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October 21, 2009

It’s natural for Tesco to boss climate change debate

A speech by Sir Terry Leahy last week to the Sustainable Consumption Institute conference underlines Tesco’s determination to be a prominent actor in the climate change debate. Ben Cooper suggests it is natural for a company built on such an aggressive business model to seek to lead from the front and set the agenda, thereby taking the initiative away from its detractors.

A speech by Sir Terry Leahy last week to the Sustainable Consumption Institute conference underlines Tesco’s determination to be a prominent actor in the climate change debate. Ben Cooper suggests it is natural for a company built on such an aggressive business model to seek to lead from the front and set the agenda, thereby taking the initiative away from its detractors.

A few years ago, a cutting-edge TV comedy show in the UK produced a skit in which Tesco invaded Denmark. As a satire on Tesco’s huge commercial might, it was amusing. But for some the inexorable growth of the UK’s largest retailer is simply no laughing matter.
It is not overstating the case to say that campaigners loathe Tesco. But, if judged solely by their actions, consumers love the retailer. Moreover, there are apparently plenty of consumers who don’t like Tesco that much as a company but shop there anyway. Tesco does not take umbrage and gladly takes their money.
For campaigners, when Tesco is doing what pariah conglomerates do, putting small retailers out of business, squeezing suppliers etc, the job is relatively straightforward. It is when Tesco does something which, if it were anyone else but Tesco, would be good news, that life gets complicated.
Nothing illustrates this better than the retailer’s work on climate change. Last Friday, Tesco CEO Sir Terry Leahy gave a speech at a conference held in London by the Sustainable Consumption Institute of Manchester University to launch its first major report, Consumers, business and climate change. Conservative leader David Cameron was the keynote speaker.
Tesco itself established this research unit two years ago with a GBP25m investment. Already the NGO’s alarm bells are clanging. What did Tesco want in return? How is it influencing the research? Now, is that healthy and understandable scepticism or prejudice?
Sir Terry took the opportunity to set out Tesco’s environmental stall. The company launched its Climate Change strategy three years ago, and has made plenty of announcements and launched multiple initiatives over recent years. But this speech served as a useful summary of the retailer’s position and an opportunity to trumpet some new pledges and initiatives.
In particular, he committed Tesco to becoming a zero-carbon business by 2050, without purchasing offsets. Leahy also announced an agreement with 18 major corporations, with a combined turnover of US$700bn, to “work together to empower consumers on climate change”.
He said Tesco had set itself the goal of achieving a 30% reduction in the carbon impact of the products in its supply chain by 2020.
But it was on changing consumer behaviour that Sir Terry said true change would depend. To that end, he trumpeted various consumer initiatives, such as carbon labelling which now extends to 114 products, with plans to bring this up to 500 this year, he affirmed Tesco’s commitment to breaking down “the barrier of price” on greener products, and launched a ‘buy one and get one free – later’ offer on certain perishable lines.
Friends of the Earth appears unconvinced. Simply, the campaigner believes Tesco’s commitments and actions on climate change are inconsistent with its aggressive business model and the way it treats its suppliers. A strong advocate of an official supermarket ombudsman, Friends of the Earth believes Tesco’s opposition to the idea is at odds with its rhetoric on corporate social responsibility.
“Green choices should certainly be made cheaper and easier by the Governments and businesses, but if Tesco is genuinely concerned about the environment it must overhaul its entire business,” says Friends of the Earth food campaigner Helen Rimmer. “Tesco continues to relentlessly drive down prices paid to farmers, short-change the environment and bulldoze through weak planning laws to force new stores onto reluctant local communities.”
Rimmer continues: “As a business that constantly ducks its responsibilities, Tesco’s attempt to position itself as a green leader is staggeringly hypocritical. Strong Government action is needed to force companies to face their environmental responsibilities – starting with a new watchdog to make supermarkets play fair with farmers, suppliers and the planet.”
Had Helen Rimmer not heard Sir Terry’s speech?  Well, no. She points out to just-food that Friends of the Earth was not invited to attend the SCI conference, and says the organisation would have attended had the invitation been extended. This is interesting given that Sir Terry mentions Tesco’s willingness to share sustainability information “with NGOs and interested groups”. She says Friends of the Earth would be willing to engage in a dialogue with Tesco.

When asked if Tesco was setting the agenda, Rimmer says that the company is “setting their own agenda”. She describes the ‘buy one get one free – later’ as “gimmicky” and suggests the problem with BOGOFs generally is that they are subsidised by suppliers.
It is hard to balance these outlooks. On the face of it campaigners may appear somewhat churlish. But Tesco is a powerful company with massive lobbying strength. Campaign groups naturally feel it is their responsibility to take companies like Tesco to task and extract the maximum effort from them, particularly if they feel governments may not.
However, Charlotte Henderson, retail supply chain programme manager at the Waste & Resources Action Programme (WRAP), believes Tesco needs to be given credit for the initiatives in Sir Terry’s speech.
“We would welcome the initiatives that they’re introducing,” Henderson tells just-food. Henderson says Tesco’s aim to work with suppliers and identify “hotspots” of concern in the supply chain is also significant. Working with suppliers and the whole chain is “welcomed”, she says, and will be necessary to deliver the reductions Sir Terry identified.
Working with other retailers will be “very important”, Henderson adds. She also believes Tesco’s focus on the end consumer was positive and the ‘buy one, get one free later” initiative “looks like a promising approach” which could be extended to other lines with a short shelf life.
So in light of this, why is Tesco generally getting so little credit for what it is doing? It has to be about power. Nobody sticks up for Tesco because, palpably, Tesco does not need anyone to stick up for it. It is a hugely powerful concern that appears entirely in charge of its own destiny.
But Tesco has recognised that it is massively in its own self-interest to be in the vanguard on climate change issues. Is it that which most irks environmental campaigners? Even in their domain, Tesco appears sometimes to be setting the agenda.
The upside of this is that, the debate over Tesco’s hegemonic presence to one side, what Tesco is doing in terms of improving its own environmental performance, influencing its supply base and encouraging and enabling consumers to be greener has to be good news, even if the extent of the benefit remains a subject of debate.
Just don’t expect campaigners to be garlanding Tesco for being a good corporate citizen. Sir Terry will have to content himself with the thought that what he is doing is good business and is probably helping Tesco to become an even stronger force in the future.

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