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IB2500 Global Integrative Project

Individual Essay: Letter to Tesco’s CEO regarding United Nations Sustainability Development Goals

Word Count: 1999

Sarah Branson Environmental Freelance Journalist Leicester Place, N1 9GU

Dave Lewis Tesco CEO Garden City, J4 LU6

Tuesday 25th April

Dear Mr. Lewis and the board of director, In the current context of environmental urge, social distress and economic concern, I take the responsibility to warn you against your enterprise’s future. I am sure that you are aware that, in 2015, United Nations (UN) member states have agreed to 17 Sustainable Development Goals (SDGs) to achieve a better and more sustainable future for all. UN Agenda states that these targets should be met before 2030, which gives you 10 years to change Tesco’s sustainability strategy. Indeed, states are expected to act for these goals but also private institutions and multinational corporations. As UK’s first food retailer you have the responsibility to show the way to your competitors, 440,000 employees and weekly 80 million customers (Tesco, 2019). In this letter, I will try to explain why Tesco’s UK current strategy regarding sustainability and SDGs is not efficient. Then, I will propose roadmaps following the SDG Compass Guide framework (Appendix 1). To convince you I will only focus on three SDGs: Responsible Consumption, Gender Equality and, Protection of the Planet.

Your current sustainable strategy is not efficient: Tesco’s 3 sustainability pillars are coherent with SDGs but aren’t well implemented. In the most recent reports, your sustainability strategy uses three pillars: People, Product, Places (Tesco, 2019). Tesco’s sustainability strategy seems articulated around SDGs, for each pillar we can associate SDGs: Responsible Consumption and Protection of the Planet are linked to Product and Places, and Gender Equality is linked to People. In fact, Tesco’s website displays a report called “Contributing to UN SDGs” where Tesco’s targets, actions and progress information are listed (Tesco, 2018). I will try to summarize briefly Tesco’s initiatives and critically assess their limits.

The most important SDG for you as a retailer is inevitably Responsible Consumption. For Tesco, this issue is twofold: food-waste and packaging. Regarding food-waste, Tesco reduces it by giving residuals to several partners. However, in 2016, 0.4% of its food sales is wasted, which equals to 42,680 tones. I consider that this number is not sufficient considering the actual global food crisis. Also, I have noticed on Tesco’s report, that the target of 0% of food “safe for human consumption will be wasted by 2017” (Tesco, 2019) is not met: in 2018 27% are still wasted. These key figures show the gap between what Tesco communicates to its shareholders-customers and the reality of their actions. Regarding packaging, “87% of Tesco’s own brand packaging is widely recyclable” (Tesco, 2018). Obviously, this criterion is very subjective, and we have no information on what “widely” means.

Gender Equality is also important in your SDGs strategy since you employ more than 440,000 people. In the 2018 annual report, Tesco aims to create an inclusive enterprise where “everyone has equal opportunities”. This commitment is visible with Tesco’s gender pay gap of more than half the 17,9% UK median (ONS, 2018). Nevertheless, I think that further improvement can be made. A recent scandal reminds us of the legal accountability regarding this issue: Tesco’s workers sued you in July to secure equal pay, which could lead you to pay £4bn (The Guardian, 2018). However, pay is not the only benchmark to measure gender equality at work (Sarvaiya and Eweje, 2016). Equal opportunities have to be taken into

consideration which Tesco has failed to do: annual reports confirm that only 3 out of 13 board members are female and 75% of senior managers are male (Tesco, 2018). These numbers are shocking considering Tesco’s statement regarding equal opportunities.

Finally, the Protection of The Planet is a complex topic. Thus, I will only focus on carbonemission. Indeed, Tesco has established the ambitious target of zero-carbon-emission for 2050. Environmental commentator George Monbiot claimed that Tesco was imposing itself “higher standards than any government would dare impose on them” (Monbiot, 2007). He adds that Tesco is no greener than its competitors and record an unsustainable growth. Therefore, is this target achievable?

At first sight, thanks to your sustainability communication Tesco seems involved in SDGs with many initiatives. However, their critical evaluation is disappointing. Despite many initiatives, partnerships and statements, Tesco meets very few of its targets. Overall, your position in sustainable development is linked with greenwashing. This marketing strategy is a shame since potential opportunities are created when businesses are truly striving to meet SDGs (Braga Junior et al, 2018).

SDGs as a strategic importance: Responsible Consumption and its sub-concerns food-waste and packaging have strategical importance for Tesco. Indeed a study conducted by the thinktank ReFED reveals that “foodwaste represents a US$18.2 billion opportunity for grocery retailers in the US”. Regarding packaging, consumers are willing to pay higher prices if products have eco-friendly packaging (Magnier and Schoormans, 2015). Therefore, by reducing food-waste, Tesco could save money and invest in recyclable packaging. Tesco will then increase its revenue since customers would pay higher prices for sustainably packaged products. This process is a virtuous cycle: increase sustainability by encouraging responsible consumption while increasing the firm’s revenue.

The link between performance and Gender Equality is no longer a debate. In fact, countless studies confirm that with greater gender diversity at top management, businesses show lower

risk and deliver better performance (Perryman, Fernando and Tripathy, 2016). Since Tesco’s two largest competitors, Sainsbury and Asda respectively have 2 out of 10 and 1 out 6 women sitting on their board of directors (Sainsbury, 2018 and Asda, 2019) you have the opportunity to gain a competitive advantage.

Finally, Protection of the Planet and especially zero-carbon emission is vital for Tesco: its direct carbon footprint is 2.6 million tons of CO2 per year. This huge number could become a financial issue since the European Commission intends to create taxes for great polluters (European Commission, 2019).

Now that I have explained the strategic importance of Tesco investing in SDGs I am offering a potential 10-year roadmap for each SDG that I have focused on. These recommendations are based on Tesco’s current strategy and the implementation problems related to their initiatives.

Alternatives and improvements can be found. Responsible Consumption 1. Redefine targets 2. Meeting with current food-waste partners

6. New laws/ agreements 7. Improving consumer awareness

3. Employ experts in process performance improvement 4. Improve demand forecast 5. Meeting with government and industry leaders

10. Meet each adjusted target thanks to improved strategy, partnerships and consumer involvement

8. Assess progress made and adjustment if necessary 9. Improve transparency and availability of information

1 As we mentioned, Tesco’s targets and statements regarding Responsible Consumption are unclear or unmet, it is crucial for Tesco to reunite experts and set new targets for 2030: -

0.1 % of food sales wasted

-

10% of food safe for human consumption wasted

-

100% of own-brand packaging recyclable

2 Then, Tesco will meet with current partners to update them with new strategies, improve communication, coordination. 3 Afterwards, Tesco should focus on waste, which is linked closely to mismanagement and inventory (Thürer et al, 2016). Tesco will enroll Process Performance Improvement experts to work on Tesco’s chain thanks to “waste focus” concepts: Lean, TQM and BPR (Slack et al, 2016). 4 To support this mission, investment in demand forecasting is essential. These two actions will be costly for Tesco but the return on investment should be considered. 5 In addition to internal changes, Tesco could meet with competitors and suggest laws supporting food recycling. Indeed, if Tesco is the only market actor investing, its competitivity would be reduced. France and Italy have already adopted similar incentives (Mourad, 2016). 6 These new laws should be implemented in two years. 7 In parallel, Tesco could focus on improving consumer involvement. A successful example is Carrefour. The French retail leader recently announced that zero-waste alternatives were now available for fish, meat and cheese counter section (Carrefour, 2019). Though, a behavioral experiment shows that consumer replies to food-waste awareness campaigns are limited

(Jagau, Vyrastekova, 2017). Therefore, further studies are necessary to analyze campaigns efficacity and optimize Tesco’s investment. 8 At the mid-stage of the roadmap, a full evaluation of progress is important so that Tesco can adjust if necessary. 9 In addition, improvements in transparency and data availability are crucial so that consumers feel involved in processes. 10 Thanks to all these initiatives, Tesco should be able to meet the Responsible Consumption goal by 2030.

Gender Equality 1. Press conference 2. Pay compensation

5. Creation of 2 programs: HR Awareness Female Leadership

3. Meeting with NGOs 4. Setting of parity goal

7. Tesco becomes an example of gender equality

6. Assess targets, adjust if necessary

1 First, Tesco would respond to the recent scandal by organizing a press conference apologizing for their mismanagement of Gender Equality. They should announce their will to improve this concern 2 and compensate for the gender pay gap to female workers. This initiative will be costly, you will have to capitalize on it by communicating largely. 3 Then, Tesco would meet gender equality focused NGOs and generate realizable solutions to create a more equal enterprise. 4 This discussion would also lead to the setting of a new target for 2030: full parity at every managing jobs. 5 Two internal initiatives will be launched after two years: HR gender equality awareness program and free leadership training for every voluntary female employee. Even if it will lead to huge investments for Tesco, these two measures have already proven their efficiency in other organizations (Adamson et al, 2016). 6 At the midstage of the roadmap, a full evaluation of progress is important so that Tesco can adjust if necessary. 7 The parity targets will be met in 2030 and you will become an example of gender equality in the industry.

Protection of the Planet

1. Redefine targets 2. Meeting with government and NGOs Now

6-Months

9. Meet targets thanks to improved strategy, partnerships and consumer involvement

6. Improve consumer awareness on meat consumption 2-Years

3. Investment in green vehicle 4. Start to switch to clean energy 5. Redefine a more local and shorter SC

5-Years

10-Years

7. Assess progress and adjust 8. Remove all high carbon footprint goods from shelves

As we mentioned, the 2030 zero-carbon target is not achievable. 1 Therefore, Tesco needs to invest money and time to set a new target with the help of environmental experts: 80% reduction of its current emission. 2 In the meantime, Tesco will meet with government and NGOs to brainstorm on actions. Various initiatives will result from these meetings: 3 invest in green vehicles, 4 switch to clean energy and 5 redefine a local and shorter supply chain. Tesco will continuously improve its sustainability over the given period thanks to these strategies. Public communication will balance the investment made for these gatherings by increasing Tesco’s brand image. 6 Then, Tesco will help consumers contribute to SDGs by creating a campaign raising awareness on meat consumption, which has a huge impact on sustainability (Pohjolainen et al, 2016). However, studies show that conscious consumers regarding meat consumption impact do not change tremendously their own consumption (Graham, Abrahamse, 2017). 7 Similarly to the other roadmaps, the 5-year step will be used to assess progress and adjust in targets if necessary. 8 Additionally, to meet carbon targets, Tesco will engage to increasingly remove high carbon footprint goods from shelves.

In a nutshell, despite many communication initiatives, partnerships and statements, Tesco meets few of its targets. This overall “greenwashing” strategy is a pity since numerous benefits are possible when businesses engage truly with SDGs. The three roadmaps I proposed are inevitably interrelated since they involve some similar actions. Furthermore, they are not exhaustive, and we assume that Tesco will continuously focus on mentioned initiatives rather than punctually concentrate their resources on one action. Lastly, many other strategies are possible and could be subject to further studies. I hope that you understand my concerns regarding your sustainability strategy and consider these propositions.

For further queries or discussion, I am at your disposal.

Appendices SDG Compass

Sdgcompass.org. (2019). SDG Compass – A Guide for Business Action to Advance the Sustainable Development Goals. [online] Available at: https://sdgcompass.org/ [Accessed 23 Apr. 2019].

Tesco’s UK PEST Analysis Political Government policies encourages mix of job opportunities

Economical Social- Cultural UK economy under Aging population, older recession since 2008 à people tend to eat less people eat out less, more money spent on Rise of online shopping groceries Increasing consumer Financial uncertainty à environmental consumers spend less awareness: organic and on premium products recyclable products Rise of UK labor cost

Personal researches

Technological RFID Technology Diversification of payment possibilities

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