Tesco is a retail company based in the United Kingdom (UK). It handles 80 million weekly transactions and operates over 6,800 stores across the world. The UK and Republic of Ireland geography is the largest business segment in the group, with over 3,700 stores accounting for 79% of group revenue. Other business segments include retail divisions in Central Europe (Hungary, Slovakia and Czech Republic) and Tesco Bank. Tesco sources its products from 73 countries and works with 20,000 farmers in the UK alone to source fresh produce.
Tesco ranks 1st amongst food retailers and 6th in the food and beverage processor segments, highlighting that it is a leader in both areas. Tesco performs strongly in all measurement areas. In environment, it ranks 1st amongst food retailers and 9th amongst processors, with leading practices across multiple topics, notably on protein diversification and GHG emissions. Similarly, Tesco performs strongly in nutrition, where it ranks joint 2nd amongst retailers and joint 12th amongst food and beverage processors, due to its disclosure on most indicators and provides quantitative data and time-bound targets to support its activities. Nonetheless, there is an opportunity for the company to improve further, notably in governance and strategy. While the company provides strong disclosure on its overall sustainable development strategy, Tesco could report more on how it engages stakeholder when formulating this strategy, an area where it currently lags against its peers.
Scope 1 and 2 greenhouse gas emissions
Tesco commits to reducing scope 1 and 2 GHG emissions 60% by 2025, using 2015 as a baseline year. The targets covering GHG emissions from company operations (scope 1 and 2) are consistent with reductions required to keep global warming to 1.5 degrees and have been approved by the Science Based Targets Initiative (SBTI).
Tesco discloses a time-bound target to increase the sales of plant-based meat alternatives by 300% across its operations by 2025. While the company reports progress against this target with figures from the UK, this is not across the entire group. Going forward, the company can further improve its performance by reporting progress at the group level.
Tesco discloses an animal welfare policy that covers all species, products and geographies for its own-label products. This policy addresses key animal welfare issues in its supply chain that applies to all species, geographies and products. The company also discloses evidence of processes to implement this policy, including third-party certifications and audits. This includes reporting progress against animal welfare targets in an Animal Welfare Progress Report. However, the animal welfare policy does not extend beyond its own label, offering an opportunity for the company going forward.
Health and safety of vulnerable groups
Tesco identifies that vulnerable groups (including migrant and female workers) are particularly vulnerable to health and safety risks in its supply chain. To address this, Tesco confirms that its human rights due diligence process includes a risk assessment. This considers five metrics that have the potential to increase the vulnerability of workers and how the company can tackle the issue. However, it does not require its suppliers to identify and address health and safety risks to vulnerable groups, presenting an opportunity for the company in future reporting.
Forced labour Tesco commits to prohibiting forced labour in its own operations and supply chain. In addition, the company commits to respecting freedom of association and workers’ rights to bargain collectively and requires the same from its suppliers. Tesco discloses its process for monitoring for the presence of forced labour in its operations and supply chain, which includes mandatory Sedex registration and annual auditing for high-risk suppliers. While reporting on the number of cases with modern slavery indicators identified in its own operations and supply chains, Tesco has an opportunity to disclose quantitative evidence demonstrating progress on eliminating forced labour over time.
Sustainable development strategy
Through its Little Helps Plan, Tesco discloses time-bound targets for its most relevant sustainability topics and reports progress against them. This includes disclosing how it identified and prioritised these topics through a materiality assessment. It also discloses its long-term sustainability strategy, which covers sustainability topics across the three benchmark dimensions Nonetheless, there is an opportunity for the company to disclose targets across more social topics, as well as aligning its targets across the entire value chain to improve further.
Governance and accountability for sustainable development
Tesco discloses that it has a Corporate Responsibility Committee. This is chaired by an independent board-level, non-executive director and includes five board-level directors and two members of the Executive Committee. The company confirms this is the highest governance committee, and that oversight of and accountability for the company’s sustainability strategy lies with this body. However, Tesco does not disclose its highest governance body’s remuneration policy regarding sustainability.
While Tesco reports that it undertakes stakeholder engagement activities, it does not disclose the outcomes of these activities and how it has integrated them into its wider sustainability strategy.
Protection of terrestrial natural ecosystems
Tesco discloses targets for achieving deforestation and conversion-free (DCF) supply chains for some of its high-risk commodities. This includes DCF palm oil by 2020 and DCF soya by 2025. However, the company does not have a target for all of its relevant high-risk commodities, including cocoa and coffee, nor does it report the proportions of its commodities that are currently deforestation-free and sourcing regions for all of its high risk commodities, presenting an opportunity for the company for future reporting.
The company does not disclose that it is reducing water withdrawals across its operations and supply chain. Moreover, the company does not disclose a time bound target to reduce water consumption, presenting an opportunity for the company for future reporting.
Availability of healthy foods
Tesco is committed to increasing the availability of healthy foods. It discloses quantitative evidence to this effect, including that it has eliminated 22 billion calories from its sandwich range by reducing the fat and added sugar, and 8.2 billion calories from its cakes and morning goods through reformulation and changes to portion sizes. Tesco also clarifies its definition of ‘healthy’ (based on the UK government’s nutrient profiling model) and discloses a target to increase the proportion of sales of healthy foods to 65% by 2025. However, it has yet to report progress against this target across all geographies, notably in central Europe.
Clear and transparent labelling
Tesco has a commitment to comply with national regulations regarding labelling and to provide nutritional information on key relevant nutrients and portion sizes through back-of-pack (BOP) labelling. Moreover, the company reports that its products also include guideline daily amount recommendations and front-of-pack (FOP) labelling information. However, the company does not disclose the percentage of products for which labelling commitments (both FOP and BOP) have been rolled out.
Tesco has a commitment to market its products responsibly, particularly to children, which aligns with both national and international guidelines. Moreover, the company discloses examples of this in its reporting, such as through its Free Fruit for Kids in-store initiative. However, Tesco does not disclose the proportion of marketing budget spent on promoting healthy foods, presenting an opportunity for the company going forward.
Tesco discloses how it determines a living wage for the regions where it operates, using the sustainable procurement model developed by the Sustainable Trade Initiative for some of its suppliers. However, the company has not yet achieved paying all workers a living wage, nor set a target to do so. Moreover, the company has an opportunity to demonstrate that it is working towards paying a living wage across its supply chain.
While Tesco commits to prohibiting child labour in its own operations and requires its suppliers to adhere to the same standard, it has an opportunity to disclose a policy requiring its suppliers to have an age-verification system in place. Indeed, while Tesco states that it requires suppliers to verify the age of job applicants, this is only for high-risk countries and does not cover 100% of suppliers.
Core social indicators
The core social indicators are part of the social inclusion measurement area. These indicators assess societal expectations of business conduct that companies should meet if they aspire to be part of a system transformation that leaves no one behind.
Thanks to its publicly available policies and commitments across all key topics, Tesco performs strongly when it comes to respecting human rights, with high disclosure on every topic. It provides commitments to respect human rights and the ILO core labour rights as well as disclosure on how it identifies and assesses its salient human rights risks and takes action to address them. Moreover, the company has grievance mechanisms in place for its operations and supply chain, which it confirms is accessible to both potentially affected workers and external parties.
Tesco discloses information on all topics related to providing and promoting decent work. However, it can improve its reporting on these topics by providing greater disclosure and metrics which support its statements. For example, the company could provide greater disclosure on how it monitors the health and safety performance of its supply chain, or confirm that all overtime work must be consensual and be paid at a premium rate. In addition, Tesco can strengthen its commitment towards paying a living wage, supporting collective bargaining and disclosing workforce diversity.
Tesco publicly commits to protecting personal data and has a privacy statement on the use of personal data. On responsible tax practices, while the company has a global tax policy, it can improve its disclosure by reporting on income tax payments on a country-by-country basis. Moreover, Tesco can improve disclosure regarding anti-bribery and anti-corruption clauses it includes in contracts with its supply chain partners. Similarly, Tesco can also strengthen its reporting on responsible lobbying and political engagement.