Tesco PLC – Annual report – 25 February 2023
Industry: retail
Climate (page 18)
Commitment
Climate change remains the biggest and most complex challenge facing the world, with its impacts felt across our supply chain, operations and the communities we serve. The food sector is responsible for more than a third of greenhouse gas (GHG) emissions. We are committed to playing a leading role in helping to tackle these emissions and avoid the most severe consequences of climate change. We strengthened our commitment to being carbon neutral across our Group operations by 2035 and hitting net zero by 2050 across our full value chain, aligned to 1.5˚C.
These targets act as the overarching goal, recognising that bringing nature and climate together into one holistic environmental strategy is critical, alongside packaging and food waste, healthy, sustainable diets, sustainable agriculture, and protecting forests. With these agendas orientated towards our overarching net zero target, it allows us to explore new opportunities through their interconnectivity and ultimately nurture entire ecosystems that are truly sustainable end to end.
Our goal to reach net zero needs transformational change in how we grow, produce and consume food. To achieve this, we are developing detailed, timebound plans to decarbonise key areas of our emissions footprint, particularly the production of our most material agricultural products.
Recognising that we cannot achieve our climate ambitions alone, we continue to promote cross-industry action and advocate to align public policy with net zero across our markets. We do this through our flagship partnership with WWF, as well as our membership with forums such as the Aldersgate Group and the Climate Group, and involvement in leading industry initiatives such as the WRAP Courtauld Commitment 2030 and the British Retail Consortium’s Climate Action Roadmap. We have also made commitments to RE100 and EV100, pledging to reach 100% renewable electricity and 100% electric van fleets respectively.
Integration
In 2022 we relaunched our purpose, placing sustainability at its core. We also added climate emissions to our Big 6 KPIs and introduced ESG metrics into our executive remuneration policy. The Performance Share Plan includes three ESG targets, including our near-term emissions reduction milestone, each with an equal weighting of 8.33% (25% in total). In 2021 climate became a standalone principal business risk, recognising the critical impact climate change has on our business. See page 14 for details on our Big 6 KPIs.
To underpin our new purpose and substantiate our public commitments, we have established Group-wide, interdepartmental governance with accountability across the leadership team. Our governance groups maintain oversight of progress made against our interim decarbonisation milestones and have accountability for ensuring the business delivers on climate commitments.
As a result of integrating climate change action throughout our business, we have been able to make further progress on engagement and investment in decarbonisation.
Working toward decarbonisation
The majority of our GHG emissions come from producing the things we sell, and customers using what they buy from us, mainly from fuel and energy. We are more able to influence the way things are produced than how they are used, so our strategy focuses largely on decarbonising the upstream supply chain. While transport, running our stores and waste are relatively smaller contributors, they are still significant and lie almost fully within our control and therefore have a prominent role in our decarbonisation strategy. Our TCFD report starting on page 20 provides more detail on our emissions footprint.
Scopes 1 and 2: running our stores and logistics
To date, we have achieved a 55% absolute emissions reduction in our own operations vs a 2015/16 baseline. This has largely been driven by switching to renewable electricity; however, we have maintained consistent focus on driving energy efficiencies while making significant inroads into decarbonising our remaining key hotspots. Our Group Scope 1 emissions now account for around one million tonnes of CO2 equivalent (tCO2e), split roughly a third each across heating, refrigeration and transport.
– Refrigeration – we are switching the refrigerant gases in our store fridges to reduce emissions quickly and replacing depreciated systems with recovered CO2 systems to minimise emissions.
– Heating – we have installed heat pumps in 13 stores in the UK and are trialling 100% heat pump heated stores in Czech Republic and Slovakia.
– Transport – as signatories of EV100, we are committed to having a fully electric home delivery fleet by 2030 and installing EV charging for customers and colleagues.
Further information on the steps we have taken to drive energy efficiency are contained within the Streamlined Energy and Carbon Reporting disclosure on page 105.
We have already met our 2030 ambition to switch to 100% renewable electricity in our own operations across the Group. Our strategy is designed to ensure we increasingly source our electricity directly, going beyond renewable energy certificates and supporting the development of new renewable assets, helping bridge the gap in investment and infrastructure needed to hit the UK’s net zero target. Our target is to source 60% of our electricity by 2030 from power purchase agreements (PPAs) and onsite power generation.
Underpinning this work to transition to zero carbon energy sources, it is imperative that we continually work to minimise our overall energy demand, by investing in efficiencies across our logistics and store operations. This is a critical enabler to ensure we have sufficient capacity to electrify the elements of our operations that continue to rely on fossil fuels.
Scope 3
Our 2019/20 end to end footprint showed that more than 90% of our GHG emissions sit in our value chain (Scope 3). Building a comprehensive supplier engagement programme, encouraging carbon reporting and reduction and finding active opportunities to decarbonise our Own Brand product range are critical steps in our net zero journey. These programmes will feed into our upcoming transition plan in accordance with UK regulatory requirements and the latest guidance from the Transition Plan Task Force.
In 2022, we successfully mapped close to two-thirds of our UK grocery suppliers’ operational footprint. As a result of our engagement with suppliers, more than half of our top suppliers have already announced their ambition of setting a net zero plan and of validating their net zero targets with Science Based Targets initiative (SBTi). We are successfully tracking carbon and energy data from more than 87% of our clothing supply chain factories and close to 91% of our mills via the Sustainable Apparel Coalition’s Higg tool, giving us enough primary data to design targeted decarbonisation projects moving forward. For our Home supply chain, we will collaborate with Amfori in deploying their Business Environmental Performance Initiative tool to ensure similar coverage by the end of 2023.
To gather carbon and other sustainability metrics from our suppliers with a simplified and harmonised methodology, in 2023 we made a commitment to Manufacture 2030 with an ambition to scale up our carbon data coverage. The transition will enable us to reach more than 80% of our grocery supply chain in the UK, Czech Republic, Hungary, Slovakia and ROI, as well as subsidiaries, Booker and One Stop.
Engaging suppliers is an important element of our decarbonisation roadmap and we need to go further. Close to 25% of our footprint can be traced back to just 30 agricultural products where Tesco frequently holds a significant share in terms of total volume. Therefore, we will set specific decarbonisation work programmes in these emission hotspots, primarily working through our Tesco sustainable farming groups as well as our agriculture forum.
Some of the recent initiatives we have launched from early 2023 include the UK’s first commercial trial of low-carbon fertilisers with our five largest field vegetable suppliers in the UK. The roll out of the LEAF Marque Standard certification by 2025 for all domestic and international fresh produce suppliers, and on-farm carbon data tracking in our main meat, fish, poultry and eggs, and dairy supply chains. In preparation for our transition plan disclosure, our plan is to design tailored decarbonisation roadmaps for these agricultural products with the aim of driving down emission intensity.
As a food retailer, almost 40% of our emissions sit downstream with our customers. Understanding the importance of helping customers to make more sustainable choices, in 2022 we launched our Better Baskets campaign. This campaign aims to signpost our customers to options which can be lower in environmental footprint, healthier and affordable at the same time, gradually leading the transition towards lower-carbon purchasing decisions.
More detail on how we are pushing forward with renewable energy sources and progressing our decarbonisation strategy can be found in our TCFD update on pages 20 to 24.
Page 105 extract
Streamlined Energy and Carbon Reporting (SECR) disclosures
A breakdown of our GHG emissions in accordance with our regulatory obligation to report GHG emissions pursuant to section 7 of the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 and the Companies (Directors’ Report), and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 can be found on page 19. We continue to implement initiatives to drive energy efficiency across our operations in support of our net zero ambitions. Examples include:
- Completing LED lighting upgrades: following upgrades in distribution centres and customer fulfilment centres, we have continued to roll out LED lighting across the UK estate improving lighting efficiencies in more than 560 stores, resulting in both front and back of store having LED lighting.
- Continued investment in an enhanced energy monitoring platform: insights from monitoring energy usage and key assets provide opportunities to further optimise energy usage and inform better decisions across our stores portfolio.
- Heating, ventilation and air-conditioning (HVAC): we continue to progress trials for low carbon solutions and drive market changes to support decarbonisation plans.
- Progressing use of Telematics and Hive route planning systems: in our home delivery vans and distribution fleet we continue to use telematics and improved planning systems, to gain best operational efficiencies, improving route plans which reduce mileage and energy requirements.
- Plans to introduce refrigeration units using CO2 as a refrigerant: over the next 12 months, units will be rolled out into distribution vehicles in the UK.
- Introduced electric LGVs into distribution centres: with plans to roll out more in 2023/24, as well as introducing refrigeration units into vehicles that harness solar power to power these units.
Task Force on Climate-related Financial Disclosures
TCFD
Climate-related financial disclosures
In addition to this TCFD report, we provide further information on climate change in the principal risks and uncertainties section, on page 41. You can also find details on our greenhouse gas emissions on page 19. We continue to consider the potential financial impacts of climate change in the cash flow scenario modelling within our viability statement on page 47 and impairment note on page 148 to 151.
Governance
We implemented an enhanced climate governance framework last year encompassing the Board, its associated committees and the Executive Committee. This year, we broadened the scope of this governance framework to include all major elements of our plans, reflecting our holistic approach to the delivery of our sustainability ambitions. In addition to climate, the governance framework now encompasses elements including food waste, sustainable agriculture, biodiversity, healthy diets, and packaging. As a result of this wider governance scope, we have made minor changes to the membership and titles of the committees involved, which are described in more detail below.
The Board is responsible for the long-term success of the Group and has ultimate responsibility for climate-related risks and opportunities. The Board’s most recent discussion was in February 2023. The Corporate Responsibility Committee oversees the Group’s social and environmental obligations, including climate-related matters, and is responsible for monitoring progress towards our commitments. The Corporate Responsibility Committee reviews progress to date and forward projections against our stated commitments through formal papers presented by and discussed with the relevant delivery teams. The Committee meets four times each year and has discussed climate on every occasion during 2022/23, with similar plans to discuss at all 2023/24 meetings. Further information about the activities discussed at the Corporate Responsibility Committee meetings can be found on pages 69 and 70. The Audit Committee monitors climate-related risk management, internal controls and reporting.
The Executive Committee reviewed our progress against our climate targets twice this year, in June and December 2022. In December, the Committee discussed and approved our broadened governance framework described above and our climate-related plans for the 2023/24 financial year. These discussions were led by the Chief Product Officer, as executive sponsor of our net zero climate commitment. The Executive Committee reviewed and approved the capital investments required to achieve our net zero objectives. These investments are fully integrated into our three-year strategic plan and our annual budget. The strategic plan and the budget are both reviewed and formally approved by the Board with reference to the capital and associated operating cost investments required to deliver our carbon reduction commitments. In 2023/24, the Board will oversee progress against the climate targets twice a year.
Reflecting the broader scope of our new planet-related plans, the Group climate committee has been renamed to become the Group planet committee. The change was endorsed by the Executive Committee in December 2022 and is designed to facilitate delivery of our purpose. The Committee provides strategic oversight and is responsible for ensuring the delivery of all our sustainability targets. These include interim decarbonisation and food waste reduction goals, climate risk management and our climate-related disclosures. The Group planet committee met twice in the past 12 months, in June 2022 and March 2023. The committee continues to be chaired by the Chief Product Officer and comprises representatives from significant business functions, which materially influence our ability to achieve our planet related commitments and regulatory obligations.
Three steering groups continue to underpin the implementation and compliance component of our planet governance structure. They are responsible for delivering initiatives to meet operational climate targets (Group operational decarbonisation steering group) and interim milestones, propel decarbonisation in our supply chain (planet steering group) and enable the business to report our progress (ESG reporting & disclosure group). These steering groups are chaired by senior leaders; our Chief Property Officer leads operational decarbonisation (Scope 1 and Scope 2), our Group Quality Director leads product sustainability, which encompasses our Scope 3 value chain decarbonisation, and our Group Finance team leads reporting and disclosure. The steering committees are more broadly supported by a number of cooperative workstreams that each focus on carbon reduction within material emissions hotspots across the business.
Risk management
Following the establishment of climate change as a standalone principal risk in 2020/21, reviews have been conducted at various levels including the Executive Committee and the Board. These include the identification and documentation of climate-related risks and the review and consideration of appropriate risk responses. This consolidated view provides an input to our review of the Group risk profile.
The most recent principal risk review was presented to the Board and Executive Committee in February 2023. Our sustainability efforts focus on our ability to create and preserve long-term value for our customers, colleagues, the planet and the communities we serve. To address the effect of climate change, Tesco has set sustainability targets, aligned to a 1.5°C pathway, and has committed to achieving net zero across Scopes 1, 2 and 3 by 2050. These sustainability targets are underpinned by plans and formal oversight through dedicated forums, which continue to provide support for delivering against our long-term targets. Further information about our principal risks and uncertainties can be found on pages 38 to 45.
We have reviewed and refreshed our approach to further embed the management of climate-related risks and opportunities into our enterprise risk management processes. Climate and sustainability task forces have been created for our Republic of Ireland, Central Europe and Booker businesses, and for categories including non-food and Tesco Mobile. We continue to track emerging climate regulations including any requirements for the reporting and disclosure of climate risks.
Metrics & targets
We underpin our net zero strategy with three key commitments:
1. reduce Scope 1 and 2 market-based emissions by 60% by 2025;
2. be carbon neutral across our own operations by 2035; and
3. achieve net zero across our value chain (Scope 3) by 2050.
In the 2022/23 financial year, we reduced our Scope 1 and 2 emissions by a further 3%pts, taking our cumulative reduction against a 2015/16 baseline to 55%. During the year, we invested more than £60m into decarbonising our refrigeration systems, aligned to our ongoing store refresh programme, and the electrification of our online delivery fleet.
In recognition of how critical sustainability is to our business success, our 2023 Performance Share Plan (PSP) continues to incorporate several sustainability metrics, following their inclusion for the first time last year. These include those for Scope 1 and 2 emission reduction; food waste reduction; and diversity and inclusion targets for our leadership teams. For more information on the sustainability metrics included within our PSP, see page 83.
You can find detailed GHG emissions data, including disclosure across Scopes 1, 2 and selected Scope 3 disclosure on page 19, we have reviewed the Group’s physical and transition risks and opportunities, the financial values at risk are quantified in the strategy section below and in the Principal risks section. We continue to review our targets and metrics and focus on disclosing recognised cross-industry metrics where these align to the risk and opportunities we identify.
Strategy
During the year, we continued to build on our internal climate-related risk scenario modelling capabilities. In partnership with Risilience, part of the Centre for Risk Studies at the University of Cambridge, this involved creating a ‘digital twin’ of our business.
The digital twin maps the key areas of our value chain and allows us to stress test our business under five warming scenarios, for both physical and transition risks. The output provides a range of financial value at risk impacts across several risk categories over the short to medium term, which are described in more detail below. Each risk type was assessed based on materiality and likelihood within the five-year time frame on which the quantitative modelling is based. We can also leverage the outputs from this model to estimate the longer-term exposure to each risk category. Our enhanced scenario modelling capabilities allow us to better understand the exposure of the business to the effects of climate change, build effective mitigation plans, stress test our organisational resilience and improve the execution of our net zero strategy.
The tables overleaf summarise the financial value at risk associated with three of the modelled risk categories (policy, consumer and technology) over the short to medium term (five years) and a qualitative assessment of how these risks could evolve over the longer term (10 to 20 years). The modelled impacts refer to transition risks and are quoted based on a 1.5°C pathway aligned to the Paris Ambition and Tesco’s stated targets, and a 3°C pathway aligned to the current warming pathway. We have quoted the financial value at risk below as a range, reflecting the uncertain and heavily assumption-based nature of climate-related modelling. We assess that our business has a high degree of resilience to the climate-related risks detailed below across a spectrum of warming scenarios, including one where warming is limited to 1.5°C. This assessment is based on a variety of factors, which include:
- a broad, comprehensive range of grocery products and core capabilities in adapting our existing ranges while launching new products to meet emerging consumer demands;
- an extensive plant-based meat alternative range, which we continue to innovate; and
- a geographically diversified sourcing base characterised by strong and established strategic relationships with suppliers across the globe, which gives us a natural hedge against weather extremities.
We modelled three further transition risks in relation to: the risk of climate-related litigation, the risk of a negative shift in consumer sentiment; and negative investor sentiment due to a perceived lack of action to address climate change. We believe that stakeholders recognise our sustainability commitments and the progress we have made to date. This includes our significant investment in the decarbonisation of our property estate and transport fleet, our market-leading sustainable product ranges, and the provision of the largest electric vehicle (EV) charging network of any UK supermarket.
We also considered the potential financial impacts the Group could face as a result of physical risks, largely driven by the potential for weather extremes and related to raw material supply, key facility risks, and market disruption. The geographically diverse nature of our supply base as well as our store and distribution network provides a degree of structural resilience. Our enhanced modelling capabilities allow us to understand the potential physical climate risks at a site level. This enables our property teams to ensure we have robust plans in place in high-risk flood zones to mitigate potential flood risks in the years ahead. The financial value at risk is not material either individually or in aggregate, and we have therefore not disclosed these separately.
Our focus for the 2023/24 financial year will be on further exploring each risk identified as part of this modelling and working with relevant business teams to develop our risk management and mitigation plans.
The Group’s three-year strategic plan integrates the delivery of our sustainability ambitions, of which the decarbonisation of our own operations is the most material in the short term. The strategic plan is reviewed and approved by the Board annually, including a review of the key decarbonisation initiatives and associated costs and capital investments. Our review process for proposed capital investments ensures we understand how different projects will impact our emissions levels. This enables us to balance the best carbon return for our investment, considering the maturity of emerging technologies and supply capacity. Beyond our three-year strategic plan, we have also created a capital investment profile and associated decarbonisation impact to 2035 to align to our own operations decarbonisation target.
We understand that our best strategy to mitigate our main physical and transition climate risks is to become a net zero business across the whole Group, entailing fast, large-scale, and effective decarbonisation of our operations and our supply chain. Therefore, in 2021 we announced a renewed commitment to be net zero across the whole Group and all GHG emission scopes by 2050, while maintaining our own operational (Scope 1 and 2) target of being net zero by 2035. As a company with a sizeable footprint in the agricultural sector (roughly 25% of our Group GHG emissions can be traced back to just 30 agricultural products), we are the first retailer in the UK to join the design and validation pilot of a decarbonisation target in the forest, land and agriculture (FLAG) sectors. The chart below shows the disaggregation of our footprint according to Scope 1, 2 and 3 GHG Protocol categories. Scope 1 and 2 have been updated with our 2022/23 emissions data and Scope 3 emissions are as of 2019/20.
Our priority will be to focus on finding the most scalable and effective solutions to accelerate our decarbonisation across all scopes. Our strategy will concentrate primarily on three main components:
1. continuing to reduce our operational footprint, with a focus on increasing energy efficiency, generating and directly procuring renewable electricity, reducing our dependency on fossil fuels across transport and our property estate and switching the refrigerants we use in our fresh network and stores;
2. enhancing supplier engagement across all business units, geographies and subsidiaries to ensure our supply chain is adequately disclosing footprint data and setting targets to reduce it; and
3. working directly with producers in our agricultural supply chains to identify opportunities to reduce and sequester land-based emissions associated with our own label product range.
We are committed to reaching net zero Scope 1 and 2 operations by 2035, on a 1.5°C aligned pathway. Since our baseline in 2015/16, we have reduced our Scope 1 and 2 Group footprint by 55%. While this has largely been driven by switching to renewable electricity, we have maintained consistent focus on driving energy efficiencies while making significant inroads to decarbonise our remaining key hotspots: transport; refrigeration; and heating.
We led early on electricity; in 2020 we reached our RE100 commitment to 100% renewable electricity 10 years ahead of our 2030 target. We designed our strategy to ensure we increasingly source our electricity directly via power purchase agreements, going beyond renewable energy certificates to help boost domestic UK renewable capacity. We have also installed wind turbines at our depots and solar panels on our store roofs, supporting our energy security. In total, onsite and offsite direct power deals will supply around a quarter of our electricity demand.
It is critical that we de-risk our business from stranded assets, write-off costs and potential future carbon legislation. We will do this by innovating early to scale up decarbonised operations in line with our pathway towards net zero. We are switching away from our depreciated HFC refrigerant systems to recovered CO2 systems. To replace gas boilers, we are trialling air source heat pumps and heat reclaim systems across the UK and Central Europe. We have several large fleets of vehicles to decarbonise. To date we have deployed 293 electric home delivery vans and are on track to be 100% electric by 2030 as we continue to replace fully depreciated diesel vehicles. This prepares us for the UK’s phase out of vehicles powered by internal combustion engine. We continue to trial various models across the UK and Central Europe as well as electrical refrigeration units in our chilled network.
Our transition to zero carbon energy sources is underpinned by a focus on continually reducing our overall energy demand, through investing in efficiencies across our logistics and store operations. This is a critical enabler to bolster our energy security, manage energy costs and secure sufficient capacity as we continue to electrify our operations.
Alongside our operational decarbonisation roadmap, we are setting a comprehensive Group-wide strategy to decarbonise our value chain. This is both upstream, with our suppliers, and downstream to support a sustainable transition in our customers’ purchasing behaviour. This helps both to mitigate the risk of consumers shifting to our competitors because of sustainability preferences and to insulate us against rising future carbon prices. Our Scope 3 emissions constitute more than 90% of our total emissions footprint. Upstream activities account for 50% of this, while 30% is driven by emissions from rearing, growing and transporting agricultural products, mainly within the animal protein categories. The remaining 20% is linked to the manufacture of our product ranges, including packaging and production of the fuel that we sell. Downstream activities represent 40% of our footprint including primarily emissions resulting from customers using our products. This includes cooking at home, preparational processes including washing and drying products, and the emissions associated with the fuel that customers buy from our petrol filling stations.
Our two main strategic priorities for our upstream emissions are strengthening our supplier engagement programme around carbon reporting and climate targets and working directly with farmers to scale up decarbonisation on farms. We have asked all of our direct suppliers to report their GHG emissions and set science-based targets, which should aim for net zero across all emission scopes and attain validation by the SBTi by the end of 2025. At January 2023, close to two-thirds of our UK suppliers by value of total cost of goods sold (COGs) report their operational footprint. They do this either through CDP or directly to Tesco by filling in a questionnaire that we circulate via the Tesco supplier network. Suppliers complying with our climate requirements are also eligible to join the UK retail sector’s first sustainability-linked supply chain finance programme. We launched this in 2021 in partnership with Santander, offering preferential invoice payment rates to climate-compliant suppliers.
In 2023, we will build on the success of our supplier engagement programme by joining Manufacture 2030, a global cross-industry software platform on which suppliers can submit their carbon data and other sustainability metrics to Tesco and our competitors. This will enable us to increase coverage of our suppliers’ climate compliance to go beyond UK suppliers and include an equivalent coverage of around 80% of all suppliers (in terms of COGs) across the Tesco Group. We will also continue our supply chain finance programme with Santander with a focus on supporting smaller suppliers who might require additional resources to be able to comply with the climate requirements.
Decarbonising our agriculture and animal protein supply chains is a priority to mitigate our transition risk. Our model has also mapped the physical risk associated with sourcing these products to understand where our exposure to at-risk commodities is greatest. Our main focus will be to decarbonise the three commercial categories with the highest dependency on these products. These collectively represent close to 40% of production emissions of which 75% is linked to our own label range: (i) meat, fish, poultry and eggs; (ii) bakery and dairy; and (iii) produce. Within these three categories, we have identified the main emission sources we must tackle. For example, in our ruminant supply chains, such as cattle and sheep, the focus will be on improving feed and protein efficiency while reducing methane resulting from enteric fermentation.
In monogastric animal supply chains, such as pork, poultry and aquaculture, the focus will be on ensuring that all feed comes from 100% deforestation and conversion-free sources, a target we have committed to implement by 2025. When it comes to fresh produce, we are working on reducing our dependency on fossil-fuel fertilisers. In early 2023, we launched our first commercial trial of low-carbon fertiliser options with our main field vegetable suppliers in the UK.
Moving forward, we will continue to pilot decarbonisation interventions through our Tesco sustainable farming groups (TSFGs), integrated by producers in the animal protein and produce sectors. We will also explore new ways to use supply chain finance to support our farmers in their green transition.
When it comes to our downstream emissions, we launched our Better Baskets campaign in 2022, which helps our customers make informed decisions on the sustainability of their shopping basket. Our Better Baskets on-shelf communication is available at all Tesco Extra stores and signposts consumers to a product range with enhanced sustainability credentials beyond carbon footprint alone. Our commitment is to ensure 65% healthy sales by 2025 in the UK & ROI, and 53% by the end of 2027 in Central Europe, which will require scaling up the sustainability performance of our product range. To that end, we will develop new product-level data collection platforms, such as Mondra. This UK-based sustainability data start-up aims to estimate the environmental footprint of our own-label product range by understanding their composition and the sourcing areas of their ingredients. We also continue to ask our TSFGs to provide sustainability information from their farms, so our commercial teams are better informed about the sustainability performance of our sourcing partners. To support the wider electrification of our customers’ vehicles, we have scaled up the network of pod points to more than 2,500 charging bays across 600 stores across the UK. We are also committed to cutting food waste across the supply chain by 50% by 2030. This is aligned with the WRAP Courtauld 2030 framework, which will also entail working in customer-led campaigns to reduce the waste of our products in customers’ households.
In line with UK Treasury regulatory requirements following COP26, Tesco will present our Group transition plan in accordance with UK regulatory requirements and guidance from the Transition Plan Task Force. This plan will give our stakeholders insight into our sector and product-specific decarbonisation plans as well as details of our supplier engagement programme and more information on our climate risk mapping and financial planning. To ensure alignment with the guidelines and recommendations of the Transition Plan Task Force, Tesco is part of a cohort of companies participating actively in the consultation phase for the document’s implementation guidance. Tesco also co-chairs, together with WWF, the working group tasked with developing the Sectorial Guidance for Food and Agriculture, with a first draft expected to enter consultation phase in August.
Next steps
Our priorities in 2023/24 will include further developing our internal capabilities in climate-related scenario modelling through our partnership with Risilience. We are contributing closely to the Transition Plan Task Force in preparation of our upcoming transition plan. We will also be updating our end to end footprint in this context, considering all available improvements in methodology and emission factors, as well as inclusion of primary data collected from our supplier base via Manufacture 2030.
Listing Rule 9.8.6R Compliance Statement
Tesco PLC has complied with all of the requirements of LR 9.8.6R by including climate-related financial disclosures in this section (and in the information available at the locations referenced therein) consistent with the TCFD recommendations.
Principal risks and uncertainties (extract)
Accounts examples 