate carbon reporting, and
normalised to give a 52-week number and reporting its carbon emissions at Group
updated guidelines produced by
for comparison (2008 had 53 weeks). level and at country level in Hungary,
the UK Government (Defra) in 2008.
The Tesco direct carbon footprint includes Poland, South Korea, Thailand, and the UK.
Defra has changed its guidance in relation
emissions from: Based on the work undertaken as described
to calculating emissions from renewable
energy generation. Carbon emissions 1. Property (all our stores and distribution above, we conclude that Tesco’s global
from electricity purchased through centres and offices globally; buildings direct carbon footprint (total direct carbon
renewable electricity contracts are now operated by our major subsidiaries equivalent emissions and the percentage
calculated using the same emissions e.g. One Stop and Dobbies in the UK; breakdown per country and per emissions
factor as normal grid electricity, rather refrigerant emissions). type) is appropriately stated. For further
than zero. We have applied this practice details on the work we undertook and
2. Distribution (secondary distribution our findings, please read our full assurance
across all our UK and non-UK operations.
from DC (distribution centre) to store, statement at www.tesco.com/cr-report09/
The only instances where we have applied
including backhauling; primary environment/erm.”
an emissions factor of zero are where
distribution from supplier to DC,
electricity is generated on Tesco sites ERM
including fronthauling, where
(e.g. solar-generated or wind-generated London, UK
arranged by Tesco; distribution from
energy), where this is considered to May 2009
Central European DC (in Slovakia)
be ‘additional’ to renewable energy
to Central European country DCs;
generated in accordance with existing
Tesco Home Delivery).
in-country renewables policy (such as
the Renewables Obligation in the UK). 3. All business travel by our employees,
where paid for by Tesco.
In line with revisions to the WBCSD and
Defra guidelines, we have updated all For a full explanation and rationale visit
OTHERS SAY
our emissions factors globally. The most www.tesco.com/cr-report09/ “I would like more transparency about
significant of these changes is to the environment/footprint how Tesco arrives at its carbon footprint
figures” – Government organisation
8
Towards a zero-
carbon store:
CHEETHAM HILL,
MANCHESTER, UK
Environmental stores
Since 2006, we have built a series of
OTHERS SAY
environmental stores in every country in “Tesco should show thought leadership
which we operate. These stores test new – for example on how the store
technologies and designs to save energy environment can change to significantly
and reduce CO2e. Each store has achieved reduce impacts” – NGO
significantly lower environmental impacts
than the previous one and many of their
innovations are now incorporated in our
standard stores.
Cheetham Hill is Tesco’s first store built
In China, for example, by May 2009 using our new, low-carbon blueprint
all existing stores will have the energy
management systems for refrigeration
– the result of bringing together
everything that has worked well in BUILDING WITH
first trialled in our environmental stores.
This reduces the power consumption
our existing environmental stores. sheep’s wool
of these systems by 15%. This year we
The store has a carbon footprint 70%
smaller than an equivalent store built IN Slovakia
will expand this to cover air-conditioning. in 2006 and, planning permitting, A new Tesco store in Rajec in northern
All our stores in the US are about 30% this will be the model for stores built Slovakia is the only one of its kind to
more energy efficient than a typical in the UK from now on. be built from sheep’s wool, wood and
supermarket* and contain a number of The carbon savings come from an pressed straw.
green features: from increased insulation innovative mix of environmentally
and night shades on refrigeration friendly design, materials and
cases to keep cool air from escaping; technologies. These include a frame Alternative energy
to hybrid parking spaces and bike racks made from timber instead of steel, 12 Generating renewable energy is a key part
to encourage employees and customers roof lights each measuring six metres of our climate change strategy. We are
to use greener transport. across to cut down on artificial lighting, installing alternative energy sources on
For more examples of environmental and a refrigeration system which uses site such as wind, solar, bio-gas, combined
stores visit www.tesco.com/cr-report09/ CO2 as a coolant rather than more heat and power (CHP) and combined
environment/stores potent greenhouse gases, cooling, heat and power (CCHP).
hydrofluorocarbons (HFCs). In the US, Fresh & Easy’s £7.5 million
The chart below shows the decreasing
carbon emissions per square foot Attention to detail includes using more investment to install 46,450m2 of solar
achieved at successive environmental material with recycled content and panels at its California distribution centre
stores in the UK. designing store equipment such as is now providing nearly three-quarters of
signs to be easily recycled when we the facility’s energy.
* Calculated through a modelling exercise from
Southern California Edison Savings by Design.
no longer need them. In 2008 in Turkey, we built the first
The store is also our latest regeneration trigeneration scheme to power a
partnership, with around half of the shopping centre. The 2.2MW plant
Carbon saved (kgCO2e) per sq ft
260 employees having previously will cut carbon emissions by 16%.

been unemployed or on benefits for In the UK, in 2008, we invested over
six months or longer. £26 million in 47 CHP and CCHP plants
40
“Tesco’s climate commitments are for local generation, as well as 27 wind
30 proving that it is possible to combine turbines and one store installation for
new technology and good business solar generation. These technologies
20 sense to make dramatic reductions are expected to reduce our carbon
in their carbon footprint. This new emissions by about 6,000 tonnes
Shrewsbury
Cheetham
blueprint store design is an example of CO2 per annum.

Swansea
10
that we hope other businesses will
Wick
Diss
Most of our CHP plants will run on natural

Hill
0 follow.” – Steve Howard, CEO, gas and some will run on renewable fuels
The Climate Group such as recycled vegetable oil, reducing
Progress in reducing Visit the store: Thomas Street, carbon emissions further.
emissions (kg of CO2e/sq ft) Cheetham Hill, Greater Manchester
M8 5DP
in UK environmental stores
9
1 ENVIRONMENT
Distribution
Distribution accounts for 11% of our
Alternative transport
We are using more double-deckers,
GREEN
carbon footprint. We aim to halve our increasing the number on the road DISTRIBUTION
CO2 emissions per case delivered from from 200 to 300 a day over the last year, CENTRE –
our distribution network by 2012
(from a 2006 baseline).
saving 6,000 tonnes of CO2 per year.
POSTRIZIN,
To do this we are doing more with our
As well as double-deckers, we are using
more alternatives to road transport and CZECH REPUBLIC
existing network through: now save 2,909 tonnes of CO2 each This year we completed the first phase
year compared to a 2006 baseline by of solar panel installation at our
1. using our vehicles more efficiently;
transporting goods by rail. This year distribution centre in Postrizin, Czech
2. using alternative transport;
we increased the train link between Republic. The 1,200m2 of panels
3. investing in new technology.
our distribution centres in Daventry and will save 30 tonnes of CO2 per year.
We have already made great progress Grangemouth, which saves us 4.2 million Phase two, a further 1,680m2 of solar
in reducing the carbon intensity of our road miles a year. In October we also panelling with an expected capacity of
distribution network, and wherever introduced a train operating between 210KW per year, is currently in progress.
possible we have shared our experience Grangemouth and Inverness which will
and used it to inform thinking across save still more road miles and CO2e.
the industry, working in the UK with the
Investing in new technology
Institute of Grocery Distribution (IGD).
We have pooled resources with our
In 2008 our total direct carbon footprint
from transport was 563,655 tonnes of
suppliers and haulage partners to
introduce new software which has GREEN
CO2 emissions. Our carbon footprint helped us reduce the number of empty DISTRIBUTION
per case delivered is 0.154kgCO2,
a reduction of 3.7% per case delivered,
vehicles on the road, saving 3,590 tonnes
of CO2e a year. CENTRE –
across our global operations. We have
As well as reducing CO2e from vehicles, LIVINGSTON
now achieved 23% of our target to
we have worked to reduce the impact of Our new distribution centre (DC)
cut CO2 emissions per case delivered
our distribution centres. By consolidating at Livingston in Scotland was built
by 50% by 2012.
and rationalising our distribution network, on a former industrial site, using
Using our vehicles more efficiently we have reduced road miles. New state-of-the-art technology to make
Despite opening more new stores, distribution centres such as Livingston the centre as efficient as possible.
we have not increased the size of our use the latest technology to minimise
distribution fleet for three years in the UK. their carbon footprint. Located near excellent road and rail
We have done this by rethinking the way networks, the DC uses rainwater
For a full explanation of our distribution harvesting to wash trays and vehicles.
we use our vehicles. For example, we
systems visit www.tesco.com/cr-report09/ Skylights make the most of natural
have used the exact measurements
environment/distribution light while sensors switch lights on
of products to help us fill our vehicles
42% more efficiently. only when necessary. Low ceilings in
the chilled area improve refrigeration
In the last three efficiency and all card and plastic waste
years we have not is baled for recycling. We also plan
increased the size to install a biomass plant to supply
of our distribution renewable energy to the site, which
fleet in the uk should be operational in 2011.
10
We have
put carbon
Working with suppliers and partners
We are supporting action on climate
OTHERS SAY labels on
change beyond our direct business “There is a true commitment [from 100 products
activities through our relationships with Tesco] from a supplier perspective. and plan to
governments, businesses, academia and So far we feel it has been an open introduce
other influential organisations. and collaborative environment them in
and it is working” – Supplier SOUTH korea
During 2008 Tesco worked on tackling next year
climate change with the Carbon
Disclosure Project, Confederation
of British Industry, Food and Drink
Federation and the Institute of Grocery Sustainable Leading a revolution in green
consumption
Distribution. We aim to work with our
partners to encourage urgent coordinated
Consumption The Carbon Trust estimates that consumers
agreement between governments in Institute account directly and indirectly for 60% of
carbon emissions in developed countries.
the run-up to the Copenhagen Climate In 2007, we committed £25 million to Each week, over 30 million people shop
Conference in December 2009. create a new Sustainable Consumption in our stores around the world. These
We know that we can make a significant Institute (SCI) at the University of customers are seeking help to reduce
difference by working with suppliers, Manchester. The SCI aims to answer their impact on the environment and
as reducing the carbon footprint within some of the fundamental questions on climate change.
our supply chain has the potential for about how to make a consumer
society sustainable. Carbon labelling
achieving very large carbon savings.
We are committed to helping and
We are working with major suppliers to 2008, the first year of the SCI, encouraging our customers to go green.
find ways to cut emissions in the supply was devoted to building a team Carbon is a new subject for many people
chain. For example we are exploring and establishing the initial research and clear information will help them to
distribution efficiencies with Unilever streams. The SCI’s research is focused understand the impact of their purchases
intended to remove 173,000 lorry miles on four areas: and their behaviours.
by 2010. 1. Understanding consumers: our That is why we have worked with the
Another example is our sourcing office behaviours and lifestyles, and what Carbon Trust and key suppliers to develop
in Sri Lanka who are working with local can influence and motivate change. an innovative universal carbon footprint
clothing manufacturers to develop 2. Patterns of consumption: how we label. The footprinting process not only
greener factories which are more energy shop, and the role retailers can play helps consumers but, crucially, supports
efficient, use solar power and recycle in reducing our carbon emissions. our work with suppliers to reduce
water. We developed and issued the emissions. Carbon footprinting of products
clothing green factory guidelines in 3. Products and supply chains: helps identify the opportunities to reduce
2008 which help all our clothing suppliers understanding the carbon impact both emissions and costs.
not only build green but also make existing of what we buy, use and consume.
From April 2008 we trialled this label
factories more energy and water efficient. 4. Making development more on selected own-brand products such
Water use sustainable: searching for low-carbon as orange juice, light bulbs, washing
Water supply and water depletion are development paths which support detergents and potatoes, in the UK and
major environmental issues linked to growth in both developed and Ireland. We extended this trial and by
climate change. We are developing developing countries. the end of February 2009 had labelled
a strategy and working with others A total of 12 academic appointments 100 products. To support customers’
including the Sustainable Consumption have been made to the SCI, including understanding of these new labels, we
Institute to understand how we can work five at professorial level. Eleven PhD distributed one million copies of the
with our suppliers to reduce our water students from around the world have booklet ‘How can we shrink our carbon
footprint. This will enable us to set been recruited and £2.3 million committed footprint?’, developed in conjunction with
meaningful targets on water. to 24 projects so far. An extensive, the Carbon Trust and Energy Saving Trust.
In the meantime we are trialling a number multidisciplinary, multi-faculty network The first reactions from our customers are
of initiatives to reduce our water use, and of academics is being established and encouraging. More than half said that wider
that of our customers. We sell a range of prestigious SCI independent research application of the label could change their
water saving products and are deploying fellowships are being awarded. purchasing decisions and 68% said they
various water saving initiatives throughout The SCI is committed to publishing had an understanding of carbon footprints.
our business worldwide, including its research findings on an open
rainwater harvesting, school water access basis.
conservation campaigns in Turkey and www.manchester.ac.uk/sci
closed water circulation car washes in
our Polish distribution centres. In 2009,
our Chinese business will begin rainwater
OTHERS SAY
harvesting and using grey water in toilets “The establishment of the
and to wash vehicles. Manchester Centre [The Sustainable
Consumption Institute] should be
entirely applauded” – NGO
11
1 ENVIRONMENT
Learning
from carbon
labelling –
laundry
detergent
Energy-saving light bulbs
UK Greener Living brand Helping customers save energy in their

Our new Greener Living brand helps our homes is one of the most promising
customers to make greener choices. The areas for carbon reduction. This year we
range comprises 200 products as diverse promoted sales of energy-efficient light
as energy-saving light bulbs, paper bulbs in the UK, trebling our range and
goods and kitchenware. We are investing selling over 15 million in 54 weeks –
in new product ranges under this brand, the equivalent electricity saving of turning
By carbon labelling laundry detergent, such as greener cleaning products, off a power station for three months.
we confirmed that the greatest carbon and also providing advice on how people We have permanently halved the price
impact comes from their use, in can reduce the environmental impact of energy-efficient light bulbs, increasing
particular the energy used to heat the associated with their homes, garden and sales sixfold since 2006.
water and power the washing machine. travel. Our aim is to engage customers
Home insulation
By setting the temperature at 30°C by signposting environmentally friendly
Tesco Home Insulation Service,
or lower, consumers can reduce their products in an easy and accessible way.
introduced in September 2008, is working
carbon footprint.
We will relaunch our informative Greener to help 500,000 customers over the next
Suppliers can reduce the carbon Living website in summer 2009 to make three years. The service aims to cut
footprint of laundry detergents going green more accessible for our five million tonnes of CO2 emissions
by producing them in concentrated customers. We also regularly receive and reduce our customers’ combined
forms as less packaging is needed, over 10,000 visitors a week to our annual energy bill by around £180 million.
and transportation and storage is Greener Living Forum. The service offers fixed cost cavity wall
more efficient. www.tesco.com/greenerliving and loft insulation for just £198 each
(or free to those over 70 or on benefits).
We will use our experience of carbon
We had around 30,000 applications and
labelling products and communicating
completed over 10,000 installations in just
our findings to customers when we
five months after launching the service.
introduce the labels in South Korea
www.tescoinsulation.com
this year.
12
WASTE,
PACKAGING
AND RECYCLING
12 OFFCUT Targets WASTE
We aim to set an example by minimising
leather shoes
Leading by example
• Continue to reduce the footprint of the waste we produce and diverting
To help customers go green on a our existing buildings by 50% by 2020 95% of the waste we do produce away
budget we are the first retailer to (compared with 2006) from landfill. We continue to work with
offer revolutionary £12 ‘E-leather’ • Ensure all new buildings, on average, recycling providers to find new ways to
women’s shoes. E-leather is up emit 50% less CO2e by 2020 compared recycle waste from our operations. In
to 83% recycled leather that is to an equivalent store in 2006 2008 we reduced the amount of waste
unnoticeably different from good • Continue to map the total direct carbon going into landfill by over a third. Each
quality traditional leather but is made footprint of the Tesco business across Tesco store has waste targets that are
from discarded leather offcuts from all the countries in which we operate reviewed and reported against every
tanneries. The manufacturing process and publish this carbon footprint for week. Achieving a balance between
also uses fewer chemicals and recycles all to see product availability and waste is
95% of the water used. • Seek to restrict air transport to less a key part of a store management
than 1% of our products team’s daily routine.
Working with suppliers and partners Delivering products in reusable plastic
• Work with our suppliers to reduce trays has saved 4,000 tonnes of cardboard
emissions related to products in China and 20,000 tonnes in the UK.
Leading a revolution in green Tesco is the largest recycler of cardboard
consumption in the UK and our ‘closed-loop’ system
SUPPORTING • Help customers to understand their means that it is recycled and turned into
earth hour own carbon footprint and what they
can do to reduce it
new boxes within 14 days. The bulk of our
recycling is achieved by our ten recycling
AROUND THE • Bring down the cost of going green, service centres in our distribution
WORLD including through offering more network. These contributed 316, 000
energy-efficient products throughout tonnes of cardboard and plastic to the
In March 2009 we supported WWF’s our Value range total of over 400,000 tonnes of material
Earth Hour by switching off the Tesco • Work with the Energy Saving Trust recycled in the UK, equivalent to 85% of
sign and reducing both in-store and to develop stronger energy-efficiency the total packaging that we produced in
outside lights at iconic stores in China, labelling for our electrical products – 2008. This exceeded our target of 80%
Hungary, Ireland, Malaysia, Poland, from light bulbs to TVs and helped us towards our target to
South Korea, Thailand and the UK. • Promote and incentivise green divert 95% of store waste from landfill.
We also encouraged our customers behaviour through our Clubcard
and staff to ‘sign up and switch off’ Our recycling takes place behind the
scheme
to raise awareness of the importance scenes, but waste in the home is a highly
• Increase the number of footprinted
of tackling climate change ahead of visible subject our customers care about.
products to 500 and communicate
the UN climate summit in Copenhagen We are helping customers reduce their
the findings to customers
in December this year. waste by reducing packaging, providing
• Introduce carbon labels in South Korea
state-of-the-art recycling facilities and
giving clear information about food care
and recycling.
ANAEROBIC
KPI5s0 DIGESTION
OTHERS SAY page
We are reducing waste sent to landfill
“It is not about reducing the waste by trialling anaerobic digestion in a plant
sent to landfill, you need to reduce near our Ludlow store in Shropshire,
waste full stop” – NGO converting waste into an energy source.
Following the success of this trial we are
working with Biogen and have plans for
a number of plants across the UK. This
includes a potential central partnership
anaerobic plant in Leicestershire.
13
1 ENVIRONMENT
EASTER EGG
PACKAGING
For Easter 2009 the major confectionery
brands agreed to follow our guidelines
and reduced the packaging on several
of their highest volume Easter egg lines
by 30%.
Concentrated squash – a Tesco packaging reduction

initiative saving 1,500 tonnes of plastic a year
PACKAGING
A recent study by the Local Government
Association (LGA) found that Tesco had
We remain committed to reducing the
amount of packaging we use, without Chicken
the least packaging by weight of all the compromising product integrity. Our PACKAGING
major supermarkets. packaging policy is based on five key
principles. Packaging should: be fit for
REDUCED
This reflects the hard work we are doing
across the business to reduce unnecessary
purpose; use the lightest weight materials; BY TWO-THIRDS
use materials from the most sustainable
packaging. We have worked with our main chicken
sources; maximise opportunities for
supplier, 2 Sisters, and the packaging
Packaging helps to protect, preserve and recycling and recovery; and be designed
supplier, Multivac, to introduce an
promote the products we sell to ensure to have the lowest carbon impact keeping
innovation in poultry packaging,
that they reach customers in the best in mind the whole product life cycle.
replacing the standard tray and film
condition. By reducing spoilage and
We are collaborating with over 250 pack with a new patented 68% lighter
waste, effective protection of food and
suppliers on over 3,600 packaging shrink-film pack.
other products helps to reduce their
reduction initiatives for both own-label
overall environmental impact. In some Multiplied over our annual sales
and branded products, sharing our
countries, the lack of packaging or of over 30 million chickens this new
knowledge and supporting them to
inadequate packaging in distribution technology has not only delivered
make the right changes. Of our 3,057
causes up to 50% of all food to decay on packaging reduction, but also
own-label packaging reduction initiatives,
before it reaches the consumer. In the UK, on greater sustainability through
2,000 have already been completed.
where food is more efficiently packed, improved logistical efficiency with
only 3% of the food produced fails These projects have resulted in absolute a reduction of 900,000 crates per
to reach the consumer, mainly due savings of over 80,000 tonnes, including annum, meaning 14,000 fewer
to better packaging.* a 19% packaging reduction in own-label pallets and ultimately 540 fewer
dairy products and a 34% reduction in vehicle movements. The new format
We set a target to reduce packaging
own-label produce packaging. represents a large saving in materials
weight by 25% by 2010. Since we started
and cost. Improved shelf life also
working with our suppliers and the We are committed to supporting and
contributes to reduced food waste.
wider industry to reduce packaging it facilitating the evolving debate on
has become clear that this is a complex packaging, with Tesco representatives This new approach to packaging
issue and that weight alone may not be taking leadership roles in organisations has won us the Sustainable Pack
the most beneficial and environmentally such as the Packaging Recycling Action of the Year award at the UK Packaging
comprehensive measure. Whilst we have Group (PRAG) and IGD working groups Awards and a Starpack Silver Star
already made great progress towards to ensure we make the right packaging award for Environment and Innovation.
our target, we are working with suppliers choices for our products. We are also We plan to roll this pack out to other
and experts to understand what is best playing a leading role in a global project meat products.
environmental and sustainable practice through the CEO Forum to develop
for packaging along the supply chain. common definitions and principles of
We have agreed an interim measure metrics for packaging in the context
of reducing our packaging weight of sustainable development.
by 15% by 2010 and will provide a more
For more examples of packaging
comprehensive, long-term target in next
reduction visit www.tesco.com/
year’s Corporate Responsibility Report.
cr-report09/environment/packaging
* Packaging in Perspective, UK Government Advisory
OTHERS SAY
Committee on Packaging, 2008. “The plastic bag debate is the tip of the
In SOUTH Korea we iceberg. It is important for headlines but
reduced packaging it is not the most crucial issue. We need
waste by 30 tonnes in more pressure on manufacturers about
SIX months through the packaging in general” – NGO
Green Mileage Campaign
14
In one year Polish
customers have
used 50 million
fewer carrier bags
Cutting carrier bag use

Since launching green Clubcard points
in the UK in August 2006 to reward
customers who reuse their bags, they
have helped us to save over three billion
carrier bags. We offer customers one
point for every bag saved; over 9.5 million
Clubcard customers have benefited.
Our customers are now using 50% fewer
carrier bags than they did before we
introduced the reward. This is in line
Recycling centre in Malaysia with our commitment along with
six other retailers to reduce the number
RECYCLING RECYCLING of single use carrier bags by 50% between
ON THE GO
Our customers around the world want to May 2006 and May 2009.
recycle and we are helping them to do so.
We provide customer recycling facilities Following the success of our automated We now have a range of bag saving
in all our markets except China and recycling units we have adapted them schemes around the world. For example,
Turkey, where we hope to introduce to create ‘Recycling on the Go’, helping this year we launched green Clubcard
store recycling in the coming year. busy shoppers at our Express stores points in Malaysia. In Poland we launched
to recycle drinks bottles and cans. an attractive range of reusable and
Our Polish stores held waste paper degradable bags made from recycled
collections where customers received materials. In one year, Polish customers
free plants or tree seedlings for bringing have used 50 million fewer carrier bags.
their waste into the store. In Malaysia
we launched a recycling centre at Following a change introduced last year,
our staff in the UK now ask customers
our Ampang store where customers
are paid for recycling according to a REUSABLE bags if they are reusing bags or need a carrier
set price schedule based on tonnage We sell a range of affordable, reusable bag. This has encouraged even more
of recycled items. bags in every country in which we customers to reuse their bags.
In the UK we have recycling centres operate. The range varies from net We believe this approach – encouraging
in 600 of our larger stores. Last year we shopping bags in Turkey, to paper customers to reuse bags and rewarding
helped customers to recycle approximately bags in Poland and jute bags in the them for doing so – is more effective and
200,000 tonnes, saving the equivalent Czech Republic, Malaysia and Slovakia. sustainable than the alternative approach
of over one million bin bags of recyclable In summer 2008 in the UK we launched sometimes advocated of taxing bags or
material from being thrown away. We a range of reusable designer bags charging for them. We believe that climate
have also installed 64 state-of-the-art by Cath Kidston. Each bag was made change will only be tackled successfully
automated recycling machines across the from nine recycled plastic bottles if people are encouraged to change their
country. These machines are a one-stop and we donated 50p from every sale behaviour willingly, and to be enthusiastic
shop for recycling, accepting everything to Marie Curie Cancer Care. Eight champions for a lower-carbon lifestyle.
from carrier bags and plastic to glass and Cath Kidston bags have now
been successfully launched with A bagless delivery option on tesco.com
metal, making recycling quick, easy and was introduced last year which offers
convenient for customers. 900,000 units sold, raising £450,000
for the charity. customers green Clubcard points if they
The machines are popular with customers, choose to have their shopping delivered
attracting around 50,000 visits each week without carrier bags. Around half of
and collecting around 11,000 tonnes of our online customers currently choose
waste a year. Materials are automatically this option.
identified, separated and granulated for
compact storage. The machines can hold TARGETS
roughly four times more waste than an • To cut carrier bag use by 70% by 2010
equivalent standard unit, meaning they • Recycle 95% of our store waste in the
have to be emptied less often – saving UK by 2010
on transport and CO2.
Reusable bag from the Czech Republic
15
1 ENVIRONMENT
SUSTAINABLE
PRODUCTS
Agricultural products and those taken
from the wild have an impact on natural
systems. We recognise that in some
cases this has reached critical levels,
threatening biodiversity. We seek to
avoid such products in our supply chain.
Biofuels Palm oil Timber
We decided to sell biofuels in 2005 as we As full members of the Round Table We are committed to purchasing timber
believed that they could help customers on Sustainable Palm Oil (RSPO) we are and timber products only from legal,
reduce their carbon footprint and decrease committed to using sustainable palm sustainable sources. In the past 18 months
our use of fossil fuels. Since then, in our product range. This year we have we have worked with our tissue supply
EU legislation has made 5% biofuel supported further improvements around base and have moved all of our own-label
obligatory in regular fuels. the environmental standards in the RSPO household disposable paper products –
to reduce the chances of deforestation including toilet tissue, facial tissue and
We have switched the majority of our
and controls on CO2 emissions. We have kitchen towel – to either FSC mixed
distribution fleet to use B50 biodiesel
also joined a coalition of over 50 UK-based sources or FSC recycled status.
containing 50% biodiesel and 50%
companies calling on the industry to stop
standard mineral diesel. We are aware In 2008 we widened our wood and
all deforestation of rainforest and peat
that the impacts of biofuels are complex paper policy to include our marketing
forests for palm oil expansion.
and the environmental benefits depend materials and Tesco Direct catalogues.
on how they are made. We recognise Currently the systems in place for full 90% of papers we now use in marketing
that there is work to do, especially on traceability on palm oil-based ingredients are either recycled, PEFC or FSC certified,
traceability and sustainability of biofuel are in their infancy. We have already two recognised accreditation bodies for
raw materials. We have asked the traced the palm oil and derivatives we use sustainable wood sourcing. The Tesco
Sustainable Consumption Institute back to oil supplied by RSPO members Media Publishing Centre – which prints
to help us understand the long-term and are working with our suppliers to the Direct catalogue, flyers and leaflets –
impacts of biofuels. ensure that certified oil can be used in is fully certified by PEFC and FSC.
our products. Our ambition is to use only
Greenergy, which supplies almost We are currently investigating how
certified palm oil.
50% of our fuel requirements and in to extend our sustainable timber
which we are a shareholder, has been Genetically modified (GM) foods policy to the paper and board used
praised for its work in developing We have a non-GM ingredient policy in our packaging.
biofuel sustainability criteria and for our own-brand foods in 11 of the
audit programmes. countries in which we operate. We sell
www.greenergy.com a small number of branded GM products
in some of these markets. Where we do
sell non-Tesco brand products with GM
ingredients, they are clearly labelled so
customers can make their own choice.
The use of GM feed is prohibited in
organic products. All our own-brand
organic meat excludes the use of
GM feed.
We continue to keep our policy under
review in light of the latest scientific
advice. We believe this is particularly
important because of the global
challenges of food security and
climate change.
In China and the US we do allow
some GM ingredients in our own-brand
products. In the US, due to high levels
of GM soy and maize, it would be virtually
impossible to segregate products according
to whether they did or did not contain
GM ingredients.
16
NURTURE SCHEME
Seafood
We seek to buy all our seafood from
responsibly managed fisheries, to
maintain a viable and long-term future Nurture was launched in 1992 (then
for wild fish and shellfish populations. known as Nature’s Choice), to ensure
Our Fish Sustainability working group, Tesco delivers world-class quality fruit
including technical experts from across and vegetables for our customers.
the business, meets regularly to review It is an independently accredited,
our fish sourcing policies and identify quality standard that assures
priority areas for us to work on with our our customers that Tesco fruit
suppliers to make further progress. We and vegetables are grown in an
have Codes of Practice for farmed fish, environmental and responsible way.
which cover feed, welfare, environment
and other critical issues. These are We were the first supermarket to
independently audited. establish best farming practice for fruit
and vegetables in the UK. Since then
We provide information to our customers the Nurture scheme has evolved and
and have recently added additional we now work with 15,000 growers in
sourcing information on our fresh range 70 countries across the world.
including catching methods.
Our approach with Nurture provides
This year we worked with the International us with the opportunity to pioneer
Fishmeal and Fish Oil Organisation (IFFO) standards around reducing energy
to help develop a Responsible Supply usage, recycling and other natural
Code that will ensure the wild fish used resources.
as feed for our farmed fish come from
fisheries that are responsibly managed. Visit www.tesco.com/nurture for
The Code covers both food safety and more information.
fishery management. Work is currently
under way to develop and trial the Code
and we are continuing to support this
important initiative.
OTHERS SAY
“People don’t know what Nature’s
Choice means. The standard needs
opening up for public scrutiny” – NGO
17
In every country in which we operate we work with
local communities to provide jobs and services and
support local causes. We are committed to being
a good neighbour.
Our stores are at the heart of thousands
of communities around the world.
We always aim to make a positive
contribution to these communities,
both in the way we do business and
by supporting local causes.
Our success depends on listening and
responding to customers and to changes OTHERS SAY
in society. We respond to customers’ “In terms of community investment,
expectations by offering quality products Tesco seems very responsive at the
at affordable prices. We provide good jobs moment. Targeting disadvantaged
and careers for 470,000 people, growing communities in developing countries
the local economies where they live. could help Tesco gain a licence to
Small, regional producers supply a growing operate” – Business organisation
number of locally sourced products.
We invest in many disadvantaged
communities, opening stores which
help to regenerate areas, and offering
opportunities to the people who live
there. In the UK alone, we have now
created over 4,000 jobs for long-term
unemployed people through our unique
jobs guarantee programme.
We fund education programmes around
the world, helping children learn about We provide good jobs for 470,000 people
health and the environment, and donate
equipment to schools.
More than 260 Tesco Community
Champions in six countries are working
in our stores specifically to support local
charities and organisations.
53% of customers agreed

that they often see or hear
about Tesco contributing to
local community or charities
Source: Tesco Image Tracker, UK, January 2009, c920 customers.
19
2 communitIES
Gorton and Cheetham Hill (Manchester),

providing almost 900 jobs, nearly
regeneration
500 of which were for long-term in gorton,
manchester
KPI5s0
unemployed people.
These areas have often suffered Gorton is an area of Manchester
page neglect for many years and can appear that has suffered from the decline
unattractive commercially. Other of traditional manufacturing. With
retailers may be reluctant to invest there. 12% unemployment, a fragile local
However, by providing what customers economy and high crime rate, the area
want and by operating our business badly needed a boost. Tesco provided
efficiently, we have been able to develop the injection of money, jobs and hope
Being a good neighbour successful stores in deprived areas, and to revitalise the local economy.
The biggest way we contribute to any have helped to attract other businesses
to these areas. We worked with the local regeneration
community is through our stores. In 2008
company New East Manchester
in the UK we opened 187 new stores, In our Regeneration Partnership stores Limited to develop plans for a Tesco
providing almost 12,000 new jobs. as part of our recruitment process Extra in Gorton to act as a catalyst for
Building new stores also creates jobs we target local people who have been further investment. The scheme has
through construction. unemployed for at least six months, provided work for 130 local long-term
We listen to people in the community including those with low levels of unemployed people between the ages
from the moment we identify a site for numeracy and literacy skills and people of 17 and 62, most of whom were not
a new store or an extension. We want with disabilities. They attend a special life registered jobseekers. Tesco recruited
to respond to suggestions and concerns skills programme as well as job training. them by distributing thousands
people might have. This does not stop Unlike most other employment schemes, of leaflets door to door, as well
once the store is open – when people we guarantee a job to the people as working with training and
tell us deliveries are creating congestion we select for Tesco training. People employment agencies.
we act to adjust delivery times so they benefiting from the schemes
tell us they find this job guarantee The vision to create a new district
do not clash with busy periods such as the
particularly motivating. centre – which includes a market hall
school run. This also helps to consolidate
and new retail units as well as the
deliveries of our own and suppliers’ Following the success of this approach, Tesco store – received planning
products to Express stores in the UK, we were one of the first companies consent in late 2006 and the store
which are in busy urban areas. For to work with the UK Government opened in October 2008.
example, we have removed 57 deliveries in Local Employment Partnerships,
each week to 19 Express stores in the designed to provide jobs for the
North East of England. long-term unemployed. We are
Noise can also be a nuisance and we have committed to a Local Employment
found several ways to make deliveries Partnership wherever we open a store.
quieter, including switching off fridges In 2008, we won a Best Practice WE CREATED over
in lorries when they arrive at stores and Recruitment award for our new store 24,000 NEW JOBS
automatically cutting off the radio when in Aston, Birmingham, where we hired AROUND THE WORLD
the cab door opens. A new low-noise almost two-thirds of the workforce IN 2008
delivery cage with plastic components through the Partnership. We also won
cuts noise by 10 decibels and we have two North West Local Employment
begun using a low-noise tail lift. Partnership Awards.
Regenerating UK communities
In the UK we have opened stores which
revitalise disadvantaged areas, working
in partnership with local agencies.
Since 2000, when we opened our
first Regeneration Partnership store in
Seacroft, Leeds, we have created jobs for
the long-term unemployed in 20 stores.
In 2008 we opened Regeneration
Partnership stores in Aston (Birmingham),
20
Terry Leahy at Orpington Regeneration Partnership
store ‘topping out’ ceremony
Supporting local economies

The economic and social impact of
UK Competition Commission Inquiry
The Competition Commission reported
FOOTPRINTS
supermarkets continues to be a matter on the UK grocery market in 2008 after OF TOMORROW
of debate, especially in the UK. We believe a two-year investigation. It found that on In Turkey we are helping to explain
our stores help businesses and local the whole, the market delivered a good climate change to young children.
communities. Professor Neil Wrigley deal for customers and that competitive The country has six of the ten driest
of Southampton University pointed to rivalry was alive and well. The Commission cities in Europe and we have stores
several research studies in his evidence to did propose some changes around the in four of them. Water supplies
the Competition Commission that show supply chain and land agreements and could become even more scarce as
a supermarket investment brings benefits we are working with the Commission to temperatures rise and the climate
for the town and local businesses. People put these into practice. alters, so it is important that young
stay in the area to do their shopping people understand what is happening
We did appeal against one of
and visit other local retailers and services, and what they can do about it.
the Competition Commission’s
spending their money locally. The mix
recommendations to introduce a We have worked with Unilever, the
of retailing may alter and some grocery
competition test into the planning educational charity Toçev and the
shops may lose business but other
system. We believe that such a test would Ministry of Education to create a movie
retailers, such as bakers, do well.
have significant negative consequences and a stage play for primary school
Sometimes a new supermarket brings for the industry and for consumers, children. The Footprints of Tomorrow
direct benefits to a run-down area including blocking viable and competitive show is touring major cities, aiming
because it is part of a larger scheme investments. In March 2009 the to reach 100 schools by 2010,
including other properties. For example, Competition Appeal Tribunal upheld spreading the message that ‘Together
in 2008 we developed a site in Orpington our appeal, although this is not the end we can make a difference’. Each child
(south of London) to include apartments, of the process. In light of the Tribunal’s also gets a book to take home and
a medical centre and town centre decision the Commission will now be access to the project website.
parking. We worked closely with the required to review its work on the
local planning authority and the Greater competition test and reconsider what,
London Authority to develop the scheme, if any, recommendations it should make
which is the most significant investment to Government.
in Orpington for years and will bring over
400 jobs to the area when the store opens
in June 2009.
21
2 communitIES
planting trees
In SOUTH Korea in thailand
we have
developed
a network
of 91 culture
centres
with 850,000
members
Tesco for Thais Foundation

In Thailand, we have so far planted
Making a difference Developing young people 3.8 million trees as part of our ‘Plant
We aim to give at least 1% of pre-tax Education matters to our customers 9 Million Trees’ project, aiming to
profits to charity and in 2008 our and our staff. Our employees tell us reach nine million by 2015. The project
contribution was £57 million or 1.9% that helping young people is a priority. is a collaboration between Tesco
(compared to 1.95% in 2007). Thailand, the Ministry of Natural
Sometimes that means support for
Resources & Environment, the
Community Champions specific charities. For example, in Hungary
Foundation for Khao Yai National Park
We now have 266 Community Champions we work with the Smile Foundation to
Protection and the United Nations
in China, the Czech Republic, Malaysia, provide creative art therapy programmes
Environmental Programme (UNEP)
Slovakia, South Korea and the UK, who in children’s hospitals. In Thailand,
which aims to honour His Majesty
dedicate their time to supporting local the Tesco for Thais Foundation raises
the King on his 80th birthday.
initiatives, organisations and charities contributions for the Royal Family’s
as well as national initiatives. charitable projects and supports
education for disadvantaged children.
They know what matters most to people
The Foundation also provides school
in their area and can do something about
scholarships (more than 2,000 in 2008)
it. For example, in the UK our Exmouth
and training in-store for retail management
store Community Champion organised
more than 20 members of staff, family
undergraduates. In 2008, we gave around
250 students practical experience of
CULTURE
and friends in a Sunday morning litter pick
retailing in Thailand. CENTRES IN
along the beach. Staff from Haslingden
helped a school to prepare the ground Equipment for schools SOUTH KOREA
for a vegetable patch and donated money We give schools the chance to get free
towards gardening tools. They visit the equipment and we run the UK’s longest-
school regularly to support their progress running schools voucher programme.
through the ‘Tesco school gardens’ lesson Over the last 17 years, we have donated
plans, through which children learn about approximately three million items of
growing and eventually cooking their own equipment worth around £150 million to
home-grown vegetables. over 35,000 schools and clubs in the UK.
Through our Charity of the Year, our In the UK we have responded to customer
schools programmes and national and school feedback and have merged
sponsorships such as our work with Computers for Schools and Sport for
South Korean Culture Centre cooking classes
Cancer Research UK on Race for Life, Schools to create Tesco for Schools and
we make a significant contribution to Clubs, a single scheme making it simpler In South Korea, we have developed
important causes. But we know that to collect and redeem vouchers. The a network of 91 Culture Centres
our customers also want us to support scheme covers all areas of the curriculum, with 850,000 members and 5,000
local causes and that the best people making it simple for schools and clubs professional instructors. They provide
to identify these causes and how best to choose what they need. more than 350 educational courses,
to support them are living and working for both children and adults, in subjects
in the communities they support. That is such as languages, music and dance.
why we are committed to increasing the In 2008 they went online, launching
number of our Community Champions. an open forum for all Culture Centre
members and instructors. The site had
Our voucher programmes 242,000 visits in the first two months
for schools have donated and has nearly 500 discussion ‘cafes’
three million items of on themes such as ballet, cooking,
equipment worth around dance and crafts.
150 million to over 35,000
UK schools
22
Our success in the UK has led other
countries to launch their own programmes.
Ireland was the first and has run Computers
for Schools for 11 years. Irish schools
have benefited from almost £9 million
worth of equipment including 3,000
computers and thousands of other items
such as scanners, printers and software.
Over 1,000 schools benefited in 2008.
Ireland’s twist on the scheme is to provide Staff dress up for Marie Curie Cancer Care
one school with an ‘extreme makeover’ ________________________________
worth almost £25,000. Scoil Naisiunta Total raised for Charity of the Year
Charity of the Year
Muire na nGael, Dundalk, was the lucky around the world Alongside our local charitable giving
winner in 2008, getting a full makeover of ________________________________ and our emergency giving, we also have
its computing and interactive equipment. Czech Republic
a Charity of the Year in seven countries.
Children Line £73,000 This gives one charity the opportunity
This was the seventh year of Tesco for to be the focus of our staff and customer
Schools in Poland. Nearly 25,000 schools Hungary
fund-raising each year and is a key
Ability Park £40,910
participated in the programme and relationship for us. The charity receives
6,500 schools qualified for prizes worth Ireland
a very significant donation through a
£1.1 million. Schools could choose Make-A-Wish £1,100,000
wide range of staff fund-raising activities
from 64 different prizes included in our Malaysia (with a 20% corporate top-up in the UK)
catalogue. The most popular prizes were MAKNA
and customer donations.
stereos, volleyballs, footballs, books and Cancer Research £65,533
digital cameras. Poland We always aim to develop long-term
The Happy relationships with our Charity of the Year,
This year our US business launched Shop Kids Foundation £192,004 and to continue contributing after our
for Schools. It is open to any accredited formal relationship has ended. So, for
Slovakia
kindergarten or primary school within Children Line £81,000 example, the British Red Cross became
a three-mile radius of a store. The school our official emergency partner this year,
UK
in each state that raises the most money helping us make swift and efficient
Marie Curie
receives almost £3,000 as a cash bonus Cancer Care £6,200,000 donations when disaster strikes abroad,
from Fresh & Easy. ________________________________ following on from a successful Charity
Total £7,752,447 of the Year partnership the previous year.
Staff in Ireland marked International
Guinness World Record Day by setting
a record for the ‘Largest image made
with LED tea lights’. The successful record
attempt was supported by Walt Disney
International, helping to light a 37-feet
Donald Duck image using 26,978 individual
tea lights. The remarkable effort raised
£16,653 for Make-A-Wish, a charity working
with children who have serious illnesses.
Promoting active lifestyles
See page 36 for information on how
we also encourage people to get active.
TARGETS
• Raise £5 million across all our markets
through staff and customer fund-raising
• Grow Culture Centre members in
South Korea to 962,400
• Organise at least 750 community
activities in stores or offices in China
• Hold 150 community events in Poland
• Extend educational project on global
warming to 7,000 students in Turkey
• Plant 950,000 more trees in Thailand
23
We have high expectations of our suppliers on both a local
and global scale. By working in partnership with them we
deliver the quality, value and ethics our customers expect.
OVER 90% of suppliers
around the world say we
treat them with respect
Supplier relations
One of our core values is to treat people
how we like to be treated, and we aim to
demonstrate this in our relationships with
suppliers of all sizes and types. We listen
to suppliers to make sure we understand
their views, and share customer views
with them so they fully understand the
market for their products.
We have thousands of suppliers from In 2008, over 2,300 suppliers covering UK Code of Practice
around the world, ranging from farmers all our markets responded to our We follow voluntary and statutory codes
and small companies delivering a single first Group-wide anonymous supplier of practice including the UK Supplier Code
product directly to a few local stores, survey – Supplier Viewpoint. The survey of Practice introduced by the Office of
to large multinational companies whose confirmed that we generally live up to Fair Trading in 2001. This was introduced
products we stock in all our markets. our values and standards: to regulate dealings between supermarkets
and their grocery suppliers and currently
Our customers want the best quality, • 91% say we treat them with respect;
applies to the largest four supermarkets
choice and value for money. To provide • 93% say we are professional;
in the UK. It covers issues such as dispute
this we need strong and constructive • 92% say we are clear in our dealings
resolution, changes to agreed prices,
relationships with reliable suppliers. with them;
and promotions and training.
We build long-term relationships with our • 90% say we are reliable at paying
suppliers, as we recognise that our success on time; Following on from a Competition
is linked to theirs. We therefore expect • 92% say we are committed to meeting Commission inquiry into the groceries
to offer fair terms and conditions while customer requirements; and industry that ended in 2008, the Code
getting the best value for our customers. • 92% say we maintain high quality of Practice will now be extended to
standards. cover all retailers with a grocery turnover
Suppliers are required to meet our
greater than £1 billion and we expect
expectations on quality and value – Participating suppliers also provided
some changes will be made to existing
as well as on hygiene, environmental, suggestions for improving our
provisions in the Code.
animal welfare and labour standards. relationships. Specifically, they think we
could better communicate our business We train buyers to comply with the Code
plans, and work across functions within in their daily work, and to resolve any
Tesco to solve problems. issues in ways that work for suppliers
and for Tesco. Suppliers can raise
In the UK we have run the Supplier
any issues they have with our buyers.
Viewpoint survey since 2005. Over 90%
If necessary, they can contact more
of UK suppliers said we were trustworthy,
OTHERS SAY consistent, clear, helpful, respectful
senior management, and most issues
are resolved at one of these two levels.
and committed to meeting customer
“So much comes down to individual Tesco was the first supermarket to
requirements. The survey also records
buyers as to whether the supplier appoint a Code Compliance Officer in
negative experiences:
has a good experience. We’ve had 2005, to act as a confidential contact
a fantastic experience over the • 5% say we are disrespectful point for suppliers with unresolved
past two years – better than with (8% in 2005); issues relating to the Code. In 2008,
any other retailer” – Supplier • 15% say we are slow (25% in 2005); and there were no complaints made to the
• 10% say we are unreasonable Code Compliance Officer.
(26% in 2005).
Although we strive for excellent

relationships with all of our suppliers,
we are encouraged by the reduction in
the percentage of suppliers who find that
dealing with Tesco is a difficult experience.
We are always working to improve our
relationships with our suppliers and we
will continue to do so over the next year.
25
suppliers
3 & ethical
trading
dairy farming
update
In our 2008 CR Review, we described
our progress in setting up the Tesco
Sustainable Dairy Group (TSDG).
In September 2008, we collaborated
with the University of Liverpool to
launch the Tesco Dairy Centre of
Excellence. The Centre provides the
latest information on dairy technologies
and tests new ideas. It provides expertise
Tesco Supporting UK farmers
Our UK business sources fresh meat and
in cattle health and welfare for farmers
Sustainable poultry from within the country where
in the TSDG, and teaching services at
the University. We will use the Centre’s
Beef Project possible. Our size means it is difficult work to engage with schools and
for us to source all our meat in the UK colleges, farmers, consumers, industry
The Tesco Sustainable Beef Project, because overall supply is insufficient. and campaign organisations.
launched in 2008, communicates We work with farmers to increase
science-based approaches to beef available supply. The TSDG’s objectives for 2009 are to:
cattle farming among our suppliers, • Research management procedures to
to improve productivity and Our Producer Clubs meet regularly to
share information that will help suppliers improve health, production efficiency
profitability as well as the tenderness and economic benefits.
and flavour of our beef. Working with and producers understand customer
trends so they can plan their activities. • Establish cost-effective farming
industry-leading vets, scientists and practices that improve returns
farm business analysts, we believe We share consumer research, sales trends,
planned promotions and the success for Tesco and producers, without
we can improve animal welfare, penalising the consumer.
meat quality and environmental of previous promotions. Tesco team
members attend the meetings so farmers • Trial methods to eradicate digital
practices across the beef industry. dermatitis in cows.
can challenge decisions and ask questions
We help suppliers develop business to help them understand our business • Produce disease management
plans to deal with current economic more clearly. plans and eradication procedures
challenges, and all suppliers have for TSDG members.
access to Tescolink, an online sales By working with our suppliers to help • Investigate ways to reduce the
information system. If the recession them extend the growing season carbon footprints of farms.
causes customers to change their we have, for example, reduced the
habits, such as by buying standard amount of strawberries we import from
produce rather than organic, 25% to 14% over the last five years.
we will work with organic suppliers on Buying British in 2008
promotions to help sell surplus stock.
Maintaining the right balance is a Product % British
constant challenge, as customer buying
habits can change more quickly than Fresh chicken 90%
our suppliers can sometimes adapt.
OTHERS SAY Fresh beef 95%
“How can Tesco balance its different
customer groups, for example providing Fresh pork 80%
an affordable range of chickens that’s
very important to some people – cheap, Fresh lamb 80%
healthy, low-fat, high-protein food –
but which conflicts with ethical Fresh eggs 100%
consumers whose expectations
are different?” – Investor Fresh milk 100%
26
Sales of
Willow
Farm
chicken
increased
86% year-
on-year We offer a wide choice to meet the
diverse requirements of our customers,
from Finest to Organic, standard and
Value including a more affordable
Freedom Food alternative, Willow Farm.
We appreciate that some organisations
take a different stance on welfare and
would like us to ban certain products
outright, such as eggs and poultry
from intensively-farmed hens. We
meet regularly with these and other
organisations to discuss animal welfare,
Animal welfare
We are the only major supermarket
understand their views and communicate
our work. Our approach is to engage all Raising fish
to have a dedicated team of agriculture our customers, ensure they can feed their welfare
experts who review the latest science families properly on tightening budgets,
and give them all the information and
standards
on animal welfare and farming standards,
ensuring our codes of practice (which choice they need to move to higher in Vietnam
were first introduced over ten years ago) welfare products as and when they are In 2008, we introduced our white
are in line with latest thinking, and able to do so. This approach has been fish code of practice to fish farmers
working with suppliers to improve successful, with sales of our Freedom in Vietnam.
standards. Whether customers buy Food Willow Farm chicken, for example,
Value or Finest, we insist on high levels up 86% year-on-year. Tesco representatives travelled to
of welfare throughout the supply chain. Vietnam to meet with farmers of the
For more information on our Pangasius (Vietnamese river cobbler)
We require farms supplying all our ranges animal welfare standards visit fish and agree a commitment to higher
to meet our livestock standards and codes www.tescofarming.com/livestock- fish welfare standards. Since then,
of practice. All our products including standards we have held on-site welfare training
Value products have the Red Tractor Monitoring animal welfare for all farm employees responsible for
standard as a minimum standard. Red We are the only one of the major the fish’s welfare. We also designed
Tractor is the standard most recognised supermarkets to carry out independent and trialled a bespoke stunner for the
by customers, and is widely used across audits above the minimum industry Pangasius. The results look positive
the supermarkets. Where these standards standards to ensure these standards are and we hope to approve this method
differ, for example on Organic products, being met. All meat and poultry suppliers in early 2009. These methods have
we clearly label them. to our UK business are inspected at least been independently verified by the
annually by Integra FoodSecure, an Fish Vet Group.
independent, accredited audit company. These steps mark progress for
The majority of these inspections animal welfare in Vietnam and for our
are unannounced. partnership with Vietnamese Pangasius
We have simple and robust monitoring farmers. This is a great example of
processes in place to ensure our livestock our commitment to building long-term
standards are effective. In 2008, we supplier relationships that emphasise
reviewed these standards and added good welfare practices.
new indicators that measure outcomes
rather than just the implementation
of the standards.
Progress outside the UK
When we source meat from other
countries for sale in the UK, we insist on
the same standards we require from UK
farmers. For example, we do not allow
the use of sow stalls in pig production
anywhere. We have improved welfare
standards at 14 poultry suppliers in
six countries, accounting for about
95% of our overseas poultry purchases.
27
suppliers
3 & ethical
trading
Sales of
locally
WHAT DO WE Ethical trading
sourced MEAN BY A LOCAL The products we source from around
products PRODUCT? the world offer choice and value to
increased our customers.
by 30% year- In England, we class a product as local
Providing excellent value for our
on-year in if it is produced in that county or a
customers means sourcing the best
the UK neighbouring one. We source Scottish,
products from around the world –
Welsh and Northern Irish local products
from within those areas. These strict at the best prices. This helps families
criteria mean some local products may stretch their budgets further, brings
only be available in one or two stores. more products within the reach of
Products may be famous, iconic lines ordinary people, and helps to drive
or simply produced in that area to be economic growth.
Local sourcing
Many customers want to buy products considered local. Local products can To deliver this, we source from many
that support their local businesses and be branded or unbranded. countries around the world. We believe
economy, particularly in the current that international trade helps people in
economic climate. They are also developed and developing countries
concerned about food miles and the improve their quality of life, creating jobs
environmental impact of the products and raising standards. The extraordinary
they buy. record of export-led growth and poverty
reduction in China and other parts of Asia
In Poland, we currently work with bears testimony to this.
almost 200 local and regional suppliers LOCALLY
to our bakery, dairy and cured meat
departments. Every year we organise
SOURCED At the same time, we recognise that
regulation and levels of enforcement
and promote Polish fruit and vegetable SCOTTISH of labour standards vary in different
products at supplier events and have now
created a special logo for Polish products,
POTATOES countries. Our ethical trading policy
and programme applies to every country
‘I am from Poland’, which will be on Polish from which we source, including the UK,
Tesco brand and Discount Brand products. identifying risks and helping our suppliers
to address them.
In the UK, our network of regional
buying offices have dedicated buying, Our approach to ethical trading has
marketing and technical teams. We stock five stages: setting and communicating
approximately 3,000 local lines and work standards; monitoring supplier
with over 480 local and national suppliers. performance; addressing problems where
In 2008, local produce accounted for they arise; building capacity to prevent
£624 million or 2.2% of UK sales, problems; and working with others to
compared with 1.7% the previous year. tackle the more complex and systemic
This is a 30% increase in sales compared In summer 2008 our Tesco Scottish problems we cannot address alone.
to 2007. office worked with producers to deliver 2008 was a particularly important year
more local and seasonal products on ethical trading. We strengthened our
Sales data confirm the demand for
to Scottish stores. Ten local Tesco independent audit programme, giving
local produce. In the summer, we sold
stores around Edinburgh received us even better oversight of conditions for
5,400 packs of local watercress per week
Vales Emerald potatoes from Luffness workers throughout our supply chain and
in stores in Hampshire, where it is
Mains, East Lothian, within a few hours enabling us to improve them. We worked
grown, compared with national sales
of harvest. hard to ensure the 450 new products
of 2,800 packs weekly – a remarkable
93% increase. brought to market for the launch of our
www.tesco.com/regionalsourcing Discount Brands offered exceptional value
without compromising our robust ethical
trading requirements.
Targets
• Increase sales of local products to
£1 billion by 2011 in the UK OUR DIRECT SUPPLY CHAIN
PROVIDES JOBS FOR
1.8 MILLION PEOPLE
AROUND THE WORLD
28
OTHERS SAY
“It’s good to see there’s been a change
in communications and strategy
regarding ethical trade and suppliers.
These issues seem to be taken much
more seriously within the business,
and a lot more is happening” – NGO
We aim to undertake independent

audits of those supplier sites identified
as high risk every year, and medium risk
every two years. Low-risk sites are
required to complete an annual
self-assessment, which we monitor.
In 2008, we risk assessed 100% of sites.
THE ETI Setting and communicating standards
We only work with suppliers who share
We increased the number of high-risk sites
audited to 87% (up from 73% in 2007),
BASE CODE our values and demonstrate commitment and audited 71% of medium-risk sites
to the ETI Base Code. We evaluate within the last two years. There is further
As a founder member of the Ethical
potential new suppliers to ensure they progress to be made and we have put in
Trading Initiative (ETI), we expect all
understand these standards and have place resources to improve performance
our suppliers to meet the standards
the ability to meet them. We will not in 2009.
set out under the ETI Base Code and
guarantee their workers the rights work with a supplier if we identify major We made good progress to improve the
within it: problems at this stage and cannot quality of audits across our supply chain,
resolve them. to ensure the information they provide
• Employment is freely chosen
Over the past year we have begun is consistent and reliable. We launched
• Freedom of association and
to consolidate our overall number of our Auditor Recognition Programme
the right to collective bargaining
suppliers. Having fewer suppliers gives in January 2008 to achieve this and,
are respected
us an opportunity to ensure firm and over the year, vetted and approved
• Working conditions are safe
long-term relationships with our supply 726 auditors from 11 audit bodies. These
and hygienic
chain, and gives our suppliers even more give us global coverage from competent
• Child labour shall not be used
confidence to invest in improving their and credible individuals who speak the
• Living wages are paid
products and their working conditions. native language of the country.
• Working hours are not excessive
• No discrimination is practised In 2008, in response to supplier feedback, In 2008 a total of 1,819 independent
• Regular employment is provided we revised our guidelines for ethical audits were carried out on suppliers
• No harsh or inhumane treatment trading and issued a new, accessible to our UK business.
is allowed Code of Practice so suppliers can be Announced audits help to ensure all
www.ethicaltrade.org absolutely clear on our programme necessary records will be present and
and expectations. build ownership of ethical issues by
Monitoring supplier performance supplier management. But they can
With a large and diverse supply chain, also be subject to a greater degree of
we know that some suppliers will not, preparation – occasionally in an attempt
to manipulate findings. To balance this,
SEDEX on occasion, maintain the high labour
standards we expect. In order to help we introduced semi-announced audits,
The Supplier Ethical Data Exchange suppliers address problems and which are now used for 90% of our
(SEDEX) is an independent, online, to support them in improving labour high-risk sites where a supplier is given
not-for-profit database through which standards, our first step is to ensure a one-month window during which
ethical data about suppliers can be we know what is going on, by gathering the audit will take place, rather than
shared. It significantly improves the detailed feedback on conditions in an exact date.
transparency of retailers’ supply chains the farms and factories our suppliers We continue to carry out a programme
– and makes suppliers’ lives easier – run around the world. of completely unannounced audits as
by ensuring one agreed set of criteria a double-check against other findings.
As we are not able to monitor all our
is reported on. Information on each In 2008, we carried out 135 such audits
suppliers’ sites all the time, we take a
supplier can be accessed by all retailers in Bangladesh, China, India, Romania,
risk assessment approach to information
who source from them. Tesco helped Sri Lanka and Vietnam.
gathering. We assess all direct supply sites
found and develop SEDEX.
to all our businesses around the world.
For suppliers to the UK business we use Tesco buyers
risk assessment tools including the received
independent SEDEX – which store more than
detailed information on gender, ethnicity, 2,400 hours
languages spoken and permanent of training
and temporary workers – and we on ethical
are rolling these out across our trading
international businesses.
29
suppliers
3 & ethical
trading
Addressing problems FAIRTRADE

We always ensure action is taken
when audits identify major breaches PRODUCTS
of the ETI Base Code. Following an audit
report, suppliers must address every
non-compliance identified and develop
improvement plans. We follow up these
plans and have them independently
verified or request further improvements Improvements made
as required.
In addition to reports by auditors,
by suppliers against the
breaches of the Code can also be ETI Base Code
reported by suppliers themselves,
workers, non-governmental organisations Employment freely chosen 23.9%
Freedom of association 1.1% We are committed to making ethical
and trade unions. We investigate any
Health and safety 23.9% products available to everyone at
such reports immediately. We have also
Child labour 1.6% affordable prices, including Fairtrade
been piloting a whistle-blower scheme
Pay 20.8% products. In 2008, our UK stores carried
in China which provides an anonymous
Working hours 19.8% 188 Fairtrade products including
additional channel to report any concerns.
Discrimination 1.8% 117 Fairtrade-labelled Tesco own-brand
Our priority is to ensure there is no child
Regular employment 6.2% products, ranging from coffee and
labour, forced or bonded labour, or any
Harsh treatment 0.8% cotton to fresh and dried fruit. We also
form of abuse in our supply chain.
stocked 71 branded Fairtrade products.
The most serious problems are relatively Despite the economic downturn
rare. In a direct supply chain of 1.8 million Notes on chart our Fairtrade range enjoyed 2.3%
workers, there were three reported This chart shows the areas in which year-on-year growth.
instances of child labour and one of improvement actions were undertaken
We have been developing Fairtrade
forced labour in 2008. We followed by our suppliers against the different
cotton clothing since February 2007,
up all these reports immediately and elements of the ETI Base Code. It is derived
and now sell five million items a year –
ensured appropriate action was taken from data from our robust independent
at no extra cost to our customers –
– which, in the case of child labour audit programme, which is focused on
compared to non-Fairtrade cotton
reports, meant ensuring the child had the highest-risk countries and sectors.
products. Sales have increased
ceased work as soon as discovered,
Improvement actions can both strengthen fivefold in the last year, and we were
that the supplier’s systems are tightened
systems and address specific problems. the world’s second biggest retailer
to avoid recurrence, and best practice
For issues such as employment freely of Fairtrade cotton.
in supporting the child is followed –
chosen, which includes ensuring workers
generally including the guarantee To grow the market for Fairtrade cotton
are not required to lodge deposits with
of a job once they turn 16. clothing further, we are making it easier
employers, procedures are reinforced to
for producers and manufacturers to
We expect suppliers to implement reduce the risk of future cases. It is similar
buy Fairtrade cotton, helping to support
improvement plans as soon as possible for child labour, where measures to verify
over 19,500 cotton farmers worldwide.
and complete all actions within six age are a key priority.
We have worked with the Fairtrade
months. Our emphasis is on assisting
For issues such as health and safety, there Foundation to identify supply routes
improvement rather than simply policing
are a number of detailed requirements from field to factory, and continue
deadlines. We only stop working with
which must be met to achieve full to work with the Fairtrade Labelling
a supplier if they continually fail to
compliance, including on handling Organisation to simplify its systems
meet our standards and refuse to take
machinery, building layout and staff and accreditations.
corrective action. In 2008, we ceased
access to facilities for food storage.
trading with 11 suppliers because of
ethical trade issues, the same number Data are for 2007 and verified by the
as in 2007. ETI. The ETI will also verify our figures
for 2008, although not by the time of
publication of this Report.
30
KPI5s0 RAISING
page
STANDARDS
IN COTTON
PRODUCTION
We were the world’s first major retailer
to ban Uzbek cotton in our clothing
and home textiles. This was a last
Working with others resort, following years of research
We recognise that some countries we into poor environmental practices
source from face complex and systemic and the continued use of government-
problems. To tackle these we need organised forced child labour in
to work in partnership with others. the industry.
For example, we took part in the ETI
We want to be certain where our
Supervisor Training project, which
cotton comes from and that our
culminated in a successful pilot to tackle
suppliers uphold the ban on Uzbek
sexual harassment on farms in Kenya.
cotton, and have adopted tracking
ETI peers elected Tesco representatives systems to ensure this. We have
Building capacity
to chair two specialist groups for 2008. proved, for the first time ever, that it is
We develop the skills and capabilities of
We were involved in other ETI working possible to trace the country of origin
our buyers, technical teams and suppliers
groups on China, homeworkers, of conventional as well as Fairtrade
so they have the know-how to improve
wages and purchasing practices. Tesco cotton. We plan to roll out the tracking
labour standards in our supply chain.
representatives led a working group system to our entire UK cotton supply
We revised our core training programmes at the ETI Conference in October, and chain during 2009, so we can trace the
for buyers and for technical managers in appeared in awareness-raising DVDs. country of origin of all cotton in our
2008. These courses are mandatory for clothing and home products.
We continue to sit on the board of SEDEX
all new starters. Tesco employees received
and contributed to its working groups In 2008, we were recognised for
more than 2,400 hours of training on
on audit methodology, risk assessment our industry-leading efforts in
ethical trading during the year.
and system development. We chair the cotton sourcing at the ethical fashion
We tailored our core supplier training Global Social Compliance Programme, event, Re:Fashion. We were highly
in 2008 following feedback that our an important initiative to drive global commended under the Re:Cotton
workshops could be more specific to best practice. Award and were the only major retailer
local conditions, enabling greater sharing to be nominated in any category.
We also chair the MFA Forum Bangladesh
of experience and best practice. We ran
Working Group. This has sought to Director of the Environmental Justice
16 one-day workshops in Bangladesh,
ensure that Bangladeshi labour rights Foundation, Steve Trent, commented,
China, Costa Rica, Egypt, India, Israel,
activists are treated fairly and pressed “Although it has taken time to
Malaysia, Poland, South Africa, Turkey
their Government to reconvene the implement a credible ‘track and trace’
and the UK. These were facilitated in
national wages board that secured a mechanism within Tesco’s cotton
local languages by expert trainers and
major minimum wage increase in 2006. supply chain, the detailed approach
sought to deepen understanding of labour
they have taken to doing this presents
standards and the business benefits
a benchmark which other retailers
of improving them, as well as providing Targets need to live up to”.
practical guidance. • Provide tailored training for at least
300 suppliers facing challenges on
We also introduced a confidential,
issues including forced, child and
independently facilitated feedback
migrant labour
session at the end of each workshop.
• Develop in-country capacity to support
In these, suppliers asked for clearer
poorly performing suppliers to improve
guidance and communication on
our processes and spoke frankly about
our purchasing practices. Consolidated
feedback was given to commercial
directors and will inform our work
on purchasing practices in 2009. 100% of sites
Other activity in 2008 included co-hosting
were risk
– with the NGO Banana Link – roundtable
assessed
discussions between unions and banana
producers in Costa Rica. We also held
a productive five-day conference in
Cape Town where we worked with supply
chain representatives, auditors, trade
associations and non-governmental
organisations to revise our South African
ethical trading programme.
31
By providing healthy choices, good
information and opportunities to get
active in communities, we can help our
customers lead healthy lives, wherever
they are in the world.
Product ranges and information are the
keys to choice and in 2008 we continued
to make it easier for customers to live
more economically and more healthily.
Malaysian nutritional labelling
Our health strategy has three parts:
• to provide better information on the Our nutritional labelling policy
nutritional value of products, and how Customers want clear information telling
customers can improve their health; them what is in a product and we were
• to make healthy options more the first retailer (in 2005) to introduce
accessible through price and a front-of-pack label in the UK showing
promotions, healthy ranges, and by guideline daily amounts (GDAs).
reformulating our products; and
This year we exceeded our Group target
• to make it more attractive to lead
to increase the number of eligible own-
an active lifestyle.
brand lines with front-of-pack nutritional
We continue to make food more labelling to 78%, with 92% of eligible
affordable for customers. This matters lines labelled. We reached 100% in most
now more than ever, and in 2008 we countries, with four countries still working
launched a new range called Discount towards this target. The Czech Republic,
Brands. It includes 450 great value lines Hungary and Slovakia plan to reach
in the UK and over 300 in our Central 100% in 2009. Nutritional labelling is
European businesses. They can save a Community Plan project in South Korea
UK customers up to £24 on a typical this year, where we plan to label 95% of
weekly shop. eligible products by the end of 2009/10.
We also made it easier for customers Almost all Tesco packaged food in
to live healthily by extending healthy the UK, over 7,000 lines, carries these
living ranges, by providing straightforward signposts on the front of the pack.
health information, by increasing The few exceptions include alcohol
the number of in-store pharmacies (where we have a specific health label),
and opticians, and by promoting flour, sugar and pure water, as well as
active lifestyles. gifts and products with labels too small
for the GDAs to be legible.
www.tesco.com/health
OTHERS SAY
“There are too many labelling schemes
and this is confusing” – NGO
33
customer
4 choice &
Health
Nutritional labelling in the Czech Republic
GDA signposts cover calories, sugar, fat,

saturates and salt. They tell customers
how much they will eat in one serving
of the product, shown as grams,
and the percentage of the guideline daily
amount for a typical adult. The figures
are based on work carried out by the
IGD, the Institute of Grocery Distribution.
We think that GDA labels provide the
most accurate, consistent and factual Light Choices in Hungary
information and research shows that fruit and veg Healthy ranges
it better enables customers to make on a budget We offer a wide range of competitively
in the US
informed decisions. It can also be applied priced products and have improved
to all relevant products, whereas the nutritional content in all our foods. This
traffic light system developed by the UK In the US in January we introduced is nothing new. We launched our Healthy
Government’s Food Standards Agency 98-cent Produce Packs in response Living brand in the UK in 1985. These
(FSA) was designed to apply to only seven to customers looking for fresh fruits products contain no hydrogenated fat
food categories. GDA labelling is being and vegetables on a budget. Since or artificial sweeteners and have limited
adopted by leading manufacturers and then, produce sales have increased saturated fat, sugar and salt. We added
retailers across Europe – making it simple by 11%. The 98-cent Produce Packs the Light Choices brand in 2007, providing
for customers to directly compare the are delivered fresh every day to stores reduced calorie, fat and sugar options
nutritional profile of the widest range and give customers a choice from for customers wishing to limit their intake
of products of any labelling system. six different fruits and vegetables while still eating a tasty and varied diet.
Customers have shown that it works that rotate depending on seasonality
Following their success in the UK, we are
by changing their buying habits. and availability.
now rolling out these brands across our
Sales of lower-fat ready meals increased markets. Nutritionally balanced, diet
when GDA signposts were added, and/or organic ranges are now available
outselling higher-fat alternatives by more in seven countries.
than 7%.* The products with the highest Fresh fruit and vegetables are an
fat levels showed strong sales declines. important part of a healthy diet and
Similar results were found for salt – on average our superstores stock almost
with lower-salt ready meals outselling 1,000 different items – twice as much as
higher-salt products by 10% when GDA ten years ago. We also sell many tinned,
signposts were added.* The products with frozen and dried foods such as fruit
the highest salt levels also showed strong and vegetables, beans, pasta and rice,
sales declines as customers switched to including approximately 200 wholefood
healthier options. products. These are important, affordable
healthy foods because they are naturally
* W
eekly sales eight weeks before, and eight weeks after,
GDA signposts added.
low in fat and salt. Our Value range
includes many low-cost healthy choices,
including skimmed milk, skinless chicken,
pasta and fruit such as mangoes
and kiwis.
34
All our products
IN THE UK are now
free from benzoate,
artificial flavours
and artificial colours
CHANGE4LIFE
Customers have told us they want fewer In the UK we support the Change4Life
Product reformulation additives in their food and after further movement, which brings together
Reducing salt, sugar and saturated fat is progress in 2008, all our products in the Government, businesses, NGOs and
also an important part of a healthy diet. UK are now free from benzoate, artificial others to engage and incentivise people
We have been cutting levels of these flavours and artificial colours, with the to ‘eat well, move more, live longer’.
nutrients across our ranges since 2005, exception of one shandy, which we are
without compromising on flavour. In To do this, our Community Champions
still working on.
2008, we reformulated 1,000 products will help local people to identify ways
to improve their nutritional content, We have also removed all the their communities can eat healthily and
and seven of our markets have a formal colours which the FSA advises (in its get active and run events to support the
product improvement policy in place. Southampton Study †) are linked to campaign. We have already run a Get
All Fresh & Easy brand products contain hyperactivity in children, including Active promotion on exercise equipment,
no added trans fats, no artificial colours tartrazine in mushy peas. We have using point-of-sale material featuring
and no artificial flavours. gone further than other retailers in using the Change4Life logo and featured an
natural flavours in smoked products and article on Change4Life in the January/
Excessive salt can contribute to raised replacing synthetics such as vanillin with February edition of the Tesco magazine,
blood pressure and we have removed natural vanilla in all of our chocolate. the UK’s largest women’s magazine with
3,000 tonnes from our products in the a circulation of over 5.5 million. Online,
UK since 2005, including 145 tonnes from Promotions
we put links to Change4Life’s ‘How are
ready meals. This is more than four million It is not enough just to have healthy
the kids?’ questionnaire on our health
750g packs of salt. The average Tesco products on our shelves. It is also
website and included information on the
ready meal already contains 10% less important to promote them vigorously.
campaign in March’s monthly health
salt than the 2010 target set by the FSA. We run over 200 promotions on healthy
email, reaching 250,000 customers who
products each week, including fresh
Saturated fat has been an important have expressed an interest in finding out
produce, fish, wholefoods and our
target because of its impact on heart about health offers and ideas. As well as
Healthy Living brand, helping to make
disease. We have removed over 2,500 our customers, we will target our
a balanced diet accessible to everyone.
tonnes from products since 2005 through 300,000 members of staff in the UK
improvements such as using leaner We have increased the number of through articles in The One, our
cuts of meat and lower-fat dressings and promotions we run on produce, updating internal newspaper.
sauces in our ready meals. For example, our ‘Fruit and Veg Price Pledge’, and now
our sandwiches have mayonnaise with run up to 100 promotions on produce
35% less saturated fat than previously alone each week and over a quarter of
and we also sell more sandwiches what we sell is sold on promotion.
containing no butter. We supported the To make sure we keep making it easier
launch of the FSA saturated fat campaign for customers to choose healthier food,
with in-store and online advertising. all our markets, except the UK which has
targets supporting Change4Life, have
a 2009 target for the number of events
on their trade plan to promote healthy
products, choices or diets in stores.
† Chronic and acute effects of artificial colourings and
preservatives on children’s behaviour, University of
Southampton, September 2007.
35
customer
4 choice &
Health
OTHERS SAY
“Most promotions are for unhealthy
foods. Changing promotions policy
is the most effective way of
addressing health inequalities.
Fatty, high-salt foods are cheap
GET HEALTHY WITH and heavily promoted” – NGO
TESCO LOTUS
Football tournament in South Korea
In 2008 alone ‘Get Healthy with Tesco
Promoting active lifestyles Lotus’ has inspired 2.4 million people __________________________________
We work with a wide range of partner to join events we support, such as Total no. of people getting active with Tesco
organisations internationally to get aerobic competitions, football clinics __________________________________
people active. Customers have responded and walkathons. China
spectacularly. For example, since the launch Store/Company sponsored events
of the ‘Get Healthy with Tesco Lotus’ Staff tournaments/teams 7,998
project in 2007 our Thai business has Cancer Research UK’s Race for Life is a Czech Republic
inspired 3.6 million people to join events good example of getting people active Run for Life 3,000
we support, such as aerobic competitions, while raising funds for a good cause: Malaysia
football clinics and walkathons. we helped raise over £40 million in 2008 Walk for Life 6,000
when 18,000 Tesco staff joined 687,000
In South Korea we have focused on Poland
women in this series of events around the
building skills through a nationwide Youth Run with Tesco 2,700
country. Tesco has supported this event,
Football Tournament. The tournament South Korea
which is the UK’s largest women-only
promoted health for children and was Youth Football Tournament 5,000
fund-raising event, since 2002. It inspires Hobby clubs 19,814
organised with the MBC Football
women to come together to walk, jog or Culture Centre classes 210,613
Foundation that covers 180 leagues with
run 5 km and raise money to help beat
5,000 children. The outstanding players Slovakia
cancer. Similar events (Runs for Life) Run for Life 1,950
and coaches won a visit to the UK.
raised money for cancer research in the
Thailand
Getting kids active has also been a target Czech Republic, Poland and Slovakia. In Get Healthy with Tesco Lotus 2,400,000
in the UK, where 750,000 children from Malaysia more than 6,000 people joined
Turkey
more than 3,000 primary schools took in a Walk for Life in collaboration with the Aerobic activities
part in the Tesco Great School run in National Cancer Council (MAKNA), our Staff tournaments
2008. By 2010, we aim to get a million Malaysian Charity of the Year. The event Football tournament 2,258
children active through our FA Tesco Skills raised almost £30,000 for MAKNA’s work UK
Programme, which provides top-quality on cancer research and awareness. Race for Life 687,000
football skills coaching for boys and girls. Tesco Great School Run 750,000
For more information on our Get Active Other activities 562,977
programmes visit www.tesco.com/
__________________________________
cr-report09/customerchoice/active
Total 4,659,310
Our Thai business

has inspired
2.4 million people to
get active this year
36
Alcohol awareness signage in-store
Alcohol Other steps that we have taken include:

Excessive alcohol consumption can be the • Improved bottle labelling: We were
cause of long-term health risks. We take the first supermarket to introduce
a responsible approach to selling alcohol.
The overwhelming majority of people
labels showing the units of alcohol
in our own-brand alcohol and we COMMUNITY
who buy alcohol from our stores drink are now rolling out the recommended ALCOHOL
responsibly. But for a small minority this
may not always be the case.
Department of Health alcohol
labelling on all our own-brand packs, PARTNERSHIPS
showing the unit measurements, the A project in St Neots, Cambridgeshire
Our cashiers receive training on the sale of
recommended maximum daily intake in 2008 was extremely successful
alcohol and other age-restricted products
and health messages. in reducing under-age drinking and
four times a year, supported by a bespoke
• More customer information in stores: antisocial behaviour. The number of
DVD and training materials. We use our
We have been working in partnership youths found in possession of alcohol
internal channels of communication,
with Diageo over the last two years to fell by 94% and people felt that public
including our staff newspaper, to provide
provide customer information through spaces were more pleasant because
cashiers with regular reminders of their
point-of-sale material, shelf-edge labels they were cleaner and there was less
responsibilities towards the sale of alcohol.
and on Tesco TV. group drinking. Our St Neots store
Our training materials are frequently
• A flexible approach to licensing: was the leading retailer involved in
shared with independent local retailers
we do not apply for licences in areas the project.
to support the training of their staff too.
with known disorder issues and we
We use mystery shoppers to test whether Following the success of the pilot
review existing licences where evidence
our cashiers are correctly challenging in St Neots we are working on
emerges that late-night alcohol sales
customers to prove their age. Community Alcohol Partnership
are contributing to problem drinking.
Our UK Marketing Director has been projects in other parts of the country.
a trustee of the Drinkaware Trust since www.wsta.co.uk/community-
its inception in 2007. Drinkaware is an alcohol-partnerships.html
independent UK charity that aims to
change public behaviour and the national
drinking culture by bringing together
health professionals and the industry to
deliver the Government’s Alcohol Harm
Reduction Strategy.
37
customer
4 choice &
Health
In-store pharmacies, opticians

and guidance
TESCODIETS.com
Good health is about more than food Tescodiets.com is the UK’s largest
and we have improved health services online dieting and healthy eating meal
available to customers by operating plan service, aimed at customers who
pharmacies in 269 UK stores and want support and advice to lose weight
opticians in 115. Over 70% of our or have a healthier diet. The subscription
pharmacies are open until 8pm or later, service offers a personalised and
Monday to Saturday, and over 90% of individual approach to weight loss
our pharmacies are open on Sundays. through a range of different diet plans,
We opened 40 new opticians in 2008, from Gi and Light Choices to specific
offering evening and weekend health-based plans like Diabetes and
appointments, sight tests for £10 (free in Heart Smart. All of the eating plans
Scotland) and spectacle frames from £20. are designed by a team of nutritionists
and provide a healthy balanced diet.
Our pharmacies also extend access In addition to personalised weekly
where they operate in the heart of meal plans, customers receive a
disadvantaged communities such as weekly shopping list and a mentor
Hackney in London, where 13,000 to help them.
households without a car are within
a 0.5 km walk of our stores. In January 2009 we launched
Tescodiets Active in partnership
We do not just sell medicines. Our skilled with MiLife, which uses cutting-edge
pharmacists offer a range of services technology to combine online coaching
as part of local Primary Care provision. and activity monitoring through the
More and more customers used our ‘MiBand’. This band can be worn on
preventative health checks in 2008, the wrist or ankle and keeps track of
helped by a special promotion. In January any activity, which is then uploaded
and February 2009 we did over 8,000 to a personal profile where charts
health checks when we offered them for of members’ progress can be seen
just £5. We also offered flu jabs for £10 and reviewed, and plans made for
in over 120 pharmacies during the winter. the week ahead.
Our stores and website also provide a www.tescodiets.com
wide range of information about food,
diet and exercise. Customers can access
information on our Healthy Living website
and tescodiets.com as well as in various
leaflets and publications produced by
our nutritional experts. We also work
with governments, industry bodies
and charitable organisations to provide
health information.
MARY’S MEALS
Through Mary’s Meals we are providing
For example, in 2008 we contributed
nutritious meals in school to 342,000
to two reports produced by the grocery
of the world’s hungriest children in
industry body, IGD, on saturated fats
15 developing countries including India,
(Effective Communication on Saturated
Kenya, Malawi and Thailand. Local
Fat) and portion sizes (Portion Size:
communities and volunteers take daily
A Review of Existing Approaches). Tesco
responsibility for cooking and serving
is also a member of a new IGD working
the meals which encourage children
group developing recommendations on
to attend school, educating them and
portion sizes.
helping to break the cycle of poverty.
38
TESCO personal
finance
In December 2008, Tesco bought
KPI5s0 from The Royal Bank of Scotland Group
its 50% shareholding in Tesco Personal
page
Finance (TPF) to take full ownership
of the business.
Today, TPF has over six million customer
accounts across 28 products, covering
insurance, savings, credit cards, personal
Clubcard data is managed by dunnhumby, lending and online insurance and utilities
a database management and analytical comparison through Tesco Compare.
services company in which Tesco is Customers trust Tesco to deliver value
the majority shareholder. All personal whether they are buying their weekly
information dunnhumby receives is shop or opening a savings account.
securely stored and used in accordance We take the same approach to financial
with data protection laws. services as we do to all other parts
We respect the wishes of customers who of our business, offering competitive,
choose not to be contacted for marketing straightforward products with no
Safety and privacy
and research purposes. Customers’ confusing small print and hidden charges.
Ensuring our products are safe is of
paramount importance. We have strict personal information is never released As a provider of loans and credit cards,
and robust procedures to achieve this, to companies outside the Tesco Group TPF seeks to lend responsibly at all
and to act quickly on the rare occasions for their marketing purposes. We make times. All new applications for credit
when a problem arises. clear to customers that their personal are assessed using industry-standard
information may be shared within the credit scoring techniques and we always
We respect the privacy of the customers, Tesco Group. Any sharing and use of consider the customer’s ability to afford
employees and business partners who Clubcard data within Tesco is carefully and repay the debt before we lend. We
entrust their personal information to us. controlled and subject to strict policies, actively monitor and review our policies
We aim to meet customers’ expectations principles, standards and processes. and procedures in light of the changing
that we will manage their personal
Customer complaints economic environment.
information responsibly. Privacy and
data protection are an integral part Treating people how we like to be treated We acknowledge that some of our
of our employment procedures. is one of our core values. If a customer customers will be facing difficult times
has a query or complaint, we listen and and encourage customers to contact us
In 2008, we relaunched our Group respond as best we can. Many queries directly if they are experiencing financial
Information Security policies after can be answered through our website. difficulty or know that their circumstances
reviewing the way we manage customer Customers can also contact us by phone may change. We deal with all cases
data in the UK. or post. sympathetically and customers are
Our legal team work with the business able to speak with specialist staff who
to raise awareness of data protection
Targets will work with them to determine an
• Continue to roll out GDA labelling
and privacy issues. They provide advice, affordable payment plan.
across all our businesses
guidance, training and support, and
• Launch 125 Tesco Light Choices TPF has always supported the community
employees can raise questions with
lines in Malaysia and in 2008 made donations to Tesco
our in-house data protection officer.
• Continue to Support Change4Life Charity of the Year, Marie Curie Cancer
in the UK Care, for every customer transaction
• Extend our healthy labelling (examples made via our ATM network, raising over
below) across more own-label products £40,000. In January 2009, our ATM
in our UK stores network was also used to advertise
National Debtline, the national telephone
helpline for people with debt problems
in England, Scotland and Wales.
In 2009, TPF will develop a Community
Plan.
39
Our 470,000 employees serve our millions of
customers around the world. We look after and
develop them so they can look after our customers.
From career development and rewards to community
engagement, we aim to be a great place to work.
We are the largest private sector employer
in Ireland, South Korea and the UK
and provide diverse career opportunities
for 470,000 people worldwide – from
positions on the shop floor, to roles Training and development
for managers, buyers, accountants We promise our people ‘an opportunity
and lawyers. to get on’. People feel more committed
when they know they can grow with us,
People grow with us. Many rise from
helping us to retain a skilled workforce.
the shop floor to run the shops they
As a major employer, when we invest in
work in, or move to other jobs within the
training and development we also benefit
business, gaining valuable leadership and
the wider economy.
professional skills along the way. Access
to opportunities keeps people motivated Home-grown managers understand Fishmongers and bakers can gain
and committed, delivering great service. our culture and business and make recognised qualifications
valuable leaders. Many of our senior
We have worked hard to create a
leaders started their careers in our stores, In the UK, skilled specialist employees
culture of trust and respect, where
including Board Director David Potts, such as fishmongers and bakers can
managers help their people to do
who joined as a Customer Assistant. gain recognised qualifications during
their jobs. We know people work better
their careers at Tesco. Our Training
when they are given the power to make In 2008, 50% of Company Directors
Framework Scheme delivers most
decisions and take responsibility, and were appointed internally, including
shop-floor and distribution centre (DC)
we recognise the work they do and the appointment of Laurie McIlwee to
training, and we are working towards
say thank you. We encourage people to the Board as the Group Finance Director.
accreditation by the Qualifications and
learn from their mistakes and challenge This was less than our usual 65% due
Curriculum Authority. In 2008, 97.4% of
conventional thinking. to recruiting new Directors into Tesco
shop-floor and 99.9% of DC employees
Personal Finance. We also appointed
in the UK were trained to bronze level
3,741 new managers for stores and
(competent), and 94.2% of shop-floor
149 distribution centres in the UK alone –
employees to silver level (expert or
86% from within Tesco.
experienced). We exceeded our target to
One in 30 of all staff at Tesco in the train 97% of retail and DC staff to bronze
_______________________________ UK are on our Options development level, and 85% of our retail staff to silver
Graduate programme participants 2008
programme, learning the skills they level. Employees complete bronze training
_______________________________ need to apply for a job at the next work within four weeks of joining and silver
level. This year in the US, we introduced training within 12 weeks of joining.
Asia
China 43
Options for moves from work levels
Japan 14 three to four (senior manager to director
positions) in the US. We will implement
PEOPLE
Malaysia 80
South Korea 69 Options for work levels three and four
Thailand
Europe
35
in Central Europe and Asia in 2009. PROMISES
Czech Republic and Slovakia 57 Our graduate programme fast-tracks We want Tesco to be a great place to
Hungary 26 high-potential graduate trainees into work. We promise that when people
Ireland 13 leadership positions. Recruits come work for us they will:
Poland 18 from across the business internationally.
Turkey 18 • Be treated with respect
UK 136
_______________________________
• Have an opportunity to get on
• Have a manager who helps me
Total 509
• Have an interesting job
41
5 our people
80% of
apprentices
said the
programme
provided
them with a
career path
and 85% now
Communication and consultation
We want employees’ views on issues
have more OTHERS SAY
confidence “The Tesco [regeneration] project is
that affect them and the business,
and communicate with them regularly exactly what we want in this country
through staff question times, face-to-face today – private enterprise joining with
briefings, store and DC forums, Government and public agencies …
publications and our intranet. in order to provide people with jobs”
– Government
Our annual staff survey, Viewpoint, is
anonymous and confidential. Results
get fed into local action plans at store, Rewards and benefits
distribution centre and office level. In Apprenticeships It is important to us that our people
2008, 88% of staff completed Viewpoint. feel rewarded for the work they do.
We offer higher than minimum wage
Employees across our business are free salaries across all our businesses
to join unions, and we have an industry- internationally, as well as benefits in each
leading partnership agreement with market that reflect employees’ priorities.
Solidarity in Poland and Usdaw in the UK.
In many developing markets, staff place
Head Office staff gain direct experience most value on good basic pay and being
on the shop floor through our annual paid fairly for overtime, and these are
TWIST programme (Tesco Week In Store our priorities. In Malaysia where there is
Together). At peak shopping periods such no legal minimum wage, the minimum
as Easter and Christmas all Head Office Apprentices from Bristol receive their certificates wage a Tesco employee will receive is
staff provide ‘Helping Hands’ and go into from Christine Palmer, Group Personnel Manager 30% more than the Poverty Line Index
store to support store colleagues. for Superstores South
for household. We also offer a wide range
Our whistle-blowing policy and helpline In the UK, 848 of our employees of competitive benefits in line with local
is now in place in all countries. ‘Protector have been awarded an Apprenticeship labour laws and regulations, from paying
Line’ is a 24-hour confidential telephone in Retail Skills since 2004. The at least 75% of the cost of medical,
line and email address for employees to apprenticeship is made up of prescription drug, dental and vision
report grievances and ethical concerns. an NVQ Level 2 in Retail Skills, coverage after 90 days’ employment in
All calls are logged and investigated by Key Skills training in numeracy and the US to a tuition subsidy in South Korea.
the appropriate function. The feedback communication, and a technical We are bringing in long-term reward plans
is monitored by Corporate Governance certificate. These nationally recognised across our markets so that we have a
and the PLC Compliance Committee qualifications are completed entirely clear plan on how we will invest in pay and
within each country and reviewed by the in the workplace. The apprenticeship develop benefits in each country. All our
PLC Compliance Committee each year. equates to five GCSEs at grades management teams share in the success
In 2008 we received 253 employment- A* to C. of the business they are growing through
related calls to the helpline. This increase Of the apprentices who graduated bonus schemes linked to profitability and
of 15% from last year shows that in 2008, 80% said the programme delivery of their Steering Wheel objectives,
employees are gaining confidence in provided them with a career path, and executive share options at the same
the service. Most calls relate to personnel and 85% feel they now have more level as UK employees.
issues, commercial issues, security and confidence. One apprentice highly In the UK, 193,000 employees received
trading law. Personnel issues are referred commended in our Apprentice of the £92 million worth of free shares in our
back to the store or resolved through Year awards was Mark Beckitt, 47, Shares in Success scheme in 2008. 52,000
grievance procedures. a General Assistant from our store staff shared a £126 million payout from
in Stalybridge. He is dyslexic and has our risk-free Save as You Earn share
difficulty writing. The programme option scheme and 44,000 staff saved
helped Mark prove to himself that money through a tax-efficient Buy As
he can achieve outside of his comfort Your Earn share saving scheme.
zone. He is now on our Options scheme
70% of store to become a Section Manager. We offer a range of staff discounts across
STAFF in the the Group. In the Czech Republic and
In February 2009 we registered Slovakia we offer family discount days.
UK say they 863 new learners on the Tesco
enjoy working This year in the UK we reduced the length
apprenticeship programme, of service needed to six months for staff
WITH Tesco beating our target of 800. to receive 10% discount on all purchases
over £1, an investment worth £80 million.
Next year we will introduce staff discounts
in Thailand.
42
IN THE UK Diversity and inclusion
WE ARE THE We want everyone to feel welcome
LEADING at Tesco, regardless of age, gender,
RETAILER disability, ethnicity or sexual orientation.
FOR PAY We aim to reflect the customers we
and have
a benefits
serve at all levels of the business.
KPIs
Diversity is embedded in the business by page 50
package a Diversity Council consisting of Directors
worth an from across the business, and chaired by
extra 17% for Retail and Logistics Director, David Potts.
customer Each member of the Board is provided
assistants with talent planning data that allows them
to review the diversity of their teams.
We focus on employing local people
and developing local leaders in each ‘The Same
country. Only 350 of the 185,000 people
we employ internationally are from Chance’ –
our UK business: 47% of our country Employer of
operating boards and 57% of directors
are locals. Twelve people from the
the Year 2008,
international business are on our Czech Republic
Advanced Leadership Programme. In May 2008 Tesco Czech Republic
Disability was named Employer of the Year by
We work to positively attract and develop the organisation The Same Chance.
people who have disabilities. The competition enables mentally and
physically disabled people to nominate
In the UK, we have relationships with employers based on how they are
disability organisations such as Remploy treated, working hours, working
and the Shaw Trust, who understand the environment and colleagues.
importance to Tesco of finding skilled
and dedicated people. Their services Tesco employs about 400 disabled
include pre-employment training, people in the Czech Republic and 40
post-employment development and in Slovakia who are all fully integrated
support for employees. All candidates into our teams. For example, Petr is
receive vocational skills training. mentally disabled and has worked in
an in-store bakery in Smichov for over
The Viewpoint survey featured a four years, reprocessing hard bread
question on disability for the first time into breadcrumbs. He is very engaged
this year, to find out how employees with his work, and has made suggestions
with disabilities feel about the business, for increasing breadcrumb sales, some
and to plan activity in 2009. In the UK, of which have been accepted by the
800 Personnel and Store Managers store. As a result Petr feels valued and
attended our in-house Managing expresses pride in his job.
Disability with Confidence course.
Viewpoint results for ‘I am treated with respect’
Stores Distribution Office
% agree/ % agree/ % agree/

strongly agree strongly agree strongly agree
Overall average 72.1 55.7 86.2

1,351 staff
shared a £3.4 People from ethnic
million payout minority backgrounds
from our irish (average) 72.1 53.6 83.4
save as you
earn share
option scheme
43
5 our people
UK staff in the new staff uniform
Gender
We want women to do as well as men
UK DIVERSITY Age of UK employees
at Tesco. There are three women on our Ethnic diversity
15–19 14.4%
Board of Directors, two are Non-executive We are proud of our diversity.
20–24 14.5%
Directors. In the UK, 20% of Directors are We have the most socially diverse
25–29 10.4%
women and we have just appointed our customer base of any of the UK
30–34 8.9%
first female Director in South Korea in retailers and we want our workforce
35–39 10.2%
2008. This is a significant appointment to mirror the communities we serve.
40–44 11.3%
and establishes a positive role model in In 2008, 120 personnel managers 45–49 10.6%
a country where there are traditionally attended in-store Managing Ethnicity 50–54 7.8%
very few women in senior positions. with Confidence workshops. Another 55–59 6.5%
In the UK, 57% of Tesco employees 120 will be trained in 2009. 60–64 3.7%
are female. There are 123 female store 65 and above 1.5%
A new network for British Asians
managers (16% of total), and we are at Tesco has partnered with
continually developing more women universities and engaged with Asian
to enter management roles. Women parents to improve perceptions of 3.0
are well represented in our development careers in retail, and demonstrate
programmes, which should ensure more the opportunities Tesco offers. As a 2.5
women achieve management positions result, 20% of applicants to the 2010
in the future. Women make up 60% Graduate Scheme are British Asian. 2.0
of participants on our Apprenticeship
in Retail programme. Age 1.5
People of all ages are welcome at
However, there is still work to do. The Tesco. We have no retirement age 1.0
Tesco Women’s Network aims to help and employ people in their 70s and
female Managers and Directors progress 80s (although we comply with
0.5
and has now attracted over 200 senior mandatory retirement ages in 0.0
members (at manager level and above). countries where these exist). In the
The Network provides skills development, 1 2 3 4 5 6 7 8 9 10 11
UK, we include people of all ages
mentoring and networking opportunities. in our Apprenticeship, A-Level and UK ethnic diversity profile*
In the UK, 10.2% of distribution employees Graduate programmes, giving them
are women. This is largely due to the opportunity to develop their % Tesco
traditional opinions that distribution is careers. 27% of people on our % UK population
a male-dominated environment. This is a apprenticeship programmes are
Tesco UK Pop.
general industry issue and not specific to over 40. Our oldest apprentice is 67.
Tesco. We are working to encourage more 1 Asian Other 2.7% 0.4%
women to pursue careers in distribution. 2 Bangladeshi 1.0% 0.5%
3 Black African 1.8% 0.8%
At Tesco in the UK, there was only a 2% 4 Black Caribbean 0.8% 1.0%
difference in the average pay between 5 Black Other 0.3% 0.2%
men and women in 2008. This compares 6 Chinese 0.5% 0.4%
with the national mean average of 17% 7 Indian 3.0% 1.8%
and median of 13%. Anything less than 8 Mixed Race 1.1% 1.2%
5% is deemed statistically insignificant. 9 Other ethnic group 0.8% 0.4%
10 Pakistani 1.5% 1.3%
11 White 3.4% –
(Central European)
* E
xcluding White British (83.1% at Tesco and 92.1% in UK)
Source: The UK population by ethnic group,
April 2001 Census
44
Health and safety
Looking after our staff and customers
TESCO WHIZZ KIDZ
by making sure they have a safe place In 2008 we worked with the national
this year we to work and shop is vital for us. To ensure mobility charity, Whizz Kidz, to give 25
appointed that we are leading from the top our young wheelchair users the opportunity
86% OF new Executive Director for Corporate & to gain work experience in Tesco stores.
managers Legal Affairs, Lucy Neville-Rolfe, is the We initially trialled work placements in
from within designated Director for health and safety. June 2008, and then rolled out further
tesco We have adopted the joint Health and placements in 25 stores across the
Safety Executive and Institute of Directors country. The programme was organised
Guidance – Leading Heath and Safety in response to Whizz Kidz’ survey of
at Work. young wheelchair users which found
Flexible working their top concerns to be: ‘getting a job’
We manage the success of our health and ‘not having the same opportunities’
We support flexible hours wherever
and safety performance by measuring as non-disabled friends.
possible. In the UK we offer family-
the rate of injuries suffered to our people
friendly shifts, job-sharing, flexi-time Twenty-one-year-old participant
and to customers who visit our stores,
and compressed hours, shift swaps, Ben Ratford said, “I really enjoyed
and through independent compliance
home working and part-time working working at Tesco. The placement has
audits of our stores and distribution
where possible. We also offer maternity given me more confidence and proves
centres. In 2006 we set a three-year target
leave for both full- and part-time workers, that using a wheelchair does not have
to reduce the rate of reportable accidents
paid paternity leave, equal training and to be an obstacle to getting a job.”
in our UK workplace by 10%. At the start
development opportunities for full- and
of 2009 we have in fact achieved a After the placements, three of the
part-time workers, childcare vouchers,
reduction of over 50% in the rate of participants were offered permanent
bereavement leave and career breaks.
reportable accidents across all of our positions. In 2009 Tesco and Whizz Kidz
Many of these benefits exceed statutory
stores and distribution centres. will expand the project to create Whizz
requirements.
Our health and safety performance Kidz Saturday clubs in 48 of our stores.
As a response to employee requests The clubs will provide an opportunity
is measured using reportable accident
we now give up to five days paid leave to for disabled young people to socialise
rates which we measure regularly and
train as a foster parent, paid time off for and campaign on issues they feel
report each quarter to the Compliance
fertility treatment, and the opportunity strongly about.
Committee and annually to the Executive
to take leave for study and life breaks.
Board. Our stores measure their own
This year we appointed our first part-time performance as well through the Store
senior director. Steering Wheel which targets reductions
in rates of injury for each specific store site. TARGEts
• Train 97% of retail and DC staff
This year in the UK we achieved a to bronze level, and 85% of our retail
significant reduction in the number of staff to silver level through our Training
Less than More than reportable staff accidents in our stores
16 hours a 36 hours a
Framework Scheme
week 27% week 36%
from 1,958 in 2007 to 1,489. This has • Double the number of people on our
been achieved by continuing to improve Apprenticeship in Retail programme
training and raising awareness with • Continue to run Managing Disability
16 to 35 our people. Each year targeted safety with Confidence courses in 2009/10
hours a campaigns are organised throughout • In 2009 we will communicate our
week 37% the business. These aim to raise refreshed Values to every member
awareness and reduce the risk from of staff in every country except
the main causes of injury: slips and falls; the US, where they have only just
and manual handling. launched the Values
UK flexible working We also ran an impactful accident • We will create 26,000 jobs across
awareness campaign in October where all the markets in which we operate
we highlighted key safety messages to • Train 120 personnel managers to
all staff. Bright red posters were placed manage ethnicity with confidence
around stores and warehouses. These
underlined the importance of cleaning
as we go, immediately dealing with
rubbish and spillages, and taking
care when moving around stores.
45
managing CORPORATE
RESPONSIBILITY
managing
CORPORATE
RESPONSIBILITY
We understand that our success comes from
behaving responsibly and earning the trust of
our customers, suppliers and stakeholders. As this
Report shows, there are many complex issues that
we have to face on a daily basis, from reducing
our environmental impact to ensuring consistent
standards across our markets.
CO M
MU
N
IT
Y
46
Go online!
To see our full
‘Every Little Helps’
strategy visit
We manage all aspects of our business
using our Steering Wheel – a balanced www.tesco.com/
scorecard of the key elements of our about-us/strategy
business: Customers, Operations,
People, Finance and Community.
We use the Steering Wheel to emphasise
that corporate responsibility (CR) is not
a specialist function in Tesco – it is part
of everybody’s job every day.
The Community segment of the Steering Managing CR Corporate governance
Wheel reflects our new Community The Board of Directors formally reviews Managing environmental, social and
Promises, which were launched this our CR strategy once a year, and discusses governance issues is essential to good
year in the UK and will be launched emerging issues whenever relevant. corporate governance, as these impact
internationally in 2009: on reputation and the long-term success
Lucy Neville-Rolfe, our Executive Director
• Actively supporting local of the business.
of Corporate & Legal Affairs, is accountable
communities for our CR performance. We have clear, transparent and effective
• Buying and selling our products policies and processes for managing our
responsibly Our Corporate Responsibility Committee
business responsibly and in accordance
• Caring for the environment comprises 15 senior executives from
with the law.
• Giving customers healthy choices across the business and is chaired by her.
• Creating good jobs and careers The Committee meets at least four times We aim for the highest standards of
a year to develop CR strategy, review behaviour from all employees. This
We are integrating these principles relevant policies and practices, identify requires a visible commitment from
into the day-to-day management of opportunities to improve the sustainability the top and clear, well communicated
our business. Our staff from the shop of the business, agree and monitor guidelines so employees know what is
floor to the boardroom are expected to CR KPIs, and engage with internal and expected of them.
apply them in everything they do from external stakeholders on CR issues.
Clear lines of accountability are essential.
strategy setting, to decision making, Every year we invite external speakers to The Board of Directors has overall
to performance reviews. address the CR Committee and comment responsibility for managing risks to
We communicated our Community on our CR strategy, performance and our business and reputation, including
Promises to employees using specially reporting. In addition, in 2008 we held those related to CR. The Board’s Audit
produced leaflets, posters and pocket an externally-facilitated discussion for the Committee, Nominations Committee
guides (see box p48). This Report uses Committee, to help clarify our thinking on and Remuneration Committee are
a similar structure so our progress can Tesco’s key CR issues and how we respond responsible for related processes and
be followed easily. to them. controls. In addition, the Executive
Committee monitors controls through
Our Community Promises are reflected the Compliance Committee, Corporate
in the Community Plans in all of our Responsibility Committee, and Finance
markets. The Plans are designed to Committee. Reports from each Committee
help us change the way we do business, are circulated to the Board, which holds
for example by reducing our carbon a formal discussion on each at least once
emissions. Each Community Plan has a year.
the flexibility to reflect local priorities
within the common framework of the For more information about the roles,
Community Promises. We identify local responsibilities and independence
priorities by talking to customers and of Board members as well as details
other stakeholders in each region, of our corporate framework visit
primarily through Customer Question www.tesco.com/corpgov
Times (CQTs), meetings and surveys.
You can see a full list of Community
Plan projects for each country at
www.tesco.com/cr-report09/approach/
strategy/community
47
managing CORPORATE
RESPONSIBILITY
Public policy
Business can often play an important
COMMUNITY
and legitimate role in shaping public PROMISES
policy. Where appropriate, we work This year we launched our Community
with governments to share our expert Promises in the UK to engage staff
knowledge and our experience, in order and build their understanding of the
to help shape effective policy. ENGAGING Community Plan in order to make our
We are open and transparent in our
engagement with governments.
OUR CR Community activity come to life in
stores. The new Community Promises
We do not make donations to political STAKEHOLDERS sit alongside the People, Customer, and
parties or employ consultants to lobby Operations Promises, which we use to
In 2008, we held two independently
on our behalf. When we engage with communicate our core Steering Wheel
facilitated focus groups with CR
governments we focus only on those objectives to staff.
opinion formers including journalists,
issues of most importance to our business, socially responsible investors, suppliers Through an integrated campaign
employees and customers. and academics, representatives from including literature, staff payslip offers,
In 2008, key issues included the local and national government and competitions, events and in-store
environment, alcohol, health and non-governmental organisations. activity, we achieved a recognition
nutrition, planning and regeneration, rate of 45%.
We asked for feedback on whether we
and productivity and skills. have correctly identified the material Following the success of the launch in
Stakeholder engagement issues, our strategy and performance, the UK we will launch the Community
and issue identification and the quality of reporting in our Promises internationally next year. In
Our business exists to serve our 2008 CR Review. 2009 we will start to bring this activity
stakeholders, who have a wide range to life in our stores for customers.
Key recommendations of the focus
of expectations. Sometimes these groups, which we hope we have
expectations can conflict. We listen addressed in this Report, were:
to the views of all our stakeholders and
take them into account when trying to • More strategic focus in the
balance different considerations. printed Report with more detail
on the website
Feedback from our stakeholders is used • More candour about good and
to review the issues on our CR agenda bad performance
which we adjust when new issues of • A willingness to acknowledge
significance emerge. Our Community other people’s views
Plans are developed to respond to local • Greater clarity about the
stakeholder priorities. methodologies we use to
For more information on our stakeholder calculate data
engagement see the table on page 52. • Better explanation of standards
and codes such as Nurture
• More coverage of the international
business
• More data, and more external
benchmarks to provide context
for Tesco’s performance
48
Corporate
nsibility
Respoittee
Comm
1 2 3 4 5
6 7 8 9 10
11 12 13 14 15
1 Lucy Neville-Rolfe, Executive 6 R uth Girardet, Corporate 11 Andrew Neale, Head of Facilities

Director, Corporate & Legal Affairs Responsibility and Community 12 Noel Robbins, Chief Executive –
2 David North, Community and Director Central & Eastern Europe
Government Director 7 Catherine Glickman, Personnel 13 Greg Sage, International and Internal
3 Terry Babbs, International Trading Director to CEO Communications Director
Law and Technical Director 8 Alasdair James, Category Director 14 Simon Williams, Property Director
4 Jonathan Church, Media Director – Energy, Petrol, Waste, Recycling – Express, Metro, Distribution and
5 Kari Daniels, Brand and Trade and Packaging Funding
Marketing Director 9 Liz Kynoch, Group Technical & 15 Nanbin Zhuang, Corporate Affairs
Trading Law Director Director – Tesco China
10 Alex Laffey, Transport Director
49
KEY performance
indicators Community Promise
Caring for the environment
KEY
PERFORMANCE
INDICATORS
We set targets for Our KPIs for 2009 are set out in
this table.
each objective in the
These highlight specific areas on
Community segment which we will focus, and against which
of the Steering Wheel our performance will be measured
throughout the coming year, though
and use Key Performance there are of course many other areas
Indicators (KPIs) to where we will continue to work
measure our progress. to improve our performance, as
highlighted throughout this Report.
The Board of Directors Developing our KPIs
reviews performance Since we first developed Community
quarterly and our top KPIs in the UK in 2007, we have been
working to roll them out across the
2,000 managers receive Tesco Group. In 2008 we introduced Actively supporting local communities
a summary report to some Group-wide KPIs in addition
communicate to their to our UK KPIs so we could measure
the success of our newly established
teams. We review our Community Plans.
KPIs annually to ensure Now that we have Community Plans
they are still accurate in every country in which we operate,
with clear goals set out in our
and robust measurements Community Promises, we have set
of our performance. Group KPIs so we can track progress Giving customers healthy choices
year-on-year.
In 2009 all countries will be working
to deliver Group targets that reflect
our five Community Promises. Our
new KPIs fully reflect our business
across the world and demonstrate
the importance we attach to being
a responsible business wherever
we operate.
In addition to these 12 KPIs,
each country has country-specific
KPIs, which reflect projects that are
important to their local communities.
These are highlighted in the ‘targets’
Buying and selling our products responsibly
sections throughout this Report.
To view and compare detailed

KPI tables from previous years
visit www.tesco.com/cr-report09/ Creating good jobs and careers
kpi09
50
KPI Target Actual Target Comment
2008 performance 2009
Reduce CO2 emissions from existing 5% 7% 5.5% This target is measured against a baseline of our stores
stores and distribution centres and distribution floor space in 2006, i.e. emissions
by at least 50% by 2020 against from extensions and new space are excluded to provide
a baseline of 2006. Annual target an accurate comparison. It excludes emissions from
reported as percentage reduction refrigerant gases because we are still developing a
against previous year consistent strategy for reducing refrigerants across the
Group: we are working hard to do this as quickly as possible.
See page 7.
Reduce CO2 emissions from new Develop New store 25% We have already made strong progress towards our KPI
stores by 50% by 2020 against an environ- format on reducing the carbon emissions of new stores across
a baseline of 2006 mental developed the Group, achieving a 20.5% reduction this year and
format our stretching target will help us to continue this progress
20.5% over the coming year.
reduction
versus 2006 See ‘Environmental stores’ section on page 9.
Reduce by 50% the amount of 10% in 9.2% in 10% Improved double-deck utilisation and revised delivery
CO2 used in our distribution network the UK the UK across frequency to stores helped us to continue to lower
to deliver a case of goods by 2012 the CO2 emissions per case delivered. This year we have
against a baseline of 2006. Annual Group extended the target across the Group.
target reported as percentage
See page 10.
reduction against previous year
Percentage of store waste recycled 80% in 85% in 95% in Due to significantly different recycling systems across
the UK the UK the UK the countries where we operate, it is difficult for us to
measure waste recycled across the Group. Our 2009
target reflects our work in the UK. We are working
to develop a more meaningful Group-wide target.
See page 13.
Staff and customer fund-raising (£) £2.73m £8.2m £5m This year’s performance was helped by the UK raising £6.2m.
Next year’s target reflects the fact that customers may
donate less in the coming year because of the economic
downturn but is almost double this year’s target.
See page 23.
Donate at least 1% of pre-tax profits 1% 1.9% 1% This year we donated £57m to charities and good causes,
to charities and good causes equivalent to 1.9% of pre-tax profits.
See page 22.
Helping customers live healthy lives 3.5m 4,659,310 5.3m We exceeded our target to get 3.5m people active in 2008,
with a particularly strong performance in Thailand.
Staff and customers active
(millions of people) See page 36.
Helping customers choose healthy N/A New 110 We have introduced a new target for the number of
food (number of promotions) promotions with key messages about health to raise
awareness and provide customers with information.
See page 35.
Increase the number of eligible 78% 92% 99% We have exceeded our Group target with 92% of eligible
own-brand lines with nutritional lines labelled. We reached 100% in all countries except
or front-of-pack GDA labelling the Czech Republic, Hungary and Slovakia where we plan
(% of total number of eligible brands) to reach 100% in the first quarter of 2009/10, and South
Korea where GDA labelling is on the 2009/10 Community
Plan with an aim to reach 95% by the end of the year.
See page 33.
Supplier Viewpoint N/A 68% 70% We have introduced a KPI to grow the response rate
from suppliers whilst maintaining their average score.
Average score (% of scores
that are favourable) See page 25.
Response rate of suppliers (%) N/A 37% 45%
Staff being trained for their next job N/A New 10% We have introduced a KPI to measure the number of
Tesco staff around the world being trained for their next
job, for example through our Options programme.
See page 41.
51
managing CORPORATE
RESPONSIBILITY
UNDERSTANDING OUR
Stakeholders
This table summarises the main issues we have identified through engagement with
different groups and gives examples of the ways in which we engage with them.
Stakeholder group Interests and expectations of Tesco Interaction with Tesco in 2008
Customers Customers want us to provide a We talk to our customers every day of the year so we can identify
good shopping trip and be a good and respond to their changing needs. Customer Question Time (CQT)
neighbour. They want us to be fair and meetings help us identify and respond to changing customer needs.
honest and provide choice and quality, These meetings are held in stores in all markets and enable staff and
including sustainable, healthy and managers to hear customer views on how we are serving them and
affordable products. our role in the community. CQTs inform our Customer and Community
Plans. In 2008, we also held CQTs on particular issues, including
community and the environment.
Investors Our investors seek competitive We actively engage investors in an annual structured programme
returns from their shareholdings, as of presentations and meetings to help us understand their views
well as assurance that their investments on our strategy (of which corporate responsibility is an integral
lie with a sustainable, well-governed part), and the way our business is governed. In addition, we
business. They expect us to have a provide updates and issue briefings when appropriate during
robust strategy and report on our the year. We also communicate with shareholders through our
processes and progress in a Annual General Meeting, Investor Relations website, and our
meaningful and transparent manner. participation in initiatives such as the Carbon Disclosure Project
and the Business in the Community CR Index.
Employees Our staff want secure, interesting jobs Our staff need to feel good about their employer to do a good job
with fair terms and conditions and for our customers. We listen to and communicate with our staff
opportunities to get on. They want constantly. We get feedback at Staff Question Time sessions and
a helpful manager, to be treated through our annual Viewpoint survey. Our Pulse survey also tracks
with respect and to have a safe and staff views on how they feel about working for Tesco.
healthy workplace.
Communities Our neighbours want job opportunities, We communicate with local people in our stores and at public
healthy, regenerated communities and consultations and exhibitions, through leaflets and focus groups,
support for local causes and initiatives. and through our work with local charities and community groups.
Suppliers Our suppliers want to be treated fairly We hold regular meetings with our suppliers, processors and
and honestly. They seek long-term manufacturers. We also bring them together to share experiences
relationships and opportunities at our Producer Clubs, and seek their feedback through our annual
for growth. Viewpoint survey. We also provide training and capability building
for suppliers where appropriate.
Governments and Governments and regulators expect us We engage with governments, parliamentarians, regulators and
regulators to comply with the law, provide secure, officials on a range of issues affecting our business and communities.
family-friendly job opportunities and These include planning processes and consultations on new
good-quality training. They seek our regulations including healthy eating and alcohol. We work hard
support on initiatives affected by our to ensure our responses to government consultations are aligned
business, such as those relating to with our CR policies and practices.
health policy.
Non-governmental NGOs want us to show leadership Engaging with NGOs helps us better understand current and
organisations on CR issues from climate change emerging issues related to our business. This work informs our
(NGOs) to ethical trading. They expect us to CR strategy and helps us better manage our impacts. We met many
provide clear policies and principles NGOs in 2008 to discuss issues including climate change, biofuels,
and for us to communicate views ethical trading and animal welfare. We also contribute to research
to them clearly and openly. and surveys, and respond to requests for information from NGOs
as fully and promptly as we can. We ask NGOs to share their findings
with us to help us improve our performance.
52
THE FUTURE
See page 36.
Challenges
Dan Crossley
Achievements
embedded water.
Tesco PLC
contents
1 ENVIRONMENT
PAGE 06
2 communities
PAGE 18
suppliers
3 & ethical
trading
PAGE
PAG E 0024
customer
4 choice &
Health
PAGE 32
PAGE 00
5 OUR people
PAGE 40

Tesco PLC
Tesco House
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46 MANAGINg CORPORATE RESPONSIBILITY

46 MANAGINg CORPORATE RESPONSIBILITY

Go online! To see our full ‘Every Little Helps’ strategy

470,000 by market Republic of Ireland

Total emissions (mtCO2e)

Share of emissions by Absolute emissions by Group emissions by

260 employees having previously will cut carbon emissions by 16%.

blueprint store design is an example of CO2 per annum.

Most of our CHP plants will run on natural

Energy-saving light bulbs

UK Greener Living brand Helping customers save energy in their

Concentrated squash – a Tesco packaging reduction

Cutting carrier bag use

Reusable bag from the Czech Republic

53% of customers agreed

Gorton and Cheetham Hill (Manchester),

Supporting local economies

Tesco for Thais Foundation

Although we strive for excellent

We aim to undertake independent

Addressing problems FAIRTRADE

Nutritional labelling in the Czech Republic

GDA signposts cover calories, sugar, fat,

Our Thai business

Alcohol Other steps that we have taken include:

In-store pharmacies, opticians

Viewpoint results for ‘I am treated with respect’

Stores Distribution Office

% agree/ % agree/ % agree/

Overall average 72.1 55.7 86.2

UK staff in the new staff uniform

1 Lucy Neville-Rolfe, Executive 6 R uth Girardet, Corporate 11 Andrew Neale, Head of Facilities

Caring for the environment

To view and compare detailed

46 MANAGINg CORPORATE RESPONSIBILITY

Das könnte Ihnen auch gefallen

1 Lucy Neville-Rolfe, Executive 6 R uth Girardet, Corporate 11 Andrew Neale, Head of Facilities