Tesco reveals the innovative activities it uses to encourage its diverse supply chain to adopt more carbon-efficient operations
In 2009, Tesco set itself the ambitious target of reducing the carbon emissions of the products in its supply chain by 30% by 2020.
As one of the largest retailers in the world, selling more than 70,000 different products, the challenge is considerable – the carbon emitted in growing, manufacturing, processing, transporting, retailing and using its products adds up to about 10 times the supermarket chain’s direct carbon footprint.
Tesco has been cutting its carbon emissions for years as part of its climate change strategy to become a zero-carbon business, in terms of its own direct carbon footprint, by 2050. As a result, it has reduced its energy costs by more than £200 million annually.
The retailer already has several zero-carbon sites in its property portfolio, including UK zero-carbon stores in Ramsey, Bourne and Welshpool, a zero-carbon training academy in Korea and a new energy-efficient distribution centre in China. By relocating distribution centres to better service stores, reducing maximum fleet speed and introducing bigger lorries, Tesco now emits 20% less carbon per case of delivered goods than in 2007.
A collaborative approach
Unsurprisingly, Tesco’s supply chain is a huge and complex web – it has thousands of suppliers across the globe, some of which are huge multinationals themselves, others small local growers producing one specific product for the retailer.
Through top-level analysis, Tesco knows that approximately 55% of the carbon footprint of the products it sells in the UK arises from its supply chain, with about 10% of the remaining emissions attributable to Tesco’s distribution and retailing operations, and up to 35% from customer use and end-of-life disposal.
From the outset, although the retailer has taken a leadership position on reducing emissions in its supply chain, it has been determined to achieve its environmental aims through collaborative partnerships with suppliers.
As Andrew Yeo, head of supply chain carbon reduction, comments: “We don’t pretend to be the experts, and some of our suppliers may have better examples of good practice than us – it’s just as much about our suppliers educating us, and each other. We have not imposed any hard and fast standards for our suppliers to meet because it’s about us working together to reduce our collective carbon footprint.”
Yeo says that Tesco is still developing a real understanding of the detail of its supply chain carbon footprint – not surprising, given the extent of its supply chain activities. In 2010, the company asked all suppliers to its UK business to complete questionnaires on their carbon-reduction, water-saving, waste and packaging projects.
Since 2008, it has also measured the carbon footprint of about 1,100 of its products, the largest footprinting effort that any retailer has undertaken to date and a huge investment on the part of Tesco, says Yeo. Around half of these product footprints have now been certified by the Carbon Trust and a significant number are labelled with the Carbon Reduction Label.
Because of the scale of the challenge – and therefore opportunity for substantial carbon reduction, Yeo is quick to point out – Tesco has adopted a targeted approach to working with its suppliers.
This strategy applies to the areas of the supply chain Tesco focuses on first and the type of projects it initiates – it makes sense for the retailer to concentrate on “carbon hot spots” as these frequently represent the biggest opportunities to cut carbon.
As part of this work, Tesco is running several pilot projects to drive carbon reductions across its supply chain (see panels below). Although these initiatives are concentrated mainly on food production and transportation, and the larger-volume sales, Tesco is also looking to measure the carbon impact of all the clothing products it sells.
Having done so, it will target the hot spots in manufacturing and develop best practice that can be shared across the industry. One example is working with Tesco’s clothing and electrical suppliers in China, helping them to be more energy efficient and retrofitting their factories accordingly.
The knowledge hub
An illustration of Tesco’s collaborative approach to encouraging more carbon-efficient behaviour across its supply chain is the more than 350 suppliers in over 10 countries that have joined the retailer’s online “knowledge hub”.
The hub is a web-based forum for suppliers to share carbon-reduction experiences through a variety of seminars, discussions and educational visits.
The number of subscribers to the forum has increased steadily since its launch in 2010. Managed by 2degrees, a specialist online sustainability network, the hub hosts fortnightly webinars and other internet-based events, not even necessarily involving Tesco’s own input.
“The online forum is not about us talking to suppliers necessarily,” comments Yeo. “We invite guest speakers and often the dialogue and information exchange between suppliers is completely independent of our involvement – although 2degrees very actively manages the content on our behalf to ensure it is accessible, lively and engaging. But the focus is on our suppliers sharing best practice on a daily basis to help them gain the confidence they need to invest in carbon reduction.”
Tesco also promotes a number of face-to-face opportunities for suppliers to engage with its carbon-reduction goals, including a conference in March 2011 that brought together more than 200 suppliers to hear about Tesco’s vision and work in this area.
In September 2011, the retailer hosted its first supply chain awards ceremony. The event showcased suppliers that had successfully reduced their carbon emissions. Yeo says there were some impressive applications from Tesco’s suppliers, including GlaxoSmithKline, Arla Foods, Park Cakes, Coca-Cola, Italian tissue producer Sofidel and organic vegetable company Tio.
The award for best carbon-reduction innovation went to Branston, a supplier that completely rethought its processes and made some very ambitious investments in new technologies that have seen its energy use reduce by 40% and its water consumption by 60%.
Greenvale, one of the UK’s leading potato suppliers, carried off the award for best carbon-reduction strategy for introducing measures such as wind turbines, “cascade” water recycling plants, solar PV, LED lighting, a refrigeration replacement scheme, a motor replacement policy and staff awareness training.
Robert Wiseman Dairies won the best employee engagement award for developing an “environmental excellence roadmap”, a flexible tool allowing sites to develop their own local carbon-reduction campaigns.
In East Kilbride, the dairy came up with the idea of a site treasure hunt, encouraging individual employees to identify opportunities (also known as “treasure”) to reduce the site’s environmental impact. When treasure was identified they were provided with the tools and coaching to deliver the project themselves.
One simple idea was to put red, amber and green stickers on electrical equipment in the offices to identify when they can be turned off – green can be turned off if not in use, amber can be turned off at the weekend only and red can’t be turned off at all.
Other ideas included turning off chill compressors and compressed air supplies to certain areas after production and not having a boiler constantly on standby. In total, employees identified more than 300 tonnes of carbon savings a year through their treasure hunt.
Onwards and downwards
As was noted earlier, Yeo is well aware that the challenge facing Tesco, to reduce the carbon emissions of the products in its supply chain by 30% by 2020, is an ambitious one. And the path ahead is a long one. But it is a journey that Tesco is fully committed to completing.
As Yeo concludes: “Combating the impact of climate change is a huge undertaking, but as a responsible global company we want to do the right thing. Developing a more sustainable business will help us to build more robust and resource-efficient operations and supply chain – therefore our environmental aims are inextricably linked to our commercial priorities.”
|
|
|
The milk round
|
Canning carbon
