In January, we announced that we would measure and publish our total direct carbon footprint as part of our commitment to tackle climate change. Our aim was to establish a clear baseline from which to track progress in reducing our emissions, and enable us to identify those areas of our business we need to prioritise.

We commissioned Environmental Resources Management Limited (ERM) to map the total direct carbon footprint of the Tesco business across all the countries in which we operate.

Our Impact

The direct carbon footprint for the Tesco Group during the financial year to February 2007 was 4.13m tonnes of carbon dioxide equivalent (CO2e)*. Our UK business emitted 2.25m tonnes of CO2e or 55% of our total direct emissions.

Using data from 2004, Defra estimates that the total (both direct and indirect) carbon footprint of the UK is 659m tonnes CO2e, and the total footprint of the UK food industry is 111m tonnes CO2e. To put our direct UK carbon footprint in context, this means that our UK operations represent approximately 0.3% of the UK’s greenhouse gas emissions and 2% of the food industry’s emissions.

The UK food retail sector is estimated to emit 9.2m tonnes CO2e annually, plus the associated distribution emissions of approximately 2.4m tonnes CO2e. Tesco’s emissions therefore equate to roughly a fifth of the footprint of food retail – in line with our market share.

Split of emmissions by country for 2006/07

What We Measured

Boundary for Direct Carbon Footprint

We define the scope of our direct footprint in line with industry standards, which comply with the guidelines set out by the World Business Council for Sustainable Development (WBCSD). We included energy use in all Tesco stores, distribution centres and offices as well as emissions from primary distribution, business travel and our home delivery vans. We also included the impact of the HFC gases used for refrigeration.

We recognise that we also have an important role to play in reducing our indirect carbon footprint and are examining ways to help our suppliers and customers reduce their emissions too.

Group split of emmissions by source 2006/07 UK split of emmissions by source 2006/07

Progress Since 2005/06:

Our carbon intensity has fallen during the 06/07 financial year: our footprint in tonnes of CO2e has not changed materially since the 05/06 financial year despite a 10.9% increase in sales and a 17.2% increase in selling area (our footprint for the 05/06 year was assessed to be between 4 and 4.3 million tonnes CO2e).

What We Will Do With This Data

Even before we measured our footprint, we were aware that grid electricity was responsible for a significant proportion of it. This is why we had already pledged to halve the amount of energy we use per square foot in our UK stores by 2010 (against a 2000 baseline). We are on track to achieve this target two years early by employing a wide range of efficiencies such as switching to low-energy lighting and installing cold-air retrieval systems to take cool air from one part of the store to act as air conditioning in another.

Now that we have measured our carbon footprint we have set ourselves new baselines against which we will track further progress.

Refrigerant gas is a significant proportion of our carbon footprint, so we are leading a programme to phase out HFCs in large-scale refrigeration. We are currently trialling natural refrigerant solutions in three of our stores.

We want to make our distribution system as fuel-efficient as possible and have set ourselves a five year target of increasing by 50% the number of cases we deliver per kilogram of CO2 created. This is on top of investments we have already made, such as double deck trailers (which carry more goods per trip) and dedicated train services.

In recent years we have begun building environmental stores in which we test low-carbon technologies to establish their suitability for wider roll-out. Once a particular technology or practice is proven, we add these to the basic blueprint for all new stores and retrofits of existing stores.

An effective way to cut our carbon footprint is to self-generate energy from renewable sources such as solar, wind, biomass and geothermal. We have set aside £500m which we will be spending over the next five years on environmentally-friendly technologies such as these.

Through these initiatives and more, we intend to halve the total carbon footprint of our existing buildings worldwide by 2020. We are also growing responsibly by ensuring all new stores we build between now and 2020 emit, on average, at least 50 per cent less carbon than an equivalent store built in 2006.

External Commentary from ERM

About ERM:

ERM is an independent and global provider of environmental, social and corporate responsibility consulting and assurance services. Over the past 4 years they have worked for over half of the world’s 500 largest companies, in addition to numerous governments, international organisations and NGOs. They have 120 offices in 40 countries and employ over 3,000 people.

ERM’s Findings:

“Tesco appointed ERM to objectively assess and provide public commentary on its approach to measuring its global direct carbon footprint for the 2006/07 financial year. We found that Tesco has continued to take positive steps towards measuring and managing its carbon footprint. The majority of reported figures for its UK operations are based on sound measurement practices. This data represents approximately 46% of Tesco’s global direct carbon footprint. The remaining data - related to UK business travel, UK home delivery, approximately half of UK refrigerants and international operations’ carbon dioxide equivalent emissions - are based on part-measurements and extrapolations, as well as estimates, all of which we have assessed and found to be made on a sound basis.”

Environmental Resources Management Limited, May 2007

For further details please read the full ERM here. ERM Commentary.

*CO2e is a commonly used measure of emissions which takes into account harmful emissions from the 6 greenhouse gases identified by the Kyoto protocol. CO2e takes into account the relative damage done by each type of gas referred to as Global Warming Potential (GWP). For example, CO2 has a GWP of 1 while N2O has a GWP of 310).

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