Business Climate Guidance Case Study: Tesco

Tesco aims to become net zero across the group by 2050 and net zero across its UK operations by 2035. These targets have been divided into milestones. The first was to achieve a 35% emissions reduction by 2020 – with the group exceeding its target.

Electricity consumption is a key factor in Tesco’s emissions, accounting for 65% of its carbon footprint. The company has switched to 100% renewable electricity across almost the entire group. This has been paired with a large focus on energy efficiency across its stores. New energy efficiency programmes have led to efficiency gains in logistics. Lights have been replaced with LEDs, and energy efficiency technology installed in fridges. In addition, staff and drivers have been trained to improve the energy efficiency of operations.

Tesco is supporting new approaches to generating renewable energy. It is exploring working with start-ups/SMEs in the energy generation space to help kickstart their business. This approach has been tailored to London where solar panels are not always appropriate for shops (as they’re often within other buildings). Instead, wind turbines have been introduced at depots and stores that can accommodate solar panels have been identified and fitted out. Tesco has also focused on reducing emissions from transport – both for its own fleet and for visiting customers. It has committed to transitioning its entire 5,500 home delivery vehicles to electric vehicles by 2028. It already operates 30 electric vans out of the London depots. It has also pledged to help customers switch to electric vehicles. Its carparks will help create the largest retail-based network of chargers, targeting 2,400 chargers over 600 stores.

Key drivers:

• Responsibility: As the UK’s largest supermarket with over 300,000 employees, Tesco recognises its responsibility in working towards a safer world.
• Global supply chains: Climate change already causes significant disruption through droughts, wildfires and crops failing. Climate action is critical to risk mitigation.
• Investors: Environmental and social governance is growing in importance for all investors.

Challenges:

• Network capacity constraints: Decarbonising adds additional demand pressure onto the electricity grid. Increasing electrical capacity can be costly and complex.
• Scale: Many of the projects are very complex, requiring significant resourcing, time and energy to complete them with different needs across the different stores.

Benefits:

• Community engagement: Tesco has gone further than just company operations and supply chain by helping customers that want to switch to electric vehicles.
• Impact: Tesco’s size means it can significantly influence the low carbon sector. For example, by supporting start-ups develop new approaches to energy generation.

Read the Retail framework