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Corporate Responsibility Report 2011

www.tescoplc.com/corporate-responsibility

4.2m
customers with Tesco active Lo in Thailandtus

proViding custoMers WitH HealtHy cHoices


Achievements elped over 7 million people get active across the Group, H including 4.2 million in Thailand alone eformulated over 600 products in the UK to reduce their R sugar, salt or saturated fat content articipated in 31 Community Alcohol Partnerships in P the UK, working collaboratively with alcohol retailers, schools and the police to encourage responsible drinking Challenges

aking health programmes such as 5-a-day relevant M in more of our markets romoting healthy products across the Group, driving P customer demand in markets where it is currently low

64.3m
Challenges

actiVely supporting local coMMunities


Achievements ore than doubled the number of Community Champions M across the Group from 270 to over 650 onated 64.3 million to charities and good causes across D the Group rovided access to education for children and adults on P low incomes across the world esponded to emergency relief efforts, including the R earthquake and tsunami in Japan

donated to charities and good causes

nsuring community programmes feel local and relevant E wherever we operate sing our online presence and social media to promote U community engagement inding the most effective ways to help quickly when F disasters strike

creating good joBs and careers


Achievements Created 21,000 new jobs across the Group nsured that 6.2% of staff are being trained for a higher E level job ncreased pay for under-18s to match adult pay in the UK I reated 667 jobs for long-term unemployed people C through eight new UK regeneration schemes ncreased the number of women in senior management I positions Challenges

new Regen era Partnership tion across the s UK

oing more to ensure women are better represented D at senior levels wherever we operate Developing more leaders in each market nsuring that we offer the most competitive pay and E benefits packages nderstanding how engaged our employees are and U working to increase their engagement

Overview

Achievements and challenges


Below is an overview of our key achievements and challenges over the past year. More information can be found online. Our performance against our Key Performance Indicators is on page 58.

1bn
Challenges

Buying and selling our products responsiBly


Achievements Sold 1 billion of locally sourced products in the UK 25% of own-brand canned tuna caught by pole and line in the UK ommitted to zero net deforestation by 2020 C uilt ethical standards into our core preferred supplier B scheme in UK clothing 82% positive responses in Supplier Viewpoint survey

locally sou products srced o in the UK ld

ringing about positive change in responsible sourcing B where we do not have a strong own-brand presence etting responsible sourcing onto the global agenda G ackling the water footprint of our supply chain T

caring for tHe enVironMent


Achievements amed the top retailer in the Carbon Disclosure Projects N 2010 UK FTSE 350 and Global 500 reports for carbon reporting and performance howed that greener growth is possible: we reduced S absolute UK carbon emissions for the second year running pened our first overseas zero-carbon store in the O Czech Republic arbon footprinted over 1,000 and labelled over 500 C everyday products in the UK Challenges

No.1

in 2010 etailerDisclosure r n CarboProject

rowing our carbon footprinting programme to accelerate G the number of products footprinted and labelled nvolving international suppliers in our target to reduce I supply chain emissions by 30% by 2020 inding solutions where carbon reduction is in conflict F with wider sustainability issues ncreasing customer understanding and use of I carbon labels

Overview

Environment, climate change an d waste

p20

oices Healthy chter t and be n informatio

p32

Contents
Overview
achievements and challenges chief executives introduction tesco around the world our approach creating a sustainable growth business

Buying and selling our products responsibly


Providing customers with healthy choices
2 4 6 8 Healthy options Better information active lifestyle progress on selected 2010/11 priorities

p10

32
35 35 36 39

Actively supporting local communities


stronger, growing communities community initiatives charitable giving progress on selected 2010/11 priorities

40
43 44 45 47

Buying and selling our products responsibly


suppliers responsible sourcing progress on selected 2010/11 priorities

10
13 15 19

Caring for the environment


climate change Buildings transport supply chain customers Waste, packaging and recycling progress on selected 2010/11 priorities

20
22 26 27 27 28 30 31

Creating good jobs and careers


rewards and benefits training and development communication inclusion Health and safety progress on selected 2010/11 priorities

48
51 53 54 55 56 57 58 60 61 62 64

Governance
Key performance indicators priorities for 2011/12 Managing corporate responsibility How we listen to improve our strategy awards a view from forum for the future

Overview

Welcome to Tescos 2011 Corporate Responsibility Report.

Responsibletrading

This report is about how we create value for our customers by respecting their values and staying true to our own. Its about doing business in a socially responsible and sustainable way. Unless otherwise stated, the statements and data relate to our financial year 2010/11, the period March 2010 to February 2011. This is the period we are referring to when we describe an activity as taking place this year. More information can be found on our website about how we approach corporate responsibility in each of our markets, specific initiatives and targets, as well as case studies and video content showing what it means for Tesco day-to-day.

Environment Health Community

This report and online content together form the basis of our reporting on corporate responsibility.

People Governance

TescoPLCCorporate Responsibility Report 2011

Overview

Chief Executives introduction


Welcome to my first Corporate Responsibility Report as the Group CEO at Tesco.
IhavehadtheprivilegetoserveTescoanditscustomersfor 37years,firstintheUKandmorerecentlyinourgrowing internationalbusiness.Ihaveseenatfirsthandhow,despite theenormousdiversityofthe14countriesinwhichweoperate, ourcustomersandourstaffexpressthesamedesires:tolead healthylives,tobepartofstrongcommunities,tocareforthe environment,andtogivetheirloyaltytobusinessesthatprovide goodjobsandbuyandselltheirproductsresponsibly. Wegiveexpressiontotheseuniversalthemesthroughour CommunityPromises,andtheyformthebackboneofour corporateresponsibilitywork. Lookingbackoverthepastyear,manyfamiliesinmanycountries havefoundeconomicconditionschallenging.LedbytheAsian economies,prospectshavesinceimprovedandwecananticipate abrighterfuture,evenincountrieswherethepaceofrecoveryis slow.Tescoismakingapositivecontributiontoeconomicrecovery inmanymarkets:investingingrowth,buildingrelationswithnew suppliers,andprovidingrewardingjobsandcareers,notonly inretailandfinancialservicesbutalsoinemergingareaslike low-carbonengineering,logisticsandresourcemanagement. Throughouttheglobaldownturn,byimprovingproductivityand bybearingdownoninflationandothercosts,Tescohasplayeda bigpartinhelpingfamiliesbalancetheirbudgets.Wemustnever forgetthatprovidingsafe,nutritiousandaffordablefoodisone ofourmostvaluedcontributionstocorporateresponsibility. Attimeslikethese,peopletendtovaluetheirlocalcommunities more,butatthesametimetoworrythattheyareundergreater threat.WhetheritisexpressedthroughProfessorRobertPutnams seminalworkonthedeclineofcivicengagementintheUS,or throughUKPrimeMinisterDavidCameronsideaofaBigSociety, wecanseeadesiretostrengthenthefabricofcommunitiesin difficulttimes.Businessmustplayapositiveroleinthiswork, andbusinesseslikeTesco,whichliveandbreatheinthevery heartofcommunities,haveaparticularresponsibility.Iamthe firsttobelievethatthereisalwaysmorewecando.ButIam pleasedthatwearemakingarealcontribution,whetheritis throughourSchoolsofExtendedEducationwhicharesucha vitalpartofourstoresinSouthKorea;ourCommunityFairsinthe UKwhichhelpedlocalcharitiestorecruitafantastictotalofover 10,000newvolunteerslastsummer;ortheworkofourCommunity ChampionsinseveralcountriesdedicatedmembersoftheTesco teamwhoeverydaymakeapositivedifferenceforlocalschools, charitiesandvoluntarygroups. Afterthefailuretosecureaglobalagreementonclimatechange atCopenhagenattheendof2009,wesawmorepositivesignsin CancunlastDecember.Isharetherealhopethatfurtheradvances canbemadeinDurbanlaterthisyear.Whilstthepaceofpolitical progressmayappearslow,onereallypositivedevelopmenthas emerged.Aswehavecometorealisethatthepoliticianscannot bythemselvesshouldertheburdenoftacklingclimatechange,we havebeguntounderstandtheextraordinarypotentialcontribution thatbusinesscanmake. Again,Ibelievethatretailandthebroaderconsumergoods industryhasahugelyexcitingopportunity.Undertheoutstanding leadershipofmypredecessor,SirTerryLeahy,Tescosetitself firmlyonthepathtobealow-carbonbusinessby2020anda zero-carbonbusinessby2050.Weareontrackwithourtargets, openinglow-carbonandzero-carbonstoresaroundtheworld, andarereportingforthesecondsuccessiveyearabsolute emissionsreductionsintheUK,ourlargestmarket.

TescoPLCCorporate Responsibility Report 2011

Overview Responsibletrading Environment

Formethough,theprizeisevenbiggerthanthis.Emissionsin oursupplychainingrowing,manufacturing,processingand transportingthegoodswesellareatleasttentimesthose ofourownbusiness.Recognisingthis,wehavesetourselves agoaltoreducecarbonemissionsfromtheproductswesellby 30%by2020.ItisherethatIseetheextraordinarypotentialof theconsumergoodsindustry.Oursupplychainsoperateacross nationalboundaries,encompasseverycontinent,andinvolve thousandsofdifferentproductsandprocesses.Byengagingour thousandsofsuppliersacrosstheglobe,bysharingknowledge, andbycollaboratingwithotherglobalbusinessesandNGOs, Tescoandourindustrycanhaveatransformativeeffect. Wehavemadeastart.Throughourjointleadershipoftheglobal ConsumerGoodsForumprogrammeonsustainability,Tescoand manyotherbusinessesarecommittedtothehugelysignificant goalofhelpingtoendglobaldeforestationby2020. Thisworkbringshomeclearlythatthechallengeswefaceon sustainabilityareinterconnected.Climatechangecannotbe tackledwithoutasolutiontorainforestdestruction.Thesurvival ofourrainforestswillnotbeachievedunlesswefindaway toincreaseglobalfoodproductionsustainably.Thisinturn dependsonconcertedadvancesintacklingwaterdepletion andinreducingwaste. Sothereismuchmoretobeachievedonsustainabilityin thecomingyears.Tescohasahugecontributiontomake, andIwantthattobeamajorfocusofmyleadership. Incorporateresponsibilityasinotherareas,partnershipiskey. Iseetwoareasoffocushere.

First,asaretailer,thecustomermustbeattheheartofour strategy.Anybusinesscanmakeprogressthroughitsownactions andthroughitscommercialrelationships.Atrustedbrandlike Tescocaninform,enlistandempowermanymillionsofcustomers aroundtheworld.Ourworkinincentivisinggreenchoicesisastart, andthereissomuchmorewecando.Iamconfidentthatthe SustainableConsumptionInstitutewhichTescoendowedatthe UniversityofManchestercanguideusandothersinthiswork. Secondly,ourworkoncorporateresponsibilitycannotsucceed withoutthecollaboration,supportandcandidguidanceofthe manyNGOsandothermembersofcivilsocietywhoshareour passionforcommunityandsustainability.Iwantpartnershipin thisareaalsotobeamarkofmyleadership. IhopeyouenjoyreadingthislatestCorporateResponsibility Report.Itisveryimportantwork.Iwelcomeyourfeedback andyourengagement.       Philip Clarke

Health Community People Governance

TescoPLCCorporate Responsibility Report 2011

Overview

Tesco around the world


Headquartered in the UK, we employ 492,714 staff in 14 markets, and operate 5,380 stores worldwide.

UK
Revenue*

40,766m
Number of stores

2,715
Employees

293,676
Selling space (sq ft, % of Group)

36.7m sq ft 35.4%

US
Revenue*

495m
Number of stores

164
Employees

4,134
Selling space (sq ft, % of Group)

Tesco Bank
Revenue*

1.7m sq ft 1.6%

919m
Employees

1,274

Employee figures represent the average number of employees during the year * Revenues are sales excluding VAT and exclude the impact of IFRIC 13 (customer loyalty schemes) GDP growth: Economist Intelligence Unit

Tesco PLC Corporate Responsibility Report 2011

Overview

Europe
Revenue*

9,192m
Number of stores Responsible trading

1,082
Employees

Asia
Revenue*

89,559
Selling space (sq ft, % of Group)

10,278m
Environment Number of stores

30.2m sq ft 29.2%

1,419
Employees

104,071
Health Selling space (sq ft, % of Group)

35.0m sq ft 33.8%

Community People

India
In India, we have an exclusive franchise agreement with Trent, the retail arm of the Tata Group. We are supporting the development of their Star Bazaar format.

Governance

Tesco PLC Corporate Responsibility Report 2011

Overview

Our approach

Corporate responsibility helps to shape all we do at Tesco. At the heart of our overall business strategy is our core purpose: to create value for customers to earn their lifetime loyalty. Everything we do is rooted in two key values: no-one tries harder for customers Treat people how we like to be treated

OUR STEERinG WHEEl


Ourcorepurposeandvaluesarethefoundationofthe managementtoolwhichdrivesourday-to-dayapproachand prioritisesthekeyissuesforthebusiness.ThisiscalledourSteering Wheel,andconsistsoffivesegments:Community,Operations, People,FinanceandCustomer. Communityisourtermforwhatotherscallcorporate responsibilityorsustainability.Forus,thismeansacting responsiblyinthecommunitiesinwhichweoperate,and fulfillingourcommitments,orCommunityPromises.Our approachtohelpingcommunitiestoucheseverypartofour business,andsosomeprioritiesandactivitiesarefoundinother partsoftheSteeringWheel.Thisisoneofthekeywaysinwhich wecommunicate,manageandmonitorcorporateresponsibility activityacrosstheGroup.

TESCO COmmUniTy PROmiSES


OurValuesarereflectedinthefivepillarsofourcorporate responsibilitystrategy,whichwecallCommunityPromises. 1.Buyingandsellingourproductsresponsibly 2.Caringfortheenvironment 3.Activelysupportinglocalcommunities 4.Providingcustomerswithhealthychoices 5.Creatinggoodjobsandcareers Tescomanagersaremeasuredaccordingtotheirperformance againsttargetsintheSteeringWheel,includingtheCommunity segment.EachstorealsohasitsownSteeringWheel,which reflectsthetargetsthataremostrelevanttothem. ThismeansastoremanagerinShanghaiwillhavesomesimilar responsibilitiesonCommunitytooneinEdinburgh.Hisorherstore willhavetoreportoncarbonreductionandwastetargetsaswell ascommunityinitiatives.Similarly,managersineverymarketwill becontributingtoourcharitablegivingtargets,andhelpingtoget peopleactive. Corporateresponsibilityplaysanimportantpartinourcommercial decisions.ThankstotheSteeringWheel,lookingaftercommunities isnotaspecialistfunctionatTescoitispartofeveryonesjob. IneachofourmarketswebuildannualCommunityPlanswhich focusandtargetlocalandnationalactivities.Theseplansreflect bothGrouptargetsandlocalandnationalpriorities,ensuringlocal ownershipofspecificissues.

TescoPLCCorporate Responsibility Report 2011

Overview

SUPPOR ACTIVELY TING LO COMMUN CAL ITIES BU YIN GA PR OD ND UC TS SELL RES ING O PO NS UR IBL Y CA RI EN NG VI F OR RO NM TH EN E T

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Responsibletrading

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D TE EA TR PECT S BE TO H RE T WI

PEOPLE
Health

Buying and selling our products responsibly, p10 Caring for the environment, p20
Community

Providing customers with healthy choices, p32

PE

W VI E K T N JO AL O OW BS U AR R E

R AT

IS XIM MA FIT PRO

TR

WE MA JOB KE OU S EA R SIE TO R DO

IONS

GROW SALES

FINAN

TRE

D
E

P AT

Environment

Creating good jobs and careers, p48


7  TescoPLCCorporate Responsibility Report 2011

CE

Actively supporting local communities, p40

VE SA EY S N AY MO W D AL AN E W IME T

People Governance

Overview

Creating a sustainable growth business


Corporate responsibility at Tesco is about creating a sustainable core for a successful growth business. As highlighted by Forum for the Future in our 2010 Corporate Responsibility Report, there are opportunities for Tesco to take the lead in developing new retail business models and realise our ambition to use our size as a force for good.

Buying and selling our products responsibly


Buyingandsellingourproductsresponsiblyhelpsusbuildtrustamongallour stakeholders.TrustintheTescobrandenablesustogrowourexistingbusiness, aswellasdiversifyintonewbusinessareassuchaspersonalfinanceandtelecoms. Strongrelationshipswithoursuppliersallowustoinnovatetomeetchanging customerneedsandtoattractnewsupplierstoworkwithus.Assupplychains increasinglycomeunderstrainfromenvironmentalchangeandpopulationgrowth, weareworkingtomakethemmoresustainable.

150m
Caring for the environment

ar saved per ye ts s in energy co

Atthemostbasiclevel,reducingourenvironmental impactsavesusmoney,aswellasensuringthatweremain sustainableandcompetitive.Between2000and2008,wehalvedourenergyusepersquarefoot. Ifwehadnotmadethesesavingsandthosewehavemadesince2008ourenergyusewould bemorethandoubleitscurrentlevel.Attodaysenergyprices,wearesavingover150million peryearinenergycosts. OurfocusontheenvironmenthastakenusintonewbusinessareassuchasourHomeEfficiency Service,offeringinsulationandsolarenergyproductstoUKhomeowners.Havingareputation asagreenpioneerhelpsourexpansioninnewgrowthmarketssuchasChinaandSouthKorea, whereweareabletoshareourexperience.

TescoPLCCorporate Responsibility Report 2011

Overview

Strong relationships with our suppliers allow us to innovate to meet changing customer needs and to attract new suppliers to work with us.

Responsibletrading

Providing customers with healthy choices


Insomemarkets,customersexpectbasicfoodsafetyasagiven;inothers,itremainsfront ofmind.Ifwehaveareputationforsellingsafefoodinamarketwherefoodsafetyisanissue, ithelpsusbuildtrust,givingusasignificantcompetitiveadvantageandtheopportunitytowork withgovernmentstoimprovestandards. Helpingcustomerseatmorehealthilyallowsustoopenupnewbusinessopportunities,especially inmarketswhereobesityisamajorissue.Ourgetactiveprogrammesaroundtheworldhelpour customersgetfit,aswellasincreasingtheirloyalty.

Environment Health

Actively supporting local communities


Businessesthatareintunewiththeneedsoftheircommunities,sensitivetotheirconcerns andthathelpthemmeettheirgoals,arerewardedwithmorecustomersandgreaterloyalty. Understandinglocalcommunitiesallowsustoserveourcustomersnomatterwhattheir backgroundandprovidethemwithnewservicesandproducts.
Community

Creating good jobs and careers


Oursuccessdependsonour492,714staffworldwidedoingagreatjobforcustomers.Thismeans attractingtherightpeopleandhelpingthemtodevelop.Aswegrow,wecreatenewjobs,andhelp stafffulfiltheirpotentialsothattheycandeliverforcustomersandcommunities. Ifwefailtoattractandretaingoodpeople,wefinditharder toserveourcustomerswell.Asaresult,theymaychoose togoelsewhere.Providinggoodjobsandcareersand helpingstafftofeelgoodaboutthecompanythey workformeanstheywillthriveandstaylongerwith us,anddothebestjobforcustomers.
People

492,714
staff doing a gr job worldwid eat e
TescoPLCCorporate Responsibility Report 2011

Governance

Buying and selling our products responsibly

TescoPLCCorporate Responsibility Report 2011

10

Overview

Responsibletrading

Environment

Health

Community

People

Governance

11

TescoPLCCorporate Responsibility Report 2011

Buying and selling our products responsibly

Responsible trading
2010/11 in numbers
Throughout the world, our customers want safe, affordable products. many also want to know that what they buy is sourced to robust ethical and environmental standards. We believe it is possible to provide for all our customers, whatever their needs, whilst upholding strong standards across our business and in our supply chains.
Buyingandsellingourproductsresponsiblymeansensuring everyoneinoursupplychainistreatedhonestlyandfairly, andthatcareistakentominimisetheimpactourproducts haveontheenvironment.Thatincludeshowwe:  treatoursuppliersandhowoursuppliersemployeesaretreated;  workwithcommunitieswherewesourceourproducts;  establishandmonitoranimalwelfare;and  worktoensureproductscomefromsustainablesources whereverpossible. Weworkinpartnershipwithoursupplierstoensureourproducts aresourcedresponsibly.Ourtechnicalteamsacrosstheworld, workingalongsideourcommercialteams,ensurethatour standardsaremetineveryareaofourbusiness,andwehave ethicaltrademanagersinkeysourcingcountries.Formore informationseewww.tescoplc.com/tradingfairly. Insomemarkets,productscertifiedasbeingresponsiblysourced areincreasinglyimportanttoourcustomers.Inothers,itisanew concept.Trueleadershipmeansmakingresponsiblysourced productsmuchmorewidelyavailable,sothatmakingamore responsiblechoiceisanaffordable,everydaydecision. Wehavecommittedtoreducingthecarbonemissionsof theproductsinoursupplychainby30%by2020.Formore informationseepage27.

1,600
Independentethicalaudits carriedoutonsupplier sites

1 billion
Locallysourcedproducts soldintheUK

100%
NewUKtargettocatch own-brandcannedtuna bypoleandlineby2012

20%
PalmoilinTescoUKownbrandproductsfroman RSPOcertifiedsystem

TescoPLCCorporate Responsibility Report 2011

12

Overview

sibly Buying and selling our products respon means ensuring everyone in our supply chain is treated honestly and fairly, and that care is taken to minimise the impact our products have on the environment.
SUPPliERS
labour conditions in our supply chain Millionsofpeoplewhoworkinoursupplychainrelyonusfortheir livelihoods,andourtrademakesanimportantcontributionto thecommunitiesofmanymore.Inturn,werelyonoursuppliers toprovideuswithproductsourcustomerswant.Ensuringgood labourstandardsthroughoutoursupplychainisnotonlytheright thingtodo,butalsomakesgoodbusinesssense. WewereafoundermemberoftheEthicalTradingInitiative(ETI) andweexpectallsupplierstomeetthestandardssetoutunder theETIBaseCodeandensuretheirworkerstherightswithinit. Formoreinformationseewww.ethicaltrade.org. Whilesuppliersoperatingindevelopedmarketsmostlycomply withtheprovisionsoftheBaseCode,complianceinothermarkets remainsmorechallenging.Wesupportoursuppliers,whereverthey arebased,tomeetthestandardswerequire.In2009,welaunched TradingFairly,anewapproachtoethicaltrading,basedonfour keyprinciples:  valuesensuringweworkwithsupplierswhoshareourvalues;  monitoringgettingtothetruthaboutconditionsforworkers inoursupplychains;  improvementsupportingoursupplierstoimprove;and  transparencybeingopenandhonest,workingwithothers. Thisyear,weextendedourTradingFairlyprogrammetoour owncorporatepurchasing.Thiscoversthegoodswebuyfor ourownuse,andservicescontractedwiththirdparties: everythingfromcarrierbagstocarwashes. Relationships with suppliers TomakeTradingFairlyareality,weinvestsubstantiallyin supportingsupplierstodeliverit.Ourethicaltrademanagers inBangladesh,ChinaandSouthAfricahelpsuppliersand stakeholdersaddresslocalandnationalchallenges. Atthesametime,wefundprojectstoaddressspecificlocalneeds.  WearesettingupaSkillsAcademyinBangladeshtoprovide trainingforoursuppliers,helpingthemimproveefficiency,making themmorecost-effectiveandimprovingconditionsforworkers.  OurLeadershipAcademyinSouthKorea,scheduledtoopenin July2011,willalsoprovidetrainingforsuppliers.Initiativeslikethis canmeanthatgovernmentslookmorefavourablyonoursuppliers asexamplesofbestpractice,andrecognisethevalueofourtrade asaforceforgoodinlocaleconomies.

Responsibletrading Environment Health Community

Trading Fairly model


Values
Suppliers who share our values  ommunicateourvalues C Setstrongstandards Qualifynewsuppliers

People

Transparency
Be open and honest Workwithothers Buildawareness Betransparent

Monitoring
Get to the truth Assessrisk Audit,reportaccurately Understandworkers Identifytrends

Improvement
Support and improve
Governance

Correctbreaches  uildlong,strong B  relationships Developskills Assistimprovement Rewardsuccess

13

TescoPLCCorporate Responsibility Report 2011

Buying and selling our products responsibly


Weaimtobuildlong-termrelationshipswithsuppliers,sogetting regularfeedbackfromthemisahighpriority.Theresultsofour annualsurveyofsuppliers,SupplierViewpoint,formoneofour GroupKeyPerformanceIndicators(seepage58formoreon KPIs).Theanonymoussurveyismanagedbyanindependent third-partyprovider. Suppliersareaskedindetailabouttheirrelationshipwith Tesco,includingwhetherTescotreatsthemwithrespectand professionalism,andhowcommittedweare tomeetingtheircustomersrequirements.In2010/11:  theresponserateof54%wasthehighesttodate,although slightlybelowourtargetof60%;and  weexceededourtargetof80%positiveresponses,achieving anaverageof82%positiveresponsesfrom3,887suppliers worldwide. Robust supplier audits Ourauditingprocessworkstoidentifykeyissuesandfocus resources.Ifwediscoverthatworkershumanrightsarenot respected,weworkcloselywiththesuppliertoaddresstheissue immediately.Ifthesuppliershowsalackofcommitment,we movetoterminatetherelationship.Ourindustry-leadingAuditor RecognitionProgrammeensuresthatweonlyacceptaudits conductedbyvetted,independentauditors. Rewarding suppliers TomanageoursupplychaininUKclothing,wenowclassify suppliersinthreecategoriesGold,SilverandBronzethrough ourpreferredsupplierscheme.Weaimtodevelopathree-year businessplanwithourGoldsuppliers,allowingthemtoplanfor theirlabourneedsandwagesoverthelong-term,andbenefit fromhighervolumesoftrade.InordertoqualifyforGoldstatus, suppliersmustdemonstratequality,reliabilityandgoodethical performance.Thisschemehasbeensuccessfulinmotivating supplierstofocusonethicalstandards,andisscheduledfor roll-outtootherproductsin2012/13. OurTradingFairlyAwardsrewardthosesupplierswhoaremaking particularlystrongeffortstoimproveconditionsforworkers. Formoreinformationseewww.tescoplc.com/tradingfairly. Growing exports Westrengthenoursupplychainssustainabilitybyhelping exportsgrow.  InIndiawehavebeenworkingwiththeJointEconomicTrade Committee(Jetco)tohelpIndianexportersaccessinternational markets,andheldaTescoMeettheBuyereventinMumbai in2010.  IntheUK,weholdanannualshowcaseforThaigoodsintheUK. Thisyear,athree-weekeventwasheldinmorethan430stores, promotingfreshThaifruit.

During2010,over1,600suppliersitesweresubjecttoindependent  Thisyear,weheldaTurkishWeekeventin110storesinCentral ethicalauditsandTescostaffmadeanadditional4,300visits. Europe,inwhichwesoldaspecialrangeofproductsfromTurkey. Formoreinformationseewww.tescoplc.com/tradingfairly. Duringtheweek,wesold1.2millionworthofproducts.

We aim to build long-term relationships with suppliers, so getting regular feedback from them is a high priority.

TescoPLCCorporate Responsibility Report 2011

14

Overview

CENTRALEUROPEANSUPPLIERPROGRAMME

RESPOnSiBlE SOURCinG
Wearecommittedtotheresponsiblesourcingofrawmaterialsfor ourown-brandproductswhereverpossible,andtomanagingthe impactwehaveonbiodiversity.Wehavemademostprogressin theUK,andareworkingtoimprovestandardsinallourmarkets. TogetherwithUnilever,Tescoco-chairstheSustainabilitySteering GroupoftheConsumerGoodsForum,andisleadingtheproject announcedinDecember2010toachievezeronetdeforestationby 2020.Thisworkinvolvesdevelopingandcommittingtosustainable supplychainsforeachofthecommoditiesbelow. Palm oil Palmoilanditsderivativesappearinsmallquantitiesinmany ofourproducts,andweareworkingtoensurethattheycome fromsustainablesources.WearefullmembersoftheRoundtable onSustainablePalmOil(RSPO)andofthecoalitionofover 50UK-basedcompaniescallingontheindustrytostopall deforestationofrainforestandpeatforestsforpalmoilexpansion. In2010,wesetatargetofusing100%certifiedsustainablepalm oilinallourUKown-brandproductsby2015,andsourcingallour oilfromanRSPO-certifiedsystemsuchasGreenPalmby2012. Thisisachallengingtarget,asthetraceabilityandcertification ofpalmoilanditsderivativesisstillinitsinfancy.  Wehaveissuedallofourown-brandsupplierswithatimeline andcodeofpractice,settingoutourdetailedexpectations.  From2012,wewillonlyacceptUKproductsusingpalmoil thatisfullytraceablesothatby2015allthepalmoilinour UKown-brandproductswillcomefromcertifiedsustainable sources. Thisyear,wehavecontinuedtomakeprogressagainstourtarget. Around20%oftheTescoown-brandproductsthatcontain palmoiloritsderivativesnowcomplywithourcodeofpractice, representingprogresstowardsour2012and2015targets.
Community Health Responsibletrading

Feedbackfromsuppliershashighlightedthatsomesmall suppliersinourCentralEuropeanmarketsworryaboutthe potentialimpactthatTescocouldhaveonthem.Asaresult, inthecomingyearwewillfocusonextendedprogrammes foroursuppliersintheCzechRepublic,Hungary,Poland, SlovakiaandTurkey.Wewillholdregionalmeet-the-buyer roadshowstoincreasethenumberofproductswesellfrom small,regionalproducers. UK Bribery Act TheUKBriberyActbecomeslawin2011,creatinganewcriminal offenceforUKcompanieswhichfailtopreventbriberybeing committedbyemployeesandassociatedpersonsactingforor onthecompanysbehalf.Acompanysonlydefenceisthatithad adequateproceduresinplacetopreventsuchcontraventions occurring. Wealreadyhavewell-establishedpoliciesandprocessesrelating tobriberyandgifts,andourCodeofBusinessConductprovides veryclearguidanceforstaffaroundtheworldonthehigh standardsofbehaviourweexpect.Thesewillbeupdatedbefore theActcomesintoeffectandwillbesupportedwithtrainingand communicationacrosstheGroup.

Environment People

9,700
InPoland,wesellmorethan9,700regional products.

Governance

15

TescoPLCCorporate Responsibility Report 2011

Buying and selling our products responsibly


Timber Wearecommittedtopurchasingtimberandtimberproductsfor theUKmarketonlyfromlegal,sustainablesources.  ThefourmilliontillrollsweuseperyearintheUKarecertifiedby theForestStewardshipCouncil(FSC).  TheTescoMediaPublishingCentre,whichprintstheTesco Directcatalogue,flyersandleafletsisfullycertifiedbyFSCandthe ProgrammefortheEndorsementofForestCertification(PEFC).  In2010,wetookthedifficultdecisiontodelistAsiaPulp&Paper asasuppliertoourUKandChinesebusinesses,aswecouldnot satisfyourselvesofthesustainabilityoftheirsourcing. Soy IntheUK,ourown-brandsoyproductscomeonlyfrom sustainable,non-GMsources.WearesignatoriesoftheBrazilian moratoriumonthesourcingofsoyfromtheAmazon,whichhas beensuccessfulinreducingdeforestationfromsoyproduction. Ourinternalsystemstrackallsoy-relatedingredientstoensure theycomefromanon-GMsourceoutsideoftheAmazonbiome. Wealsotrackthesoyusedasanimalfeedbyourmeatsuppliers throughFEMASanindependentassuranceschemeforfeed andcantracethisbacktoasourceoutsidetheAmazonbiome. Thissystemalsoguaranteesnon-GMpoultryfeedforbothmeat andeggs. local sourcing Buyinglocalproductshelpstodevelopandsustainthecommunities inwhichweoperate,andisoftenwhatourcustomersdemand. Wehaveruninitiativesinseveralmarketstoboostourofferoflocal products.Forexample,thisyearwerantworegionalsupplierforum eventsinHungary,sourcingandsigningupnewlocalsuppliers. Manyofourmarketshavesoldlocalproductsforsometime becauseimportsaremoreexpensive.InPoland,wesellmorethan 9,700regionalproducts. Inothermarkets,thereisincreasingdemandfromcustomersfor locallyproducedandsourcedfoods.IntheUK,customerstellus thatbuyinglocalfoodsisimportanttothemformanyreasons, includingsupportforthelocaleconomy.Locallinesarethose producedandsoldwithinacountyorneighbouringcountyin England,orwithinthecountryinIreland,ScotlandandWales. WehavefivededicatedregionalbuyingofficesacrosstheUK. Thisyearweincreasedsalesoflocalproductsto1billion,from 850millionin2009. TescoisthefirstUKretailertolaunchawebsitededicatedtolocal foods,atwww.tesco.com/local. Fairtrade Fairtradeproductsaremostsuccessfulinourmoreestablished markets.IntheUK,wenowhavethelargestrangeofFairtrade cottonschooluniformitemsonthehighstreet,andeveryyear weparticipateinFairtradeFortnight,offeringpromotionson Fairtradeproduce,chocolate,teaandcoffee.Thisyearwe launchedFairtradeproductsinPoland.Formoreinformation seewww.tescoplc.com/fairtrade.
DIRECTSOURCINGINCHINA

InChina,weworkwiththeGovernmentonalargenumber ofagriculturalprojects.Wehave123directsourcingbases in40cities,andsell1,400itemsthataresourceddirectlyfrom farmers,helpingthemimprovetheirmargins.Forexample, inShandongweworkwithleadingagriculturalcompanies topurchase20,000tonnesofFujiapplesdirectlyeveryyear, benefitingmorethan50,000farmers. Seafood AstheUKsbiggestfishmonger,withmorethan480fishcounters, weshareglobalconcernsaboutthesustainablesourcingof seafood,andarecommittedtotakingfishonlyfromresponsibly managedsources.Wearedevelopingarobustsystemfor evaluatingfisheriesinassociationwiththeSustainableFisheries Partnership,guidedbyprinciplesandpracticalrecommendations fromleadingindustrybodiessuchastheMarineConservation SocietyandtheMarineStewardshipCouncil. Weshareconcernsaboutcertainmethodsoftunafishing.In2010, wehitourtargetofsourcing25%ofourown-brandcannedtuna bypoleandline,andthisyearwecommittedtosourcing100%in thiswaybytheendof2012,providedthatthiscanbeachievedin asustainableway.Meetingthischallengingtargetwillrequireusto workwithoursupplierstoeffectrealchangeintheindustry. Wealsorecogniseourresponsibilitytooffercustomersalternative speciesoffish.IntheUK,wherecustomerstendtopurchase onlyafewspeciescod,haddockandsalmonwearehelping tointroducecustomerstootherspeciessuchasdab,pouting (seebox)andcoley.Wenowhaveupto40speciesavailable throughourUKfishcounters. Ineachofourinternationalmarkets,seafoodpreferencesand sourcesofsupplyaredifferent.Wearethereforeworkingwithour supplierstodevelopaprogrammetoimprovethesustainability ofourofferinginourinternationalmarkets.Thisyear,wesigned WWFssharedstatementontheEUCommonFisheriesPolicy, callingforthe2012reformofthepolicytodeliversustainable fisheriesthroughoutEurope. Formoreinformationseewww.tescoplc.com/seafood.
HELPINGCUSTOMERSTOTRyNEWSPECIESOFFISH

Earlierthisyear,ourUKbusinessbegantosellpouting,a responsiblysourced,low-costwhitefish.Despitebeingthe mostcommonspeciesoffishinUKwaters,poutingwaslittle knownamongcustomers.SoonafteritslaunchatTesco,we weresellinghalfasmuchpoutingascod,theUKsmostpopular whitefish.Poutingisnotatargetspecies,sopromotingitto customershelpstotakepressureoffstocksofotherwhitefish suchascodandhaddock.

TescoPLCCorporate Responsibility Report 2011

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Overview Responsibletrading Environment Health Community People

ilable ecies ava UK sp our through ters fish coun

40

Governance

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TescoPLCCorporate Responsibility Report 2011

Buying and selling our products responsibly


Animal welfare Wehavehighstandardsforanimalwelfarenotonlybecause ourcustomersdemandthem,butbecauseitistherightthingto do.Aswithmanyofourresponsiblesourcingpolicies,customers andotherstakeholdersaroundtheworldhavedifferingviewson animalwelfare. Water Waterscarcityisanissueinmanyofthecountriesinwhichwe operateincludingChina,India,TurkeyandtheUSandaffects manyofoursuppliers.Inthenextyear,wewillconductdetailed surveysofwateruseinourUKstores,andtrialwater-saving initiatives,sowecansetawaterreductiontargetforourUKstores anddepots.

Wearetheonlymajorsupermarkettoinsistonthesamehigh standardsforallfreshmeatsoldintheUK,evenifitisimported. However,waterusedinourdirectoperationsrepresentsaround Forexample,wedonotallowtheuseofsowstallsinpigproduction 1%ofthetotalwaterfootprintoftheproductswesell.Weestimate anywhereintheworld. thatover850billionlitresofwaterareusedinoursupplychain eachyear,andanadditional1,000billionlitresareusedwhen Wearealsotheonlymajorsupermarkettocarryoutindependent customersuseourproducts.In2011/12,wewillworkwithtwo welfareauditsabovetheminimumindustrystandards.Allfresh priorityproductgroupsfreshproduceandclothingtodevelop meatandpoultrysupplierstoourUKbusinessareinspectedat waterstewardshipstrategieswithsuppliersinwater-scarceregions. leastevery15monthsbyIntegraFoodSecure,anindependent, Wewillalsosharebestpracticeonwatermanagementwithour accreditedauditcompany. suppliersthroughourKnowledgeHub(seepage27). Thisyearwecommittedtoworkingwithoursupplierstoensure allabattoirsthatsupplyourUKmarketwillhaveCCTV,monitoring compliancewithourhighanimalwelfarestandards. Formoreinformationseewww.tescofarming.com. Animal testing Wedonotsupporttestingonanimalsforcosmeticorhousehold products,anddonotcarryoutorcommissionsuchtestson ourown-brandproductsortheingredientstheycontain.We supporttheFundfortheReplacementofAnimalsinMedical Experimentation(FRAME),whichseekstoendanimaltesting. TescoNaturallyandNaturalrangesdonotuseanyingredient thathasbeentestedorretestedonanimalsforcosmeticpurposes since31December1990.AllotherTescoproductsoperateafixed cut-offdate,foringredients,of31December2007.

100%

In2010,wereachedourtargetofcatching 25%ofourown-brandcannedtunaby poleandline,andthisyearwecommitted tosourcing100%inthiswaybytheend of2012.

All fresh meat and poultry suppliers to our UK business are inspected at least every 15 months by an independent, accredited audit company.

TESCOBANK

AtTescoBank,wehaveadutytoourcustomerstosell ourproductsresponsibly.Weassessallcreditapplications againstourcreditscoringandaffordabilitycriteria. Whencustomersfindthemselvesinfinancialdifficulty,wewill workwiththemtounderstandtheircircumstancesandagree suitablepaymentplanstohelpthemrepaytheirdebts. Formoreinformationseewww.tescoplc.com/countries.

TescoPLCCorporate Responsibility Report 2011

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Overview

PROGRESS On SElECTEd 2010/11 PRiORiTiES


Czech Republic/ Slovakia malaysia
Createopportunitiesforlocalsuppliersthroughsupplier engagementevents IncreasesalesofproductsfromsmallbusinessesbyRM630million (129million) Runtrainingfor50regionalsuppliers 25%ofourcannedtunatobecaughtbypoleandlineby2010 Achieved as a result of these events, we now sell local breads in our Czech stores Achieved we increased sales of products from small businesses by Rm670 million (137 million) Achieved we ran training for 130 regional suppliers Achieved our target is now 100% by 2012

Responsibletrading

Poland UK

Environment Health Community People Governance

19

TescoPLCCorporate Responsibility Report 2011

Caring for theenvironment ero Z


be a zero to We aim n business carbo 2050 by

TescoPLCCorporate Responsibility Report 2011

20

Overview

Responsibletrading

Environment

Health

Community

People

Governance

21

TescoPLCCorporate Responsibility Report 2011

Caring for the environment

A growing, green business


2010/11 in numbers
As one of the worlds leading retailers, we have a clear responsibility and a significant opportunity to protect our environment.
Ouraimistocreatemoresustainablewaysofdoingbusiness.We arereducingourimpactontheenvironment,includingenergyuse andwaste.Weareworkingwithoursupplierstomanageresources morecarefullyinoursupplychains:forexample,reducingwater usageortacklingdeforestation.Weareempoweringourcustomers who,together,canhaveapositiveimpactontheenvironmentthat faroutweighsourown,tocreateamassmovementingreen consumption.

OurfirstoverseaszerocarbonstoreinJarome, r CzechRepublic

Zero

1,100

Carbonfootprints calculatedforeveryday TescoproductsintheUK

1 billion

GreenClubcardpoints awardedtoUKcustomers eachyear

ChildreninTurkey educatedontheimpact ofclimatechange

24,000

ClimATE CHAnGE
Climatechangeisoneofthegreatestthreatsmankindfaces. Ittranscendsnationalboundaries,andthreatenstoaffectusall inmanydifferentways:fromriskstosupplychains,tothedirect impactthatchangesintheclimatewillhaveonourcustomers livesandtheoperationofourstores. Retailbusinessescanplayapowerfulroleintacklingclimate change.Wearedeterminednotonlytoplayourpart,buttoplay aleadingrole. ForTesco,leadershiponclimatechangemeans:  settingaclearexamplethroughourchallenginglong-term targets,andmakinggenuineprogressagainstthem;  workingwithotherbusinessestotransformtheconsumergoods industrybytacklingcarbonhotspotsintheglobalsupplychain;  usingourpositionasatrustedglobalbrandtoinspireour staff,customersandneighbourstotakeactiontoprotectthe environment.With492,714employeesandmillionsofcustomers worldwide,wecanhaveapositiveinfluenceonmillionsofpeople everysingleday;and  workingwithgovernmentsacrosstheworldtobuildan understandingofclimatechangeandtheactionsneededtotackle it.Forexample,wehaveadvisedtheUKGovernmentonreducing carbonemissionsacrosstheGovernmentestate,andweorganised aconferenceinShanghaiinsummer2010,bringingtogetherthe ChineseGovernment,academics,NGOsandtheprivatesector todiscusshowtomeetthechallengeofclimatechange.

TescoPLCCorporate Responsibility Report 2011

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Overview Responsibletrading

our commitments
Environment

Wehavesetambitioustargetstoreduceourownfootprint,reducetheemissionsfromoursupplychain, andhelpourcustomerstoreducetheirfootprintstoo. Tobecomea zero-carbon businessby 2050 By2012, wewillhalve distribution emissionsof eachcaseof goodsdelivered, againsta baselineof2006 By2020,wewill halveemissions fromour 2006/7baseline portfolioof buildings Newstoresbuilt between2007 and2020to emithalfthe CO2eofa2006 newstore Toreducethe emissionsofthe productsinour supplychainby 30%by2020 Tofindways tohelpour customers reducetheir owncarbon footprintsby 50%by2020

Health Community

How we calculate our carbon footprint

Ourglobaldirectcarbonfootprintismeasuredincarbondioxide equivalent,orCO2e.Differentgreenhousegaseshavedifferent effectsontheclimate,andCO2eisawayofstandardisingthe globalwarmingeffectoftheseemissions. Eachyear,weupdateourcarbonfootprintcalculationstoreflect thelatestUKGovernmentguidance,allowingustoassessour performanceaccuratelyovertime.Lastyear,wereportedour 2009/10globaldirectcarbonfootprintas5.17milliontonnesof CO2e.Wehaverecalculatedthisfigurewiththelatestemissions

factors,andhavealsoincorporatedarevisionduetoanerror withsomeemissionsfactorswithinourcarbonreportingtool. Therevised2009/10globaldirectcarbonfootprintis5.35million tonnesofCO2e. Formoreinformationabouthowwecalculateourcarbon footprint,includingreportingstandards,ourdefinitionof directemissions,andthecurrentemissionsfactors,see www.tescoplc.com/reporting.

People Governance

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TescoPLCCorporate Responsibility Report 2011

Caring for the environment


Our performance Tescoisaglobalbusinessgrowingatasignificantrate.Business growthiscompatiblewithtacklingclimatechangeprovidedit islow-carbongrowth.Significantglobalcarbonreductionsarean urgentnecessity,andthefastestwaytoachievethemwillbeby replacinghigh-carbonactivitieswithlower-carbonones. Wearemakingprogressinbecomingalow-carbonenterprise. ThisyearTescowasnamedthetopretailerintheCarbonDisclosure Projects2010UKFTSE350andGlobal500reportsforourcarbon reportingandperformance. Ourglobaldirectcarbonfootprintin2010/11was5.44million tonnesofCO2e(seeboxonpage23fordetailsofhowwecalculate ourcarbonfootprint).Thisyear,wecontinuedtodecoupleour businessgrowthfromthegrowthinourcarbonemissions:while ournetsalesareagrewby8.8%,ourcarbonfootprintincreasedby only2%. Wehavemadeparticularprogressthisyearinreducingemissions fromrefrigeration.IntheUKalone,wehavesavedaround165,000 tonnesofCO2ebyreducingleakageoffridgegas,whichhasa globalwarmingeffectthousandsoftimesgreaterthanCO2.
TOTALCARBONFOOTPRINTBySOURCE2010/11
5 4 3 2 1 1 2 3 4 Grid electricity 63.92% Refrigerants 15.89% diesel/oil 12.05% natural gas/lPG (including district heating) 7% 5 Business travel 1.14%

total carbon footprint by market 2010/11 Country kgCO2e

China CzechRepublic Hungary India Ireland Japan Malaysia Poland Slovakia SouthKorea Thailand Turkey UnitedKingdom UnitedStates

357,835,896 206,063,393 227,607,623 16,769,044 224,158,169 30,079,003 166,494,221 410,182,360 77,781,743 492,770,531 533,940,207 109,890,505 2,486,454,492 100,339,734

Getting to zero Achievingourambitionofbecomingazero-carbonbusiness by2050willrequireustoreduceourabsolutecarbonemissions acrosstheGroup.Weaimtoachievethisnotbypurchasingcarbon offsetsbutbygeneratingourelectricityandheat/coolingfrom renewablesources.Ifthereareanyresidualemissionsthatwe cannoteliminate,wewillgeneratemorerenewableenergythan weneedandpasstheexcesstoothers.


ASSURANCESUMMARySTATEMENT

In2009/10,ourUKbusinessrecordedanabsolutereductionin CO2eemissionsof1%(revisedfromthe2%statedinour2010 reportseeboxonpage23fordetails),despitesignificantbusiness growth.Thisyear,thankstoarelentlessfocusonrefrigerant emissionsaswellasfurtherprogressonenergyefficiency,wehave reducedourabsoluteCO2eemissionsintheUKby5%.

EnvironmentalResourcesManagementLimited(ERM)has providedindependentexternalassuranceofour2010/11global directcarbonfootprintforthisreport.Hereistheirresponse: WereviewedTescosapproachtomeasuringandreportingits directcarbonemissionsatGrouplevelandinarepresentative sampleofmarkets(China,Ireland,theUKandtheUS). WeconcludethatTescosglobaldirectcarbonfootprint(total directcarbondioxideequivalentemissionsandpercentage breakdownperemissionstype)isappropriatelystated.For furtherdetailsontheworkweundertookandourfindings, pleasereadourfullassurancestatementat www.tescoplc.com/reporting.

Pleasenotethatthe2008Tescoaccountingyearwas53weekslongratherthantheusual 52weeks.AsinCRreportsfor2008/9and2009/10,the2008figureshavebeenadjusted toa52-weekyeartoallowlike-for-likecomparisonwithotheryears.

TescoPLCCorporate Responsibility Report 2011

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Overview Responsibletrading

oling gandcoes66% tin Ourhea amseyus al tR systemaergythanatypic lessen fasimilarsize. storeo

66%

Environment Health Community People Governance

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TescoPLCCorporate Responsibility Report 2011

Caring for the environment

6m fewer miles
Thisyear,ourUKrailnetworksavedsixmillionroadmiles andover8,000tonnesofCO2e.

BUildinGS
low-carbon stores Since2005,wehavebeencuttingthecarbonfootprintofTesco storesacrosstheworld.Wehaveanambitiousprogramme ofcarbonreductioninournewandexistingstores,designing infeaturessuchasincreasednaturaldaylighttoourstandard newstores.Inourexistingestate,weareworkingtoreplaceold equipmentwithnewtechnologytohelpourstaffcutcarbon (seebox). Zero-carbon stores Weopenedtheworldsfirstzero-carbonsupermarketinRamsey, Cambridgeshire,in2009.Thisyear,weopenedourfirstoverseas zero-carbonstoreinJarome,CzechRepublic,andcompleted r twomorezero-carbonstoresintheUK,inWelshpoolandBourne. Thesestoresallowustotestnewtechnologiesthatwecanroll outtofuturenewstores. Ourzero-carbonstoresaredesignedtouseaslittleenergyas possible.Forexample,ourheatingandcoolingsystematRamsey uses66%lessenergythanatypicalstoreofasimilarsize.  WegenerateourownenergyonsitefromaCombinedHeatand Power(CHP)system,whichusesasustainablebiofuelmadefrom wastefishoiltogenerateheatandpower.

ENERGyBOARDS

Weareinstallinginteractiveenergyboardsinourstoresinthe UKandIreland.Theboardshaveaninteractivetouchscreen toshowwherethestoreisusingenergyinrealtime,allowing stafftotakeaction.Theyareprojectedtosave15,000tonnes ofCO2e,equatingtoacostsavingof2million,everyyear. TheenergyboardswonBestEnergyReductionProjectof theyearattheEnergyEvent2010,andhelpedTescotowin thePlattsGlobalEnergyAwardforBestEnergyReduction Programme. natural refrigeration Therefrigerantgasesusedinalmostallrefrigerationsystems knownashydroflurocarbons(HFCs)canmakeavery significantcontributiontoclimatechange.Theycomprise 16%ofTescosglobalcarbonfootprintandwearecommittedto findingalternatives.Wehavealreadyinstallednon-HFCnatural refrigerationsystemsinHungaryandtheUK,andinourexisting storesintheUKwehavereducedHFCemissionsby15%compared to2009/10.WewillpilotanaturalrefrigerationsysteminTurkey in2011/12.

InNovember2010,alongwithothermembersoftheConsumer GoodsForum,wepledgedtobeginphasingoutHFCrefrigerants  Excesselectricitythatwegenerateisexportedtothe from2015,wherethisispermittedbylocalandnational NationalGrid. regulations,andworksintheclimateandwiththestoreformat.  Ramseyissavingtheequivalentof2,000tonnesofCO2eperyear, Weareactivelylookingatnon-HFCsystemsthatcouldalsoworkin comparedtoasimilarnewstore. tropicalclimateslikeMalaysiaandThailand,andinsmallerformat Wewillshortlyopenourfirstzero-carbonbuildingsinAsia.Ourfirst andexistingstores. zero-carbonstoreinthecontinentwillopeninthesecondhalfof Renewable energy 2011inBangPhra,Thailand,andTescosLeadershipAcademyin Eventhemostenergy-efficientbuildingsanddistributionsystems SouthKorea,tobecompletedinJuly2011,willalsobezerocarbon. needtousesomeenergy.Generatingourownrenewableenergy isthereforeakeypartofourclimatechangestrategy,andweare triallingseveraltechnologies,includingphotovoltaicroofpanels CARBONFOOTPRINTPERSQUAREFOOT andcladding,solarhotwatergeneration,CHPandgroundsource kgCO2e/retailsellingspace heatpumps.
65.10 64.84 59.64 56.91 53.26

Thisyear,weinstalledfourwindturbinestopowerthreeUKdepots usingrenewableenergy.Eachturbinewillproduceenoughenergy topower500homes,savingaround3,200tonnesofCO2e.Any surpluspowergeneratedwillbeexportedbacktotheNationalGrid. In2007,weinstalledoneofCaliforniaslargestroof-mountedsolar installationsonourdistributioncentreinRiverside.Thisyear,the installationgeneratedenoughenergytopowermorethan400 homes.In2011/12,wewillinstallsolarpanelsontenofourstoresin Arizona,whichwillgenerateabout20%oftheenergyusedin-store.

2006/7

2007/8

2008/9

2009/10

2010/11

TescoPLCCorporate Responsibility Report 2011

26

Overview

TRAnSPORT
In2010/11,ourtotalcarbonfootprintfromtransportwas655,669 tonnesofCO2e,12%ofourglobaldirectcarbonfootprint.This year,wehavecontinuedtoreducecarbonemissionspercaseof goodsdelivered.
CARBONFOOTPRINTPERCASEOFGOODSDELIVERED kgCO2e/case
0.177

network optimisation Aswellassavingfuel,weareworkingtorelocateourdepotsso thattheyareinthebestpossibleplaceforstoresintheirregion. Thisyear,networkoptimisationhassaved12millionroadmiles intheUK,andover16,000tonnesofCO2e. Manyofournon-UKbusinessesarestillgrowingtheirdistribution networks.Thisgivesustheopportunitytopositionourdepotsin thebestlocations,toachieveefficiencyindistributionandcarbon.


Responsibletrading

SUPPly CHAin
0.162 0.156 0.150 0.141

2006/7

2007/8

2008/9

2009/10

2010/11

In2009,wesetourselvestheambitioustargetofreducingcarbon emissionsinoursupplychainby30%by2020.Thecarbonemitted ingrowing,manufacturing,processingandtransportingthe productsweselladdsuptoaroundtentimesourdirectcarbon footprint.Andweknowthatreducingemissionsbyconserving resourcesinoursupplychaincanpaybigdividendsonother priorities,suchasendingdeforestation,reducingwasteandusing watermoreeffectively. Withhundredsofsuppliersinmanycountries,manywithexpertise indifferentaspectsofsustainability,thebestwaytomakeprogress istoshareknowledgethroughoursupplychains,acrossthe industry,andacrossnationalboundaries.Thisyear,weasked thesupplierstoourUKmarkettocompletequestionnaireson theircarbonreduction,water-saving,andwasteandpackaging reductionprojects. Sharing knowledge Toshareknowledgeandexpertisemorewidelyacrossoursupply chain,wehavesetupaKnowledgeHub,anelectronicspace tosharebestpracticewithoursuppliersonadailybasistohelp themgaintheconfidencetheyneedtoinvestincarbonreduction. Wecurrentlyhaveover150membersofourKnowledgeHub, andaimtoincreasethisto300in2011/12. Piloting carbon reduction projects Wearemappingthebiggestopportunitiestocutcarboninthe supplychainourcarbonhotspotsandwillusethisinformation todrivecollaborativeprojectswithoursupplierstoreduceemissions. Wearedevelopinganimprovedcarbondatamanagement solution,whichwillhelpustoaccelerateourcarbonfootprinting. Wearepilotingthisapproachinthreehigh-volumecategories intheUKmilk,bakedbeansandwine.Aswelearnmore,wewill extendtheprogrammetomoresectors. OurmilkpilotusesresearchbytheTescoDairyCentreofExcellence attheUniversityofLiverpool,whereresearchershavebeen monitoringwhethergivingcowsdifferentfoodwillimprovetheir digestionandreducemethaneemissions.In2011/12,wewillget carbonfootprintsofmanyofthefarmsthatproducethemilkwe sell.Farmerswillthenbeabletocomparetheirperformancewith otherTescodairyfarmers.Wewillalsousethisinformationtogive farmersabestpracticeguidewithpracticalideasabouthowto reducecarbonemissions,frommanuremanagementtoinvesting inrenewables.

Environment

Saving fuel Despitesignificantbusinessgrowth,wehavenotincreasedthe sizeofourUKdistributionfleetforfouryears.Wetrainourdrivers tomakedrivingmoreefficient,byacceleratingsmoothly,usingthe highestpossiblegear,andmaintainingaconstantspeed.Weare nowreducingthemaximumspeedofourUKvehiclesto50mph. Thisisprojectedtoreduceourfuelconsumptionbyupto3%.  Thisyear,ourUKrailnetworksavedsixmillionroadmilesand over8,000tonnesofCO2e.Wealsocontinuedtoincreasethe numberofdouble-deckertrailersweusetodelivertostores, saving12.5millionroadmilesandnearly17,000tonnesofCO2e.  ThankstoachangeinEUlegislationthisyear,wecannowbuy trailerswitha12%greatercapacity,allowingustodelivermore goodsinfewerjourneys.Wehavestartedtobuytheseinthe CzechRepublic,HungaryandPoland.  Wearecurrentlyrollingoutourtransportmanagementsystem inThailand,whereitisprojectedtosave8,600tonnesofCO2ein 2011/12.Thissystemfindsthemostefficientroutefordelivering productstostores,andhasalreadyhelpedusreducecarbon emissionsfromtransportinSlovakiaandtheUK.
LOW-CARBONDEPOTS

Health Community

Wehaveopenedourfirstdepottobepoweredentirelyby renewableenergyinWidnes,UK.Thedepotisnotconnected totheNationalGrid,butinsteadissuppliedwithheatand electricitythroughapartnershipwithlogisticscompanyStobart andrecyclerPDM.Eachyear,PDMsCHPplantwillturn230,000 tonnesoffoodwastefromfoodretailersincludingTescointo renewableheatandelectricity,saving7,000tonnesofCO2e. OurDaventrydepot,duetoopeninMay2011,hasdirectrail freightaccessforuptoeighttrainsperday,whichisprojected tosavenearly20,000tonnesofCO2eperyear. June2011willseetheofficialopeningofourlow-carbondepot inJiashan,China.Thebuildingwillusearound30%lessenergy thanadepotbuiltin2006,throughbetteruseofnaturallight andrenewableenergytechnologiessuchasgroundsource heatpumps.

People Governance

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TescoPLCCorporate Responsibility Report 2011

Caring for the environment

1.3bn
IntheUK,carbon-labelledproducts accountfor1.3billionofsaleseachyear. Wehavealsolabelled33productsin SouthKorea.

CUSTOmERS
Climatechangewillonlybetackledsuccessfullyifpeoplebecome championsofalow-carbonlifestyle.Ourroleistoshowcustomers thatlivinggreenerlivescanbeattractiveandaffordable.IntheUK weknowthatourcustomerscarbonfootprintisaround100times greaterthanTescosdirectcarbonfootprint,sowehaveareal opportunitytotackleclimatechangebymobilisingourcustomers tomakesmallchangesthatadduptoabigdifference. In2009wemadeacommitmenttohelpourcustomershalvetheir carbonfootprintsby2020.Wehavecarriedoutcustomerresearch ineveryTescomarkettoidentifythekeybarriersandactions neededtohelpcustomersreducetheircarbonfootprints.Price, information,practicalbarriersandasenseofdisempowermentare commonthemes.Everymarkethasproducedaroadmapoutlining measuresplannedtohelpcustomerscutcarbon. InMalaysia,PolandandSouthKorea,weinvolvechildreningreen educationalprogrammesandrunenvironmentalcompetitions. OurTomorrowsFootprinteducationalprogrammeinTurkeyhelps childrenunderstandtheimpactofclimatechange,andhassofar reachedatotalof24,000children.InChina,weareintroducing greenshuttlebusesandelectriccarchargingpoints atstores.Moreinformationoninitiativesindifferentmarkets canbefoundatwww.tescoplc.com/countries.

incentivising green behaviour IntheUK,wegiveoutoveronebilliongreenClubcardpoints, worthover10million,everyyeartocustomerswhorecycle aluminiumcansatourautomatedrecyclingmachines,recycle printercartridgesandmobilephones,choosebaglesshome delivery,buyhomeinsulationorreusecarrierbags. Thisyear,welaunchedgreenClubcardpointsinPolandtoadd toexistingschemesinMalaysia,SouthKorea,Thailandandthe UK.In2011/12,weplantolaunchtheschemeinChina,Hungary andTurkey. Carbon labelling Carbonfootprintingourproductsgivesusvaluablenew informationaboutwhereemissionsareconcentratedinthe supplychain,andwheretherearegoodopportunitiestoreduce thoseemissions.SinceJanuary2008wehavecarbonfootprinted 1,100productsintheUK. Wewanttoencouragecustomerstoconsidertheenvironmental impactoftheproductstheybuy.Wehavethereforeworkedwith theCarbonTrustandotherstakeholderstodevelopauniversal carbonfootprintlabelthatdescribestheemissionsassociated witheachproduct.SinceJanuary2008wehavecarbonlabelled 525everydayproductsintheUK.

Carbon labelling
Carbonlabelsgivea comparisonwithasimilar product,allowingcustomers tomakeagreenerchoice. Manyalsogiveadviceonhow customerscanreducethe carbonfootprintoftheproduct forexample,bywashing clothesatalowertemperature Wearealsogrowing ourcarbonlabelling programmeinSouth Korea,andhave nowlabelledatotal of33products

SinceJanuary2008, wehavecarbon labelled525everyday productsintheUK

Carbon-labelled productsaccountfor 1.3billionofsaleseach year.InJanuary2011 59%ofUKcustomers boughtatleastone carbon-labelledproduct

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Overview

Greener products and advice Thisyear,welaunchedourGreenThingsrangeofenvironmentally friendlyhouseholdproductsintheUS,whichisprovingpopular withcustomers. IntheUK,ourGreenerLivingproductshelpourcustomersmake greenerchoices,andtheGreenerLivingwebsiteprovidesadvice onhowcustomerscancuttheircarbonfootprint.37%ofvisitors tothewebsitesaytheyhavechangedtheirbehaviourasaresult, and28%saytheyhavepurchasedagreenproductaftervisiting thesite. In2011/12,weplantolaunchorexpandgreenwebsitesinour CentralEuropeanmarketstoraiseawarenessandhelpcustomers savemoneyatthesametime. low-carbon services In2010,welaunchedatotalHomeEfficiencyServiceintheUK, offeringcustomersinsulationandsolarenergyproducts,aswell asinformationaboutplanningissuesandgovernmentfunding. Thishashelpedcustomerssavealmost400,000tonnesofcarbon. AspartofaUKGovernmentscheme,wehavealsoinstalledmore than6,000freeinsulationupgradesforsomeofourmostvulnerable customers,helpingthemtostaywarmandreducetheirenergy bills.Formoreinformationseewww.tesco.com/homeefficiency.
SUSTAINABLECONSUMPTIONINSTITUTE

CLIMATEWEEK

InMarch2011TescowastheheadlinepartneroftheUKsfirst everClimateWeek.Thisnationaleventhighlightedthemany positivestepsthatarealreadybeingtakeninworkplacesand communitiestocombatclimatechange.WesupportedClimate Weekinourstores,throughourproducts,inourpublications andwithstaff.TheeventwassupportedandendorsedbyUK PrimeMinister,DavidCameron,formerUNDirectorGeneral, KofiAnnanandformerUSVicePresident,AlGore.

Responsibletrading

Engaging our staff Wehavein-storeEnergyChampionsintheCzechRepublic, Hungary,Ireland,Malaysia,Poland,Slovakia,SouthKorea, Thailand,TurkeyandtheUK.Theirroleistofindwaystosave energyinourstores,andhelptheircolleaguesunderstandthe needtosaveenergy. Inautumn2010,werecruitedover70GreenChampionsfrom acrossourUKbusiness.Championscomefromalllevelsand functionsofthebusiness.Theirroleistoactascatalystsforgreen activityacrossTesco,andwesupportthemwithregulartraining sessionsandanonlinenetworkingtool,allowingthemtoshare theirplansandexperiences.

Environment

In2007,Tescocommitted25milliontocreateanew SustainableConsumptionInstitution(SCI)attheUniversity ofManchester.TheSCIisamultidisciplinarycentreofglobal excellence,researchingmajornationalandinternationalissues associatedwithsustainabilityandencouragingconsumersto adoptmoresustainablelifestyles.Amongitsflagshipprojects, theSCIisfocusingonunderstandingconsumerbehaviour,and identifyingnewtechnologiesandinnovationsacrossthesupply chain.Formoreinformation,seewww.sci.manchester.ac.uk.

Health Community

37% of visitors to the Greener living website say they have changed their behaviour as a result, and 28% say they have purchased a green product after visiting the site.

People Governance

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TescoPLCCorporate Responsibility Report 2011

Caring for the environment

300,000
WearethelargestretailrecyclerofcardboardintheUK, processingnearly300,000tonnesayear.

WASTE, RECyClinG And PACKAGinG


Waste ReducingwasteisapriorityforTesco.Balancingtheneedtoensure stapleproductsarealwaysavailabletocustomersagainsttheneed tominimisewasteisanormalpartofstoremanagement.Eachof ourbusinesseshasitsowntargetstoreducewasteandimprove recycling,workingwithinthelimitsoflocalinfrastructure.Every TescostoreintheUKhaswastetargetsthatarereportedona weeklybasis. Since2009wehavesentnowastefromourUKstoresdirectlyto landfilltheonlymajorUKretailertodoso.Ifwastecannotbe recycled,wemakesurethat,wherepossible,itisusedtomake alternativesourcesofenergy. Recycling  InChinaweachievedourtargetforcardboardrecycling,andour performanceforvegetableoilandfreshwasteimproved.  WehaveplanstooperateaRecyclingServiceUnitinthe CzechRepublicandcentralisedwasterecyclingthrough distributioncentresinSlovakia.  InIrelandweheldWasteElectricalandElectronicEquipment CollectionDaysat28stores,allowingcustomerstobringbacktheir oldelectricalappliancesforrecycling.Werecycledatotalof286 tonnesofelectricalwaste,theequivalentof19,000televisionsor 150,000hairdryers.

Packaging Packagingcanappeartobeoneofthebiggestenvironmental issues.However,packagingprotectstheproductswesell, helpingtoreducefoodwasteandthereforecarbonemissions. Independentresearchshowsthat,indevelopingcountries,thelack ofpackagingorinadequatepackagingcausesuptohalfofallfood todecaybeforeitreachestheconsumer,leadingtomorewaste. IntheUK,withmoreefficientpackaging,thefigureisonly3%. Nevertheless,wearecommittedtoreducingpackagingwhere wecandosowithoutcompromisingitsroleinprotectingand preservingtheproduct.Ourpolicyisbasedonfivekeyprinciples. Packagingshould:  befitforpurpose;  usethelightestweightmaterials;  usematerialsfromthemostsustainablesources;  maximiseopportunitiesforrecyclingandrecovery;and  bedesignedtohavethelowestcarbonimpactkeepinginmind theproductandvaluechain. Wehavealreadyreducedpackagingonourown-brandproducts intheUKbymorethan15%since2007. IntheUK,TescoisasignatorytoWRAPs(WasteandResources ActionProgramme)Courtauld2,anindustry-widecommitment toreducepackagingandwasteby2012,againstabaselineof2009. Wehavecommittedto:

 InTurkeysomenewstoresarebeingservedbyanewwaste contractor,whichhelpedusexceedourrecyclingtarget.Werecycle  reducetheweight,increaserecyclingratesandincreasethe paper,nylon,certainplasticsandtin,asregulationrequiresusto recycledcontentofgrocerypackaging,loweringitscarbonimpact giveotherplasticsandcardboardtospecialisedcompaniesforfree. by10%;  IntheUKwerecycleallourcardboard,metal,officepaper, plastic,chickenfatandcookingoil.Wearethelargestretailrecycler  reduceUKhouseholdfoodanddrinkwasteby4%;and ofcardboardintheUK,processingnearly300,000tonnesayear.  reduceproductandpackagingwasteinthesupplychainby5%. Thecardboardwerecycleismadeintonewpackaging,aprocess thattakesjust14days.Werecyclearound22,000tonnesofplastic Wehavealsosignedavoluntaryagreementthroughtheindustry bodyIGDtoplayourpartinanindustrytargettorecycle150,000 ayear,oftenturningitintobinliners. tonnesandeliminate75,000tonnesofwastebytheendof2012,  In2010werolledoutbatteryrecyclingpointstoallourUKstores. againstabaselineof2009. Thesehaveprovedpopularandourcustomershaverecycled 228tonnesofbatteriesthisyear.Wealsoinstalledinnovativenew HANGERRECyCLING informationscreensonourUKautomatedrecyclingmachines, Since2009,wehaveprevented1,600tonnesofplasticgoingto whichcommunicatehowmuchCO 2isbeingsavedbyrecycling. landfillthroughourUKhangerrecyclingprogramme.Customers leavetheirhangersatthecheckout,andtheyareeitherreused orrecycled.From2011/12onwards,weaimtoprevent5,000 tonnesofplasticgoingtolandfilleachyear.

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Overview

PROGRESS On SElECTEd 2010/11 PRiORiTiES


ireland
100%ofwastedivertedfromlandfillby2011 not achieved at the end of 2010/11, 90% of waste was diverted from landfill. We have sent no waste from our UK stores directly to landfill since 2009 not achieved a Tesco Japan customer now uses around 10% fewer carrier bags than in 2009 Achieved we provided over 90,000 places this year Achieved over 13,000 children have been educated on the impact of climate change this year, bringing the total to 24,000 Achieved since January 2008, we have carbon labelled 525 products. 24% of Tesco customers have seen the label on a product, rising to 30% among 16-24-year-olds not achieved a Tesco UK customer now uses around 60% fewer carrier bags than in 2006. For more details, see www. tescoplc.com/carrierbags
Health Responsibletrading

Japan

Reducedcarrierbaguseby20%

South Korea Turkey

76,000placesintheeParanGreenLeadersProgramme Runeducationprogrammeonclimatechangefor12,000children

UK

Increasenumberofproductswithcarbonlabelto500andincrease customerawarenessofthelabel

Environment

UK

Reducecarrierbaguseby70%byendof2010 (comparedto2006)

Community People Governance

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TescoPLCCorporate Responsibility Report 2011

Providing customers withhealthy choices

TescoPLCCorporate Responsibility Report 2011

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Overview

Responsibletrading

Environment

Health

Community

People

Governance

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TescoPLCCorporate Responsibility Report 2011

Providing customers with healthy choices

Helping our customers eat well and get active


2010/11 in numbers
We want to help our staff and customers to lead healthy lives. As a global business, we know that healthy lives means different things in our different markets. We aim to work with our industry partners, academic and technical experts, and governments to understand and help tackle key public health issues for example, food safety, obesity and alcohol misuse.
Ourfirstpriorityistoprovidesafe,goodvaluefoodforour customers.Thisismorechallenginginsomemarketsthanin others,andwearecommittedtoupholdinghighstandardsoffood safetyacrosstheworld. Wehaveaclearroletoplayinmakinghigh-qualityfoodsaffordable toeveryone,andingivingcustomerstheinformationtheyneed tomakehealthyfoodchoices.Wecanalsouseourtrustedbrand toencourageourstaffandcustomersacrosstheworldtoadopt healthy,activelifestyles. ForTesco,providingcustomerswithhealthychoicesmeans:  makinghealthyoptionsaccessibletoeveryonethroughpriceand promotions,healthyranges,andbyreformulatingourproducts;  providingthebestinformationonthenutritionalvalueofour products,andonhowourstaffandcustomerscanlivehealthy lives;and  makingitmoreattractivetoleadanactivelifestyle.

4.2 million 1 million 33m


Annualsalesvalueofthe TescoFreeFromrangein theUK

PeoplegotactiveinThailand Schoolchildrenwhotook throughaerobics,walking partintheUKsGreat andfootball SchoolRun

3,600
Productsreformulated since2005intheUKto reducetheirsalt,sugaror saturatedfatcontent

18,000
Childrenwhoparticipated intheTescoBankFootball challenge

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34

Overview

HEAlTHy OPTiOnS
Food safety Basicfoodsafetyremainsaprimaryconcernforcustomersinsome ofourmarkets.Here,wecanplayanimportantroleinspreading bestpracticeandimprovingstandards. Forexample,thereisanenormouslevelofinterestinfoodsafety inChina.TescoissupportingtheChineseGovernmentasitcodifies therulesonfoodsafety.Atthesametime,wearesupportingthe Chineseauthoritiesinbuildingcapabilitywithinthesupplychain, sharingourknowledgeonfoodsafetyinstorageanddistribution. Healthy eating brands Ourhealthyeatingbrandscontainnutritionallybalancedproducts withcontrolledamountsoffats,sugarandsalt.Weofferthemin sevenmarkets.Forexample,ourEatWellrangeintheUSfeatures reducedcalories,fat,saturatedfatandsalt.

QUANTITyNOTQUALITy

Researchshowsthatpeopletendtoeatbyvolumefillingtheir platesorbowlsratherthanbythecalorificcontentoftheir meal.Soreducingthecaloriecontentoffoodcan,insome cases,bemoresuccessfulthanencouragingpeoplesimplyto eatless.TescoisworkingoncaloriereductionaspartoftheUK GovernmentsPublicHealthResponsibilityDeal,whereweare lookingatwaystohelpcustomersreducetheircalorieintake forexample,byreducingthesugarcontentoffullsugarsoft drinks.Thisyear,weremoved430tonnesofsugarfromour carbonateddrinksandsquashes,equivalenttoa4%reduction acrosstherange.

Responsibletrading

BETTER inFORmATiOn
Environment Health

nutrition labelling Thisyear,werebrandedtheUKrangeandintroducedanewwave Allofoureligibleown-brandfoodlinesacrosstheglobehave nutritionlabelling.Theonlyexceptionsarefoodcookedin-store logoatthetopofpacks,helpingcustomersfindhealthieroptions moreeasily.WehaveaLightChoicesrangeofproductsintheUK, andproductswhereitwouldbeimpracticaltoaddalabel,such asherbsandspices.OurnutritionlabellingusesGuidelineDaily allofwhichhavelessthan3%fatoratleast30%lessfat(or30% Amounts(GDA)andtellscustomershowmanycaloriesandhow fewercalories)thantheequivalentTescostandardproduct. muchsugar,fat,saturatesandsalttheywilleatinoneserving, Changing the formula alongwiththepercentageGDAforatypicaladult. Wehavebeencuttinglevelsofsalt,sugarandsaturatedfatacross In2005,TescowasthefirstUKretailertoputnutritioninformation ourrangessince2005,andsincethenhavereformulatedover onthefrontoffoodpacks.Thisyear,afterasuccessfultrialinour 3,600UKproductstoimprovetheirnutritionalcontent600this staffrestaurants,weintroducednutritionlabellingonthefood yearalone. weserveinourUKin-storecafes.Formoreinformation,see IntheUKandUS,allourown-brandproductscontainnoartificial www.tescoplc.com/labelling. transfatsandnoartificialcoloursorflavours. TheUKGovernmentrecommendsthatpeopleconsume Wecontinuetoleadonreformulation:forexample,in2010,the fiveindividualportionsoffruitorvegetableseveryday.We UKFoodStandardsAgencysetatargetforsaltreductioninready communicatethistocustomersthrough5-a-daylabelson meals.TheaverageTescoreadymealalreadycontained10%less appropriateproducts.The5-a-daymessageisnowwellknownin saltthanthetarget.IntheUS,wehaveremovedhigh-fructose theUK,butnotinothermarkets.In2011,wewillrollout5-a-day cornsyrupfromallFresh&Easyproducts. labellinginChina. Ineverymarketinwhichweoperate,weworkwithgovernments tohelpthemachievetheirhealthtargets.Wearecurrentlyworking withtheUKGovernmentonitsPublicHealthResponsibilityDeal (seebox). IntheUK,weareworkingwiththeindustrybodyIGDtoencourage theDepartmentofHealthtoincludecompositefoodsinthe 5-a-dayscheme,helpingpeopleeatmorefruitandvegetables. Currently,theofficial5-a-daybrandingonlyappliestofruitand vegetableswherenosaltorsugarhasbeenadded.Thismeansthat ifacustomerservesaportionofpeasalongsideoneofourready meals,forexample,itwouldcounttowardstheir5-a-day.Butifwe addedthepeastothemeal,itwouldntcount,evenwhenthemeal itselfisahealthyoption.WeareworkingwiththeDepartmentof Healthandcolleaguesinindustrytofindasolution.
FREEFROM

Community

We have a clear role to play in making high-quality foods affordable to everyone, and in giving customers the information they need to make healthy food choices.

People

In2003,TescowasthefirstUKretailertolaunchanown-brand rangeforcustomerssufferingfromallergiesorintolerancesto wheat,glutenand/ormilk.TheTescoFreeFromrangeisnow wortharound33millioneachyear,andresearchtellsusthat providingtherangehasapositiveimpactoncustomerloyalty. WeworkcloselywithCoeliacUK,theleadingcharityforpeople withcoeliacdisease,tounderstandtheneedsofthosewith glutenintolerance.

Governance

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TescoPLCCorporate Responsibility Report 2011

Providing customers with healthy choices

Change4life Tohelpcustomersmakehealthierchoices,wesupporttheUK publichealthcampaignChange4Life.Oursupportincludes:  fruitandvegetablepromotionsin-store,andpromotionswith suppliersonBreakfast4Life(encouraginghealthybreakfasts, particularlyamongchildren);  articlesonhealthyeatinginTescoMagazine;and

ACTivE liFESTylE
Weencouragepeopletoleadmoreactivelives,helpingthem managenotjusttheenergytheytakein,butalsotheenergythey expend.Lastyearwegotmorethan7millionstaffandcustomers active,exceedingourtargetsinallourmarkets.

OneofourmostsuccessfulprogrammesisGetHealthywith TescoLotusinThailand.Lastyear,wegot4.2millionpeopleactive throughparticipationinanationalaerobicscompetition,theannual  localinitiativesorganisedbyourin-storeCommunityChampions TescoLotusWalkathonandourfootballclinics. (seepage44). IntheUK,our2010GreatSchoolRuninvolvedoveronemillion Formoreinformation,seewww.nhs.uk/change4life. primaryschoolchildren,andover700,000staffandcustomerstook partinCancerResearchUKsRaceforLifeandRun10k.Since2002, Being responsible on alcohol nearlytwo-thirdsofourstaffhavetakenpartinorsupportedour Ourpositionasamajorretailerofalcoholbringswithitadutyto ensurethatwesellitresponsibly.WeuserecommendedDepartment races,raisingatotalof7.1million. ofHealthlabellingonallourown-brandalcoholintheUK,showing Inthe2010RunforLifeintheCzechRepublicandSlovakia,we customersthenumberofunitsofalcoholinthebottle.Wehave increasedsignificantlythenumberofparticipants(from9,000to strongmeasuresinplacetopreventsalesofalcoholtounder-age over17,000)andtheamountraisedforcancerresearch.InMalaysia, customers. 4,000peoplejoinedourWalkforKids,raisingoverRM50,000 (10,300)forRumahNurSalam,theCharityoftheyear(seepage WesupporttheUKGovernmentsactiononalcoholthrough 45).InIndia,stafftookpartintheBangaloreMidnightMarathon, CommunityAlcoholPartnerships,whicharerunbylocal governments,workingcollaborativelywithalcoholretailers,schools aimedatrestoringgreeneryinthecity. andthepolicetoencourageresponsibledrinking.Wehavealready TESCOANDCANCERRESEARCHUKSRACEFORLIFE2011 takenpartin31ofthesepartnerships,andareparticipatinginthe firstcentralLondonpartnershipin2011. 2011willbeourtenthyearofsupportingRaceforLife,and marksanewstageinourrelationship.Thisyearwewillwork WewerealsotheonlyUKretailertosupporttheGovernments incloserpartnershipthaneverbefore,makingajointeffort callforaminimumpriceperunitofalcoholin2010.Wehave torecruitmorewomenandraisemoremoneythaneverfor consistentlymadeitclearthatwewouldplayaconstructiverole thefightagainstcancer.Toachievethis,wehavelaunched inanydiscussionsonintroducingamoreeffectiveminimumprice, amajornewrecruitmentcampaign,includingTVadvertising, providedthesediscussionsareledbyGovernmenttoensureany brandingourlorries,producingaspecialsupplementinthe actioniseffectiveandcomplieswithcompetitionlaw. TescoMagazine,allowingparticipantstopaytheirregistration Formoreinformation,seewww.tescoplc.com/alcohol. feethroughClubcardvouchers,andgreaterengagement withschools.

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Overview Responsibletrading Environment Health Community

raised by part in o staff taking r su our race pporting s since 2002

7.1m
37  TescoPLCCorporate Responsibility Report 2011

People Governance

Providing customers with healthy choices

Football Footballcontinuestobeanextraordinarilypopularandeffective wayofengagingwithchildrenacrossmanyofourmarkets.  WorkingwiththeEnglishFootballAssociation,wefund106 coachesthroughouttheUK,whoteachfootballskillstoboys andgirlsaged511.TheFATescoSkillsprogrammeformsthe FAscentralstrategyforencouragingchildrentoplayfootball andbuildingthefuturehealthofthegame.Thisyear,weprovided over740,000placesontheprogramme.  WealsoworkwithEvertonFootballClubandtheShanghai DisabledPersonsFederationtohelpchildrenwithdisabilitieslearn footballskills.Inthelastthreeyearsnearly1,500disabledchildren havereceivedfootballtraining.Thisyear,weranfootballsummer campsinBeijing,Guangzhou,Shanghai,TaizhouandTianjin.  InApril2011,wewilllaunchtheeParanyouthFootballClubin SouthKorea.Theclubwilloperateontwolevels:elite,ateam of30speciallyselectedchildrengivenprofessionalcoaching, andhobby,aweeklyfootballclassforchildrenatallskilllevels.
TESCOBANKFOOTBALLCHALLENGE

Canoeing WeareproudtobehelpingprepareBritishathletesforthe2012 OlympicGames,bybecomingtheGoldsponsorofGBCanoeing inpartnershipwiththeBritishCanoeUnion.GBCanoeingis dedicatedtosupportingthemosttalentedathletesintheOlympic disciplinesofCanoeSlalomandCanoeSprintRacing,andwere particularlypleasedtosupporttheirtrainingattheOlympicslalom coursenearourCheshuntHeadOffice.


GETTINGACTIVEWITHTESCO
Market Number of people who got active

InJanuary2010,TescoBankinvested1millioninanew footballprogrammeforchildreninScotland,inpartnershipwith theScottishFootballAssociation.Overfouryears,theTesco BankFootballChallengeaimstoreachover70,000boysand girlsinatleast1,600primaryschoolsacrossthecountry.This year,18,000childrenhaveparticipatedintheprogramme,and feedbackhasbeenoverwhelminglypositive,frompupilsand teachersalike.

China Czech Republic Hungary malaysia Poland Slovakia South Korea Thailand Turkey UK

36,000 9,400 6,100 16,600 5,100 8,300 378,000 4.2 million 29,000 2.55 million

Total number of people getting active with Tesco: over 7 million

in January 2010, Tesco Bank invested 1 million in a new football programme for children in Scotland, in partnership with the Scottish Football Association.

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Overview

PROGRESS On SElECTEd 2010/11 PRiORiTiES


China
Rollouttechnicalsupportforsupplierstoimprovefoodsafety andquality Achieved we rolled out technical support for suppliers to improve food safety and quality of own-brand products not achieved we have instead focused on developing healthier products for our customers Partially achieved we have launched 24 lite Choices lines in-store Achieved for 2010/11 we provided over 740,000 places on the programme this year
Responsibletrading

Hungary

LaunchaGDAeducationprogrammeincludingatoolkitforstudents

malaysia UK

Launch50LiteChoiceslines ExpandFATescoSkillsprogrammeto4.5millionplacesby2014

Environment Health Community People Governance

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Actively supporting localcommunities


64.3m
donated to cha r and good causities es
TescoPLCCorporate Responsibility Report 2011 40

Overview

Responsibletrading

Environment

Health

Community

People

Governance

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TescoPLCCorporate Responsibility Report 2011

Actively supporting local communities

making a positive contribution in our neighbourhoods


2010/11 in numbers

Raisedbycustomersand staffforcharitiesandgood causesinadditiontothe 64.3mdonatedbyTesco

10m

700,000 10,000+

Onlinevotesreceivedfor environmentalfilmsmade bystudentsinPoland

We want to be a good neighbour in all the communities in which we operate. This means being in tune with the needs and values of local communities, engaging positively on the issues that matter to them, and making lasting contributions that improve local areas. By doing this, we ensure we are true to our values, and help build our customers lifetime loyalty.
ThereisadebateintheUKandelsewhereaboutthetax contributionofinternationalbusinesses.Thisyear,Tescopaid 1.5billionintaxesintheUK,includingcorporationtax,business ratesandemployersNationalInsurancecontributions.According toarecentsurveyconductedbyPricewaterhouseCoopersonthe totaltaxcontributionofTheHundredGroup(whichrepresents thefinancedirectorsoftheUKslargestcompanies),Tescowas thehighestrankedcompanyintheUKfortotaltaxespaid. Ourmostvisiblecontributiontocommunitiesisdelivered throughourshops.Weregularlyopenstoresinareaswhichother businesses,includingretailers,haveabandonedorneglected. Thesestoresprovideaccesstoqualityfreshfoodataffordable pricesincommunitiesthatareoftenotherwiseisolated.Theyalso bringmuch-neededjobsandresultingincometothelocalarea. WeareparticularlyproudofourRegenerationPartnership programmeintheUK. Ourstoresareoftenafocalpointofthelocalcommunity, aplacewherepeoplemeetandinteract.Wewanttoensure thatweunderstandandcanservetheneedsofourcommunities. Forexample,morethan20languagesarespokenbystaffat ourCheethamHillstoreintheUK,improvingourabilitytoserve ourcustomers. Butbeyondthis,ourstaffandourcustomerslooktoustoget behindlocalcauses,whetherthatmeansprovidingfundsfor alocalcharity,givingvisibilitytoalocalcampaign,orproviding opportunitiesforourcustomersandstafftohelponlocalissues.

50,000

Peopletakingclassesat ourFamilyClubsinTurkey

Newvolunteersrecruited atCommunityFairsin theUK

TreesplantedinThailandby Tescocustomerssince2007

5.7 million

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Overview

TESCOCOMMUNITyFAIRS

OurfirstUKCommunity Fairstookplacein2009. In2010,weincreased thenumberoffairsfrom 20to100.Thefairstook placeinstorecarparks onSundaysoverthe summer,andfeatured acombinationofstalls fromlocalandnational charities,community groupsandsuppliers.

Responsibletrading Environment

STROnGER, GROWinG COmmUniTiES


Webelievethatlocalpeopleshouldbeabletoshapethefutureof theircommunities.Thatiswhywearecommittedtotalkingand listeningtolocalcommunities,toensureourdevelopmentsmeet theirneedsandexpectations.Thisisacrucialpartofbeingagood developerand,moreimportantly,agoodneighbour. Themajorityofourcustomersarepositiveabouttheprospect ofgettinganewTescostoreintheircommunity.However,we areawarethatTescoissometimesperceivedtohaveanadverse impactonretaildiversityandindependentshops.  InSouthKorea,werespondedtoconcernsabouttheimpact offoreignretailersonsmall,independenttradersbyworkingwith thegovernmenttocreateacollectiveownershipmodel.Underthis scheme,localtradershaveastakeinTescoExpressstores,sothe communityitselfhasavoiceinthebusiness.  IntheUS,ourFresh&Easybusinessisbuiltaround neighbourhoodstores.  WesupportgovernmentplanningpoliciesinThailand,which emphasisetheimportanceoftowncentres.  IntheUK,webelievethatourstores,whichareoftenlocatedat theheartoflocalcommunities,canhelprevitaliseatowncentreby bringingbackcustomerswhomightotherwisehaveshoppedout oftown.ResearchbytheUniversityofSouthamptonshowsthat, wherenewfoodstoreswerebuiltinorontheedgeoftowncentres, theproportionofgroceryshoppingdoneinthelocalarearose from44%to73%within12months.Formoreinformationonthis researchseewww.riben.org.uk/report.

Regeneration Partnerships OurRegenerationPartnershipstoresprovidemuch-needed investmentandjobsforlong-termunemployedpeopleinsome ofthemostdeprivedurbanareasintheUK.Whenwebuilda RegenerationPartnershipstore,weworkwithlocalorganisations totargetlocallong-termunemployedpeople.Weguarantee aface-to-faceinterviewforeveryonewhoapplies.Successful candidatestakeaneight-weektrainingcoursetobuildtheir confidenceandteachthemkeyskills,withaguaranteedjob attheend. Thisyear,wedevelopedeightnewRegenerationPartnerships overtwiceasmanyasin2009/10bringingthetotalto35stores andaround4,000jobsforlong-termunemployedpeople.Formore informationonotherspecialemploymentschemesseepage56.
GERRARDSCROSSSTORE

Health Community

Thisyear,wefinallyopenedourstoreinGerrardsCross,UK, afteralongandchallengingprocess.Buildingworkonthesite ledtothecollapseofarailwaytunnelin2005,meaningitwas particularlyimportantforustore-establishgoodlinkswiththe localcommunity.WeworkedwithJobcentrePlustoemploy localpeople,resultingin1,500applicationsfor170jobsand rolesforsomeofthecommunityslong-termunemployed people.Wealsodonated100,000tothelocalparishcouncil, tospendforthebenefitofthewholecommunity.

People

We want to ensure that we understand and can serve the needs of our communities.
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Governance

Actively supporting local communities

600+
Farmersandfoodproducerswehave assistedinimprovingtheirbusiness planningandmarketingthrough dunnhumbyspartnershipwith KentBusinessSchool.

PROFILE:SHIRLEyHAyES,COMMUNITyCHAMPION, RICHMOND,NORTHyORKSHIRE

Withalonghistoryofvolunteeringandapreviousjobasatutor incitizenship,itsnowonderthatShirley,a43-year-oldmumof twinboys,jumpedatthechancetobecomeaTescoCommunity Champion. Ilovemixingwithpeopleandgettingoutintothecommunity, soIknewthisrolewasmadeforme!saysShirley.Ialsothink communityworkisgreatforteam-buildingandboosting morale,andIknowhowimportantthatisforpeopleworking inthesedifficulteconomictimes. Shirleyisagiftedartist,andoftendrawsonhercreativeskills toreachouttoschoolchildren,staffandcustomers.Shehas helpedchildreninseverallocalschoolstocreatecollagesoutof recycledmaterials,gettingthemexcitedaboutrecycling.Shirley alsogivesgreenstoretours,showingcustomershowTescois reducingenergythroughnewtechnologies,andgivingtipson howtheycancuttheirowncarbonfootprints. Shirleyisanavidfundraiser,andhascollectedforanumberof differentcharities,includingHelpforHeroesandTheCancer Trust.Shesays,Ilikemakingadifferenceandsupportinglocal charitiesthatreallybenefitfrommyhelpandtimeIcangive them.IfeellikeImthefriendlyfaceofabigorganisation.

Community Champions Ourin-storeCommunityChampionshelpuscommunicate effectivelywithlocalcommunities.Bygivingouremployees thetimeandtoolstoworkwiththeirneighbourhood,wemake arealdifference.CommunityChampionsarepaidtospend18 hoursaweekworkingwiththeirlocalcommunity.Forexample:  givingstoretourstolocalschoolchildrenorgoingintothelocal primaryschooltotalkabouthealthyeating;  organisingcollectionsorbagpackingforalocalcharity;  meetingthefireserviceorlocalcharitiestofindouthowwecan helpthem;or  gettingourstaffandcustomersinvolvedineventssuchasRace forLife. Wehave669CommunityChampionsineightmarketsacrossthe Group(China,theCzechRepublic,Hungary,Ireland,Malaysia, Slovakia,SouthKoreaandtheUK).Wewillberollingout CommunityChampionsacrossourstoresinTurkeynextyear.

COmmUniTy iniTiATivES
Wehavemanyotherinitiativestoengagewithlocalcommunities tohelpcharities,improveeducationorprotecttheenvironment.  IntheCzechRepublic,ourTescoFoundationsupportslocal NGOsworkinginhealthandsocialcare.In2010/11,CZK700,000 (23,700)wassharedbetween21charitiesprovidingequipment fordisabledpeople,computerprogrammesforblindchildren,and tutoringforchildrenoffamiliesonlowincomes.  InIndia,wehavefundedqualityeducationforpeopleonlow incomeswiththeParikrmaFoundationsince2007.  InPoland,ourTescoforSchoolsinitiativeranagreeneducation competitionforstudentstomakeanenvironmentalfilm.Over600 filmsweresubmitted,andalmost700,000onlinevoteswerecast forthebestfilm.The30winningfilm-makersreceivedhigh-tech equipmentfortheirschool,and300studentswonanindividual award.  AlsoinPoland,weheld804store-basedcommunityevents insupportoffloodvictims,aswellasrunningablooddonation programme.

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Overview

 InSouthKorea,werun107SchoolsofExtendedEducation, wherechildrencancomeforextracoursesafterschool.Thisyear weprovidedover940,000placesandranover500environmentrelatedprogrammes,includingcoursesinrenewableenergy, climatechangeandecosystems.In2011,wewillstartcoursesin music,artandEnglishforchildrenoffamiliesonlowincomes.  AlsoinSouthKorea,nearly40,000childrentookpartinour environmentalpaintingcompetition,andthewinnersrepresented theircountryintheglobalUNEnvironmentPaintingCompetition.  InThailand,aspartofourPlantninemilliontreescampaign, weplanted950,000treesthisyear,bringingthetotalto5.7million since2007.  AlsoinThailand,weachievedourOnemillionhours volunteeringtarget,whichhasreinforcedourreputationas theretailermostsupportiveoflocalcommunities.  InTurkey,wearetheonlyretailertorunFamilyClubs,where 50,000peopletakeclassesintopicsincludingEnglish,Pilates, chessandsalsa.  IntheUKweextendedourCommunityFairsinitiativeto 100stores,helpingthousandsoflocalcharitiesandsuppliers toshowcasetheirwork,andrecruitingover10,000volunteers. Formoreinformation,seewww.tescoplc.com/countries. Supporting communities in our supply chain Wearealsoactiveinthecommunitiesthatsupplytheproducts wesell.  InSriLanka,wehavebeenworkingtobringtogether communitiestornapartbywar.Wearenowthelargestcustomer ofthelocalclothingfactory,accountingfor80%oforders.  InpartnershipwithKentBusinessSchool,dunnhumby(our consumerresearchbusiness)providescustomerinsightfreeof chargetofarmersandsmallfoodproducersallovertheUK.Over thepastfiveyears,wehavehelpedover600farmersandfood producerstoimprovetheirbusinessplanningandmarketing.
BUyONE,GIVEONE

CHARiTABlE GivinG
Acrosstheglobe,ourstaffandcustomershelpedusraise 10millionforcharitythisyear,exceedingourtargetof7million. Thesefundsprovidevaluablesupporttolocal,nationaland internationalcharities,helpingthemtodevelopnewprogrammes andsupportthoseinneed. Formoreinformationseewww.tescoplc.com/giving. Corporate giving Eachyear,wesetourselvesatargettodonateatleast1%of ourpre-taxprofitstocharitiesandgoodcauses.Thisyearwe donated64.3milliontocharitiesandgoodcausesthroughdirect donations,cause-relatedmarketing,giftsinkind,stafftimeand managementcosts.Thisrepresents1.8%ofourpre-taxprofits almostdoubleourtarget. Emergency relief and humanitarian aid Weworkhardtorespondquicklytonaturaldisasterswherever theyhappen.OurpartnershipwiththeRedCrosshashelpedus togetfundstothoseinacuteneed.Thisyear,ouremergency givingincludeddonationstohelpthevictimsoffloodsinCentral EuropeandtheQinghaiearthquakeinChina,aswellasfloodsin Indonesia,Malaysia,ThailandandVietnam. Wewereoneofthefirstbusinessestorespondtothedevastating earthquakeandtsunamiinJapaninMarch2011.Wemadea corporatedonationof50,000asaGroup,andallowedour UKcustomerstodonatetheirClubcardvoucherstotheappeal. OurJapanesebusinessworkedwiththeRedCrosstoenable customersinTokyotodonatein-store,andmatchedstaffand customerdonationsuntiltheendofApril2011. Charity of the year WerunCharityoftheyearcampaignsinfivemarkets.Ineach market,weselectacharitythatrepresentsacauseourstaffand customerscareabout,andthatcanmakeadifferenceonthe ground.Thisyear,wesupportedthefollowingCharitiesoftheyear:  IrelandTheIrishCancerSociety(www.cancer.ie).Weraised 950,000(805,000)in2010/11,whichhelpedtofundCareto Drive,thecharitysnationalvolunteerdrivingserviceforcancer patients.  JapanTheMake-A-WishFoundation(www.mawj.org). Thefundsweraisedhelpedtograntthewishesofchildrenwith life-threateningmedicalconditions.  MalaysiaRumahNurSalam(http://nursalamchowkit.blogspot. com).ThemoneyraisedbyTescostaffandcustomersfundsthe runningcostsofa24-hourshelterandactivitycentrethatprovides asafeenvironmentforhomelesschildreninKualaLumpur.  PolandTheHappyKidsFoundation(http://www.tesco.pl/ spolecznosci-lokalne/tesco-dzieciom.php).Themoneyweraised thisyearhashelpedthecharitytoopenanewfosterhomefor sevenchildreninWieruszw,andalsosupportstherunningoffive otherfosterhomes.  UKCLICSargent(www.clicsargent.org.uk).Weraised 7.2millionin2010/11.ThemoneywasusedtofundCLICnurses, whohelpchildrenwithcancerspendmoretimeathomeandless timeinhospital.
Community Responsibletrading Environment Health

In2009,welaunchedBuyOne,GiveOne,inwhichtheUK businessdonatedaschooluniformtoachildinKenyaforevery uniformboughtbyourcustomers.12,000childrenreceivednew schooluniformsthroughthescheme.Thisyearweworkedwith SavetheChildrentoexpandtheschemetoBangladeshand SriLanka.Todate,wehavedonated96,000schooluniforms, allowingmorechildrenaccesstoeducation.

People Governance

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9.3m
Thisyearwedonated9.3million ofequipmentto41,000 schoolsandclubsintheUK.

IntheUK,weexceededourlargestevertargetof5million,raising amassive7.2millionintotal.WealsodramaticallyincreasedUK customerdonationsthroughcoordinatedmarketingwithP&G aroundtheirhouseholdproducts.Ouremployeesurveystellusthat two-thirdsofstafffeelproudtoworkforTescoasaresultofthis campaign.   TESCOFOUNDATIONINTHECZECHREPUBLIC  WewerenamedthebiggestdonorinhistoryintheCzech nn RepublicbyNROS,aCzechcharitablefoundation,whenthe  TescoFoundationraisedCZK3.6million(122,000)forHelpthe  Childrenthroughacause-relatedmarketingcampaignwithP&G. national collections Wehelpcharitiestoraisemoneybyallowingthemtocollect outsideourstores.In2010/11,theRoyalBritishLegionraised 3.3millionthroughTescocollections,andtheSlovakHumanitarian Councilraised73,000throughitsChristmascollectionwithTesco. ThisyearatRamadan,inpartnershipwiththeTurkishRed Crescent,weraisedenoughmoneytoprovideover17,000food packagesforpeopleinneed.Wealsodonated1,300unitsofblood, avaluableresourceinTurkey,collectedfrombothourstaffand customersinstorecarparks. Equipment for schools
MARySMEALS

ThroughTescoforSchools&Clubs,UKcustomerscancollectand redeemvouchersforequipmentforschools.Thisyear,wedonated 9.3millionofequipmentto41,000schoolsandclubs,bringingthe totaltomorethan170millioninthelast20years. Formoreinformation,seewww.tescoforschoolsandclubs.com. Customerstoldustheywouldliketoparticipateinthescheme, butcurrentlydonotbecausetheyhavenodirectlinkwithaschool orclub.In2011/12,wewillintroduceboxesin-storeforcustomers todeposittheirvouchers,allowingthemtochoosefromseveral localschoolsandclubs. IntheUS,weranourShopforSchoolsschemeforathirdyear, inwhichparticipatingschoolsreceiveUS$1foreveryUS$20spent atFresh&Easystores.WealsorunShoppingNightforSchools, where5%oftheprofitsmadeonthatnightgotoaspecificschool.

WebegansupportingMarysMeals,aninternationalcharity providingmealsforschoolchildren,throughtheTescoCharity Trustin2009.Tescossupportprovidesmealsforover4,000 schoolchildreninIndia,Kenya,MalawiandThailandeveryyear. Inspiredbythisinitialsupport,ourInternationalSourcingOfficein Bangaloredecidedtotakeitsownprojectforward,andhasbeen workingwithMarysMealstoprovidefoodandprimaryeducation tochildrenwithoutaccesstogovernmentschools.Elevenofour Bangaloreofficestafftookpartinamarathon toraisefunds. WenowprovideallthefundingforacentrerunbyMarysMeals inDelhi,whichcatersforaround40childreneachday.Our involvementhasledtoimprovedsanitationanddrainagefacilities atthecentre,aswellascleandrinkingwater,stationery,clothing andutensils.

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Overview

PROGRESS On SElECTEd 2010/11 PRiORiTiES Hungary Poland South Korea Thailand


LaunchCommunityChampionsintenstores Organise550eventsforlocalcommunities ProvideonemillionplacesatourExtendedEducationAcademies (nowcalledSchoolsofExtendedEducation) Plant950,000trees Achieved we launched Community Champions in 21 stores Achieved we organised a total of 804 events for local communities not achieved this year, we provided over 940,000 places Achieved we planted 950,000 trees this year, bringing the total to 5.7 million Achieved we now have over 300 Community Champions in the UK Achieved we opened eight Regeneration Partnership stores and created 667 jobs for long-term unemployed people
Responsibletrading

UK UK

DoublenumberofCommunityChampionsto250andrun100 successfulCommunityFairs OpensixRegenerationPartnershipstoresintheUKandcreate atleast600jobsforlong-termunemployedpeople

Environment Health Community People Governance

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TescoPLCCorporate Responsibility Report 2011

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Overview

Responsibletrading

Environment

Health

Community

People

Governance

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Creating good jobs and careers

making Tesco a great place to work


2010/11 in numbers
We have 293,676 employees across the UK, making us the largest private-sector employer, and a total of 492,714 employees worldwide. We provide diverse career opportunities for all our staff worldwide Jobsforlong-term unemployedpeoplecreated from positions in stores, to roles for buyers, byTescoUKRegeneration accountants and lawyers. This year, we Partnerships created 21,000 new jobs across the Group.

21,000
Newjobscreatedthisyear acrosstheGroup

667

2,000
TescoRetailSkills Apprenticeships intheUKthisyear

6.2%
Peoplebeingtrained forahigherleveljob

Manyofourstaffstaywithusforalongtime.Oftentheyrise fromtheshopfloortorunthestorestheyworkin,ormoveto otherjobswithinthebusiness,gainingvaluableprofessionaland leadershipskillsalongtheway.OurnewGroupCEO,PhilipClarke, isanexample:hisfirstjobasaschoolboywasworkingpart-time atTesco. Our People Promises WewantouremployeestofeelthatTescoisagoodplacetobe, thatitbelongstousallandthattheirworkisvalued.Weaimto ensurethatouremployees:  aretreatedwithrespect;  haveanopportunitytogeton;  haveamanagerwhohelpsthem;and  haveaninterestingjob. Althoughourdiverseinternationalmarketsrequiredifferent employeeprogrammes,thesePeoplePromisesensurewetreatour peoplefairly,nomatterwheretheyareintheworld. Tescoiscommittedtoupholdingbasichumanrightsandsupports infulltheUnitedNationsUniversalDeclarationofHumanRights andtheInternationalLabourOrganizationCoreConventions.

70%
Increaseinfemaledirectors overthelastfouryears

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Overview

OURPEOPLEPROMISES

Responsibletrading Environment

REWARdS And BEnEFiTS


Pay Competitive,simpleandsustainablestaffrewardshelptobuild trustandloyaltyamongstouremployeesandassistwithhiringand retention.Allourstaffmovetohigherratesofpaywithinayearof joiningourbusiness,includinginthefewmarketswherewepay minimumwageatentrylevel. Weinvestheavilyinpay:forexample,ourhourlyrateofpayfora customerassistantintheUKisaround7%higherthanourthree largestfoodretailcompetitors.IntheUK,weincreasedpayfor under-18stomatchadultpayinSeptember2010.Forthoseaged 16or17,thisis87%higherthantheminimumwage. Inmanydevelopingmarkets,staffplacemostvalueongoodbasic payandonbeingpaidfairlyforovertime,ratherthanonadditional benefits.InbothChinaandTurkey,weworkonaverysimple frameworkwitheverythingpaidinbasepay(ratherthanthrough benefits)becausethatiswhatouremployeeswant.Thismakes uscompetitiveinthesemarkets,especiallyatentrylevel.

UKONLINEFLExIBLEWORKING

Thisyear,weinstalledanonlineovertimebookingsysteminall ourstoresintheUK,followingasuccessfultrialof21storesin London.Thefullyautomatedsystemallowsstafftoworktheir overtimeflexiblyacrossanumberofstores.Stafflogonto thesystemandkeyinthedetailsofwhentheyareavailable towork.Whenastoreneedsextrastaff,thoseavailableget atextmessageandcanthendecideiftheywanttheworkor not.WearetheonlyretailerintheUKtohavesuchaflexible onlinesystem.

Health Community

OutsidetheUK,asourbusinessgrowsweaimtopayourstaff betweenthemedianandtheupperquartilecomparedtoour competitors.Wehaveagreedlong-termrewardplansacrossall ourmarketssothatwehaveaclearplanonhowwewillinvestin payanddevelopbenefitsineachmarket. Insomemarketswefaceparticularchallenges.Forexample,in Thailand,part-timeworkisreservedforstudentsonly.Thismakesit difficultforustomeetthepeaksandtroughsoftrade,andrestricts ourabilitytoofferflexibleworking,aswedoinothermarkets.We areworkingwiththeThaigovernmenttoseeifthereisasolution thatcanopenuppart-timeworkforthosewhoareinterested.

Competitive, simple and sustainable staff rewards help to build trust and loyalty amongst our employees.

People Governance

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At Fresh & Easy were more friendly than other grocery stores and we have more fun with customers.
Benefits Weofferawiderangeofcompetitivebenefitsinlinewithlabour lawsandregulations,reflectingwhatemployeesvaluemost.These varyfrompayingatleast75%ofthecostofmedical,prescription drug,dentalandvisioncoverageafter90daysemploymentinthe US,toatuitionsubsidyforthechildrenofstaffinSouthKorea.In 2011/12,wewilllaunchamedicalbenefitinThailand. InMalaysiaandThailand,weknowthatourpeoplevaluethestaff TescoClubcard,whichenablesthemtoreceivegreaterrewards thancustomers.Therateofuptakeofthecardis85%and91% respectively.WealsohaveastaffClubcardschemeinChina, andareplanningtolaunchanotherinSouthKoreain2011/12. Allourmanagementteamsshareinthesuccessofthebusiness theyaregrowing,throughbonusschemeslinkedtoprofitability anddeliveryoftheirSteeringWheelobjectives(seepage7).Inthe UK,weawarded105.5millionoffreesharesto216,000staffin 2010throughourSharesInSuccessscheme. Aswellasfinancialbenefits,wealsoprovidearangeofother benefitsappropriatetoeachmarket.Theseincludejobsharing, flexitime,part-timeworkingandmaternityleave. Pensions Thetypeandlevelofpensionweofferineachmarketisinfluenced bytheneedsofourbusinesses,thevalueourstaffplaceon pensions,andstateprovisionandlegislation. IntheUK,weofferanaward-winningdefinedbenefitschemethat providespensionatretirementbasedonanemployeesservice andcareeraverageearnings.Around90%ofstaffsaythattheir pensionisanimportantinfluenceonhowlongtheystaywith thebusiness.

PROFILE:JOHNNELLGREGORy,DISTRICTMANAGER, FRESH&EASy,US

JohnnelljoinedFresh&Easyasateamleaderin2007,justafter thefirstUSstoreopened.Sheleftanofficejobtogobackinto retailasshesaystheopportunitiestogrowwithF&E,anew playerintheUS,wereapparentfromthestart.Inlessthan ayear,shewasmanagingherfirststoreandin2010shewas promotedtoDistrictManager. Itsbeenarollercoasterridebutagoodfunonetogeton. Weremorefriendlythanothergrocerystoresandwehave morefunwithcustomers,saysJohnnell.Iloveitwhenour CEOcomesinthestoreinjeansandanF&Et-shirtandstarts baggingthegroceriesandtalkingtocustomers.Ialsoloveour bigsocialprogramme.Schoolshavetoldusthatthemoneywe raisethroughShopforSchools(seepage46)ishelpingsave teachersjobs.IhavethreekidsanditshugeformethatIwork foracompanythatdoesthat.

90%
ofstaffintheUKsaythattheirpensionis animportantinfluenceonhowlongthey staywiththebusiness.

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Overview

75%
IntheUS,wepayatleast75%ofthe costofmedical,prescriptiondrug, dentalandvisioncoverageafter90days employment.

Responsibletrading

TRAininG And dEvElOPmEnT


Weinvestheavilyintraininganddevelopmentsoourpeople haveanopportunitytogeton.Weofferawidevarietyoftraining options,andwemakeourtrainingasflexibleaspossible. UK apprenticeships IntheUK,westartedan18-monthapprenticeshipprogrammein 2009,includingaLevel3NVQandDukeofEdinburghGoldAward. Thisprogrammeallowsschoolleaverstocombineon-the-job trainingwithnationallyrecognisedexternalqualifications.

Growing our leadership team OurOptionsprogrammeallowsstafftodeveloptherangeof skillsrequiredtotakeonamoreseniorrole.Acrossthebusiness, 6.2%ofstaffarebeingtrainedfortheirnextjob. Ourgraduateprogrammesupportsgraduatetraineeswithhigh potentialfromacrosstheinternationalbusiness.Developingmore leadersineachmarketremainsakeychallengeandweneedto makesurewebuildonourworkandsuccesstodate.OurChina GraduateProgrammehasbeenparticularlysuccessful(seebox).

Environment Health Community People

ThisyearwemorethandoubledthenumberofplacesonourLevel OurAdvancedLeadershipProgrammetrainspeopletomove fromtheDirectortoSeniorDirectorlevel. 2RetailSkillsApprenticeshipprogramme,bringingthetotalto 2,000.In2011/12,weaimtoincreasethenumberofplacesoffered throughthisschemeto2,500.Wehavealsolaunchedanew PROFILE:LEONSUN,CATEGORyMANAGER,CHINA apprenticeshipprogrammeforbakeryandcounters. LeonjoinedtheChinaGraduateProgrammeinitssecondyear in2007,havingworkedasateamleaderataTescostorein Practical experience on the shop floor Manchester.Leonsays:ItwasthepeopleatTescoandtheir Inmanyofourmarkets,toensurethatofficestaffremainintouch valuesthatfirstdrewmetotheTescograduateprogramme, withstores,theyparticipateinourannualTWISTprogramme combinedwiththeopportunitiesforgraduatesgoingback (TescoWeekInStoreTogether),gettingdirectexperienceofthe shopfloor.Atpeakshoppingperiodsintheyear,officestaffprovide intotheChinesemarket.Afterninemonthsoftraininginthe UKcommercialdepartment,LeonmovedbacktoChinaand HelpingHandsandgointostorestosupporttheircolleagues. beganworkasacommercialbuyerforfrozenfoods.Hehasnow Thisyear,welaunchedHelpingHandsandTWISTinChina. progressedtobecomeCategoryManagerforMeatandPoultry. degree programmes DuringhistimewithTesco,Leonhasfulfilledmanyrolesashe Wehavelinkswithanumberofuniversitiestoprovidetrainingfor learnsthebusiness,butalwayswiththesupportofseniorlevel ouremployees,suchasaspecialmanagementprogrammewith sponsors,bothinChinaandintheUK.Ihaveneededtoadapt theinternationalbusinessschoolINSEAD.ThisyearinTurkey,we quicklytonewrolesandchallenges,butIveenjoyedlotsof welcomedthefirstintakefromourgraduateRetailProgramme, varietyacrossproductcategoriesandbusinessfunctions, deliveredincollaborationwithIzmirUniversityofEconomics.The hesays.Iseenolimittotheopportunitiesahead. schemeguaranteesthegraduatesajobwithTescoKipasolong astheysuccessfullycompletetheirvocationaltrainingwithus. Unemploymentamongyoungpeopleisasignificantproblemin Turkey,sotheguaranteedjobattheendoftheprogrammeisa verypositiveincentive. WealsorunFoundationDegreesforourstaffintheUKandIreland. Thesetwo-yearretaildegreesarepaidforbyTescoandtakenin associationwithManchesterMetropolitanUniversity.Since2007:  56staffmembershavegraduatedfromthecourseandafurther 52arecompletingtheirdegrees;  66%ofgraduateshaveprogressedtoahighermanagerialrole; and  twostudentshaveprogressedfromteamleaderrolesinstores tobecomingamemberofthestoresmanagementteam.

Governance

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Tesco Academy AspartofourcommitmenttodevelopingtalentinAsia,wewill openanacademynearIncheon,SouthKorea,inJuly2011.Asiais oneofthefastest-growingareasforthebusiness,andwewillneed manymoreleadersoverthecomingyears.TheTescoAcademy willbeacentreofexcellencetotrain,sharelearninganddevelop networksforallourdirectorsandmanagers.Theacademywillalso beazero-carbonbuilding(seepage26).Weareconsideringsimilar opportunitiesinEurope. Talent development Weareproudthateveryonehastheopportunitytogetonin Tesco.Allourcolleagueshavediscussionsabouttheircareersand performance,andallourleadershipteamstalkaboutsuccession plansandtalentpipelines,atleastonceayear.IntheUK,through ourOptionsandeducationprogrammes,itispossibletojoinus aged16withoutqualificationsandbeastoremanagerat23 withadegree. Formoreinformationseewww.tesco-careers.com.

COmmUniCATiOn
Employee feedback Communicationiscrucialifwearetounderstandandrespondto theconcernsofourstaff,earntheirtrustandincreasetheirloyalty toTesco.Wecommunicateregularlywithouremployeesthrough face-to-facebriefings,storeanddepotforums,staffquestion times,publicationsandourintranet. Ourannualstaffsurvey,Viewpoint,isanonymousandconfidential anditsresultsarefedintolocalactionplansatstore,depotand officelevel.In2010/11,over90%ofstaffparticipatedinthesurvey intheUK. Trade unions Allouremployeeshavetherighttojoinatradeunionandwe believeitisveryimportantthattheyareabletoexercisethisright. Wehaveanindustry-leadingpartnershipagreementwithUsdaw intheUK,andagreementswithKASZinHungaryandSolidarityin Poland.ThisyearalsosawthefirstmeetingofournewEuropean WorksCouncil,setuptoimprovecommunicationonemployee issuesacrossourEuropeanmarkets. Whistle-blowing Ourwhistle-blowingpolicyandhelplineisnowinallmarkets. ProtectorLineisa24-hourconfidentialtelephonelineandemail addressforemployeestoraiseethicalissuesandreportgrievances. TheAuditCommitteereviewsthenumberofcallsandquality ofinvestigationeveryyear,andreviewsplanstoensurestaff awarenessofthefacility.Thisyear,thenumberofcallsincreasedby 28%comparedto2009/10,showingthatemployeesarebecoming moreawareoftheservice,andmoreconfidentinusingit.

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Overview

in the UK, we have the most socially diverse customer base of any retailer and we want our workforce to reflect the communities we serve.
inClUSiOn
Weareproudtobeadiversebusiness.Withoutaninclusivepolicy, wewouldmissoutonsignificanttalentwithinthecommunity. IntheUKwehavethemostsociallydiversecustomerbaseof anyretailerandwewantourworkforcetoreflectthecommunities weserve. EveryoneismadetofeelwelcomeatTesco,regardlessofage,sex, disability,ethnicity,belieforsexualorientation.OurBoardworks hardtoimprovediversityacrosstheGroup,andthisiscentralto ourtalentplanningprocess.In2011/12,wewilllaunchanABC (African,BlackBritishandCaribbean)networkintheUK. Creating good jobs Webelieveincreatinggoodjobsatalllevels,whereverwearein theworld.Countrynationalsmakeup54%oftheBoardsofour overseasbusinesses.Weaimtohaveasmanycountrynationalsin seniorpositionsaspossible.
ASIANNETWORK

Responsibletrading

out at tesco
Environment

OutatTesco,ourLGBT(lesbian,gay,bisexualandtransgender) network,isamongthefastestgrowingintheUK.People performbetterandstaywithuslongerwhentheycanbe themselvesatworkandwehavecreatedanenvironmentwhere colleaguescanbeopenabouttheirsexualorientation.Formore informationseewww.outattesco.com. Women WeareproudthatTescoisabusinesswheresuccessdoesnot dependongender.Inthelastfouryears(since2006/7),the numberoffemaledirectorsatTescohasincreasedbynearly70%. Weareworkinghardtohelpwomensucceedinseniorrolesat Tesco.TherearethreewomenonourPLCBoard.Womenaccount for33%ofourdirectorsinMalaysia,27%inSlovakia,and19.3% acrosstheGroupasawhole,anincreaseon2009/10.Theyare wellrepresentedinourdevelopmentprogrammes,helpingmore womentoachievemanagementpositionsinthefuture.66%of participantsonourApprenticeshipinRetailprogrammearefemale. WomeninTesco,ourwomensnetwork,aimstohelpwomen acrossthebusinessprogressbyprovidingopportunitiesforskill development,mentoringandnetworking.Thisyear,webeganour firstWomeninLeadershipdevelopmentprogrammetoencourage talentedwomenintheUKtofulfiltheirpotentialandprogressinto moreseniorroles.Weareparticularlykeentopromotewomen incountrieswheretraditionallyveryfewwomenhaveheldsenior positions.InSouthKorea,weappointedourfirstfemaledirectorin 2009,andhavesincepromotedanotherfemaledirectorthrough ourOptionsprogramme.

Health

ManypeoplewhoworkforTescointheUKareofAsiandescent. However,inthepastmanyAsiancolleagueshaveleftusafter completingtheirstudies,andsomeofthemosttalenteddidnot considerretailatall. In2009,theAsianNetworkwasformedtodemonstratetoAsian colleaguesthataTescocareercanbeeverybitasrewardingas thetraditionalprofessions.Eachyear,thenetworkholdsaseries  ofregionalevents,attractingseveralhundredattendees.They areanopportunityfornetworking,mentoringandinformationsharing,andencourageAsiancolleaguesfromacrosstheUK businesstobuildtheirfuturewithTesco.

Community

AtTescointheUK,thereisonlya2%differenceinpaybetween no retirement age menandwomen.Anythinglessthan3%isdeemedstatistically ThoughthestatutoryUKretirementageisduetobeabolished insignificant. in2011,wealreadyemploypeopleintheir70sand80s.Many olderpeoplewishtoremaininworkorsemi-retirementandour customersvalueolderpeoplesexperience.IntheUK,weinclude peopleofallagesinourapprenticeship,A-Levelandgraduate programmes,givingthemtheopportunitytodeveloptheircareers. Wecomplywithmandatoryretirementagesincountrieswhere theyexist.

People Governance

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We will continue to find ways to develop our capabilities and offer our colleagues an opportunity to get on.

People with disabilities IntheUK,wehaveestablishedastrongrelationshipwithRemploy andShawTrust,whohelpusfindskilledanddedicatedpeoplewith disabilitiestoworkwithus.InHungary,wehaveaprogrammeto attractdisabledpeopletoworkinstores.Wealsoprovideawork experienceprogrammefordisabledchildrenthroughtheBritish mobilitycharity,Whizz-Kidz. Other groups ThroughourRegenerationPartnershipstores(seepage43), weguaranteeasignificantproportionofjobsforlong-term unemployedpeople.Thisisinadditiontotheworkwedotoattract applicationsthroughJobcentrePlustoallourUKstores.IntheUK, wearealsoworkingwiththeprisonservicetosupportex-offenders intowork. Weworktoprovidejobsforex-servicepersonnel,whooftenhave exceptionaltransferableskillssuchasleadership,anabilitytocope underpressure,andanunderstandingofworkinginalarge-scale organisation.  IntheUKwehaverecruited24peopletothebusinessthisyear throughourJobsforHeroesscheme.  IntheUSwehaveexpandedourVeteranProgrammeatthe RiversideDistributionCentre.

HEAlTH And SAFETy


Itisvitalthatwelookafterourstaffandcustomersbymaking suretheyhaveasafeplacetoworkandshop.LucyNeville-Rolfe, ExecutiveDirector(Corporate&LegalAffairs)isalsothedesignated Directorforhealthandsafety.WehaveadoptedthejointHealth andSafetyExecutiveandInstituteofDirectorsguidance,Leading HealthandSafetyatWork,whichinformsourUKandinternational policiesandprocedures. Wemeasuretherateofinjuriessufferedbyourpeopleandthe customerswhovisitourstores,andalsocarryoutindependent auditsofourstoresanddepots.IntheUKeverystorehasan unannouncedvisiteverysixmonthstoensurecompliancewith ourhealthandsafetypolicy. OurTechnicalandTradingLawteamshavesafetyprofessionalsin everymarket.Reportableaccidentratesarereportedeachquarter totheComplianceCommitteeandannuallytotheExecutive Committee.Ourstoresmeasuretheirownperformancethrough thestoreSteeringWheel(seepage7),whichhastargetsfor reducinginjuryrates,deliveringtrainingandraisingawareness. In2010/11,wesawa6.3%reductionintherateofreportable accidentsacrosstheGroup. Raising awareness Werunregularsafetycommunicationsandactivitiesinstoresand depotstoraiseawarenessofhealthandsafetyissues.  InPolandthisyearwelaunchedacontesttofindthesafest stores,engagingstafftoimprovesafetyandhygienestandards. Thejudgeslookedatthenumberofaccident-freedaysand activitiesinstoresaimedatpreventingaccidents.  InThailand,wehaveaverysuccessfulsafetybehaviour programme,whichhasreducedaccidentsby9.1%since2009.  IntheUKandIreland,werunthreesafetycampaignsayear, includingSafetyAwardstofindthemostinnovativewaysofraising healthandsafetyawarenessinstores.Thisyear,wealsoranafire safetyprogrammeacrossstoresintheUKandIreland.

6.3%
reductionintherateofreportable accidentsacrosstheGroupin2010/11.

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Overview

PROGRESS On SElECTEd 2010/11 PRiORiTiES Hungary South Korea


Extendprogrammetoemploymoredisabledpeopleandlaunch equalopportunitiesanddiversityprogramme BuildanAcademytotrainanddevelopourmanagersanddirectors Achieved we now employ over 500 disabled people in Hungary Partially achieved the Academy will open in July 2011
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Governance

Key Performance indicators


Community Promise Buying and selling our products responsibly How did we do?
Supplier Viewpoint: average score (% of scores that are positive)

Performance 2008/9
68%

Performance 2009/10

nEW

80%

Supplier Viewpoint: response rate of suppliers

37%

nEW

51%

Caring for the environment

Reduce CO2e emissions from our 2006/7 baseline portfolio of stores and distribution centres by 50% by 2020. Annual target reported as percentage reduction against previous year Reduce CO2e emissions from new stores and distribution centres built after 2006 by 50% by 2020, compared to new stores and distribution centres built in 2006 Reduce the amount of CO2 used in our distribution network to deliver a case of goods by 50% by 2012, compared to 2006. Annual target reported as percentage reduction against previous year

7%

7.8%

Environmental format developed 20.5% reduction vs. 2006 9.2% (UK)

28.8%

6.4%

Providing customers with healthy choices Actively supporting local communities

Staff and customers active with Tesco

4.7m people

nEW

6.2m people

Staff and customer fundraising

8.2m

7.4m

Donate at least 1% of pre-tax profits to charities and good causes

1.9%

1.94%

Creating good jobs and careers

Staff being trained for their next job

1 in 30 (UK)

nEW

6%

TescoPLCCorporate Responsibility Report 2011

58

Overview

KeyPerformanceIndicators(KPIs)areanimportantwaytomonitor howsuccessfulweareinmeetingourcorporateresponsibility targetseachyear.Wesettargetsforeachofthefiveobjectives intheCommunitysegmentoftheSteeringWheel,foreachof the13marketsinwhichweoperatestores.Formoreonhowthe SteeringWheeldrivesourbehaviourandperformance,andhow theCommunitysegmentencapsulatesourcorporateresponsibility strategy,seepage6.

The KPis below are those on which we report as a Group. Each market also has its own Community-related projects and KPis, reflecting local priorities. For more information on these projects, and our 2011/12 KPis, see www.tescoplc.com/ countries.

Responsibletrading

Performance 2010/11 82%

Comment
Environment We exceeded our target of 80% positive responses.

54%

Despite strong performance in China and South Korea, we missed our target of a 60% response rate from suppliers.

7.7%

We have exceeded our target of a 5.5% reduction, helped by strong performance in Hungary, South Korea and the UK. Health

28.8%

Despite good performance in Hungary, Malaysia and the UK, we have missed our target of a 30% reduction. In some markets this was due to high summer and low winter temperatures. In others, we still have work to do on fridge gas leakage.

7.4%

Despite good performance in the Czech Republic, UK and US, we have missed our overall target of a 10% reduction.

Over 7m people 10.0m

We exceeded our target of getting seven million people active, with strong performance across our markets. In Thailand alone, we helped get 4.2 million people active.

Community

We exceeded our target of 7 million, with strong performance in the majority of our markets. In addition, we helped charities raise money through in-store collections.

1.8%

We exceeded our target of 1%, contributing 64.3 million to charities and good causes through direct donations, cause-related marketing, gifts in kind, staff time and management costs. In addition, we donated 50,000 in March 2011 to aid humanitarian efforts in Japan. People Despite strong performance across many of our markets, we missed our target of 7% of staff being trained for their next job.

6.2%

Governance

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TescoPLCCorporate Responsibility Report 2011

Governance

Priorities for 2011/12

Everyyear,wedefineCommunity-relatedprojectsforeachofthe13marketsinwhichweoperatestores,reflectingourCommunity Promisesandlocalpriorities.Belowisaselectionofinitiativesfor2011/12fromacrosstheGroup.
Buying and selling our products responsibly Set up a Skills Academy in Bangladesh. Develop action plans for sustainable supply chains in key commodities. Source all our palm oil and derivatives for the UK from an RSPOcertified system by 2012. Develop a fisheries evaluation system with the Sustainable Fisheries Partnership in the UK. Work with produce and clothing teams in the UK to develop water stewardship strategies. Caring for the environment Openazero-carbonstoreinThailandandazero-carbonAcademy inSouthKorea. InstallsolarpanelsontenofourstoresinArizona. LaunchgreenClubcardpointsinChina,HungaryandTurkey. GrowoursupplierKnowledgeHubto300members. Agreecarbonreductionplansforfivesectorsinoursupplychain. Providing customers with healthy choices Work with the Chinese Government and suppliers in China to share knowledge on food safety. Roll out 5-a-day labelling in China. Participate in the first central London Community Alcohol Partnership. Make Race for Life 2011 the biggest Race for Life yet. Get a further 18,000 schoolchildren active through the Tesco Bank Football Challenge. Launch eParan Youth Football Club in South Korea. Actively supporting local communities Pilot a new schools programme in two towns in Turkey. Extend Community Champions in Hungary to one city per county. Strengthen the online Schools of Extended Education network in South Korea. Creating good jobs and careers Offer 2,500 apprenticeship positions in the UK. Develop the Women in Leadership programme in the UK. Develop more ways, places and content to learn through our Academy. Introduce a staff Clubcard scheme in China. Set up an ABC (African, Black British and Caribbean) network in the UK. Develop an employee engagement measure across the Group. Continue our scheme for retired colleagues to become business coaches.

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Overview

managing corporate responsibility


WhilewemanageourCommunityinitiativesthroughtheSteering Wheel,ultimateresponsibilityforcorporateresponsibilityat TescorestswiththeBoard.LucyNeville-Rolfe,ExecutiveDirector (Corporate&LegalAffairs),isaccountableforourperformance inthisarea,andsitsontheBoard.ShealsochairsourCorporate ResponsibilityCommittee,whichismadeupof15seniorexecutives fromacrosstheGroup.TheCommitteemeetsatleastfourtimes ayeartosupport,developandmonitorpoliciesoncorporate responsibilityissues,andtoreviewrisksandopportunitiesfor theGroup. TheBoardsetsourGroupKeyPerformanceIndicators(KPIs) (seepages58-59),whichweusetotrackperformanceacross theGroup.Eachmarketalsohasitsowncorporateresponsibility targets.Formoreinformationonthesetargetsandprogress againstthem,seewww.tescoplc.com/countries. The Tesco Corporate Responsibility Committee Forthisreportingyear,theCorporateResponsibilityCommittee wasmadeupof15seniorexecutivesfromacrosstheGroup:  lucy neville-Rolfe (Chair)ExecutiveDirector (Corporate&LegalAffairs)   arney BurgessChiefOperatingOfficer(Grocery),Tesco.com B   ari danielsDirectorofBrandandTradeMarketing K   revor datsonGroupMediaDirector T  michael FletcherCommercialDirector,GroupCorporate  Purchasing  Ruth GirardetUKCorporateResponsibilityand  CommunitiesDirector

Responsibletrading Environment Health

  atherine GlickmanTalentDevelopmentDirector C AllnewseniordirectorsreceivedetailedtrainingontheCommunity Planaspartoftheirinduction,andnon-financialKPIsareincluded  liz KynochGroupTechnical&TradingLawDirector withintheremunerationcriteriaofBoardDirectors.Formore   lex laffeyDistributionNetworkDevelopmentDirector A informationseepage74ofour2010/11AnnualReport.   revor mastersCEO,CentralandEasternEurope T
code of business conduct

In2009,welaunchedourGroupCodeofBusinessConduct,which hasbeenrolledouttoallemployeesacrosstheGroupandgives clearguidanceonthestandardsofbehaviourexpected.Inaddition totheSteeringWheel,theCodeofBusinessConductisakeyvehicle forthecommunicationofstandardsacrosstheGroup.Formore informationseewww.tescoplc.com/code.

  ndrew nealeHeadofFacilities A   avid northUKCorporateAffairsDirector d   reg SageInternationalandInternalCommunicationsDirector G   imon WilliamsInternationalPropertyDirectorforAcquisitions, S AssetsandEstates   anbin ZhuangVice-PresidentCorporateAffairs,TescoChina n WehaverecentlychangedtheCorporateResponsibilityCommittee toreflectournewcorporatestructure,andtostrengthen representationfromAsia,EuropeandtheUS.Formoreinformation onthenewCommittee,seewww.tescoplc.com/crcommittee.

Community People Governance

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TescoPLCCorporate Responsibility Report 2011

Governance

How we listen to improve our strategy


Our work is only effective if it addresses the long-term needs of our customers and society. The table opposite summarises how we interact with each of our stakeholder groups throughout the year and what they are concerned about.
EachyearForumfortheFutureandotherkeystakeholdersassess ourcorporateresponsibilityreportingandgiveustheirviews. Followinglastyearsreport,stakeholderssaidtheywantedto seemoreinformationonsomekeyissues.  Improvingsupplychainwagesinlow-incomecountries seeourTradingFairlymodelonpage13tolearnaboutourwork withsuppliers.  Engagingemployeesmorewithcommunityandenvironmental initiativestherearenumerousexamplesinthisreportofhowour employeesareinvolved.  Takingafirmerandmoreproactivestanceonmakinghealth improvementstoexistingproductrangesseetheworkwehave doneinthisareainthechapteronProvidingcustomerswith healthychoices.  Planningforwidersustainabilitybeyondcarbonexamplesof ourworkinthisareacanbefoundinthechapteronBuyingand sellingourproductsresponsibly.  Firmeractiononwaterandthelong-termsustainabilityoffish stocksseeournewworkonwateronpage18andournew commitmentsonthesustainablesourcingofseafoodonpage16.  Newretailbusinessmodelstomeettheneedsofcustomers andcommunitieswhilerespectingenvironmentallimitsseehow weareencouragingcustomerstobegreenerinthechapteron Caringfortheenvironment. FormoreinformationonForumfortheFuturesviewofour strategy,seetheinsidebackcoverofthisreport.

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Overview Responsibletrading

Stakeholder group and how we interact


Customers: Regular Customer Question Time (CQT) in our stores, and qualitative market research in all markets.

What they want and are concerned about


Products that are safe, legal and that support their lifestyles. Value in difficult economic times. Information about where their products come from.

Environment

Investors: Meetings and formal presentations throughout the year. Dedicated investor relations website and ongoing feedback session including with Socially Responsible Investors (SRIs).

Detail on the costs and payback benefits of carbon reduction and other environmental initiatives. Information on our international operations and global targets.
Health

Detail on how we manage corporate responsibility in the business day-to-day, to anticipate and manage risks. The opportunity to get on at work, an interesting and secure job, to be treated with respect, good pay and benefits, flexibility, support in difficult times, and a manager who helps them. Tesco to provide good jobs and investment. Care of the local environment around our stores. Support and funding for local causes.

Employees: Constant feedback through ongoing staff appraisals, Staff Question Time (SQT), annual Viewpoint and Pulse surveys. Communities: Regular engagement in stores and at public consultations and exhibitions, notice boards, leaflets, focus groups, work with charities and community groups as well as through store-based Community Champions and Community Fairs. Suppliers: Regular meetings and collaboration with suppliers, processors and manufacturers, Producer Clubs, annual Supplier Viewpoint survey, leading-edge knowledge groups, training for suppliers e.g. through Tesco Link website.

Community

A fair deal, and to be paid on time. Stable, long-term relationships with us, and opportunities for growth. Rewards for good environmental and fair trade performance, and support for primary producers impacted by climate change. Help informing customers about where their products come from.

People

Governments and regulators: Wide range of engagement in all markets on all relevant issues: environment, ethical trading, food safety and sourcing, wages and benefits, skills, regeneration planning, health and nutrition. Non-governmental organisations (NGOs): Ongoing engagement through meetings, consultations, research and surveys.

Tescos support to implement relevant policies. Guidance to help create fair and reasonable regulation. Ideas for new projects and case studies of successful ones.
Tesco to take a leadership role on wider sustainability and ethical trade issues. Details on the sustainability of commodities, such as palm oil, water or soy.

Governance

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TescoPLCCorporate Responsibility Report 2011

Governance

Awards

This year, Tesco has been included in key responsible investment indices, and received some prestigious awards for our corporate responsibility strategy and performance:

Wehavealsowonawardsforspecificenvironmentaland communityinitiatives,including: China  EmployeesMostFavouredCompany(RetailIndustry)  BestPracticeAwardforCorporateSocialResponsibility Hungary  nnovationAward(solarpowerinitiative),Hungarian I InnovationFoundation  KarrierStartTop30(graduateemployers),Figyel  andHewitt HumanTanacsadoKft

TescohasbeenamemberoftheFTSE4GoodIndex,aresponsible investmentindex,since2001.Thisyear,weachievedtheexcellent scoreof97outof100intheIndex,andthehighestpossiblescore forourclimatechangeactivities.

ireland  BestPracticeAward(storerecycling),RepakRecyclingAwards Poland  InvestorinHumanCapital,GoodEmployerAwards   SRAward(TescoforKids),GazetaFinansowa C  MostEnvironmentallyFriendlyCompany2010,National  EnvironmentalContestundertheauspicesofthePresident ofPoland South Korea   lobalGreenManagementExcellenceAwards,Ministry G ofEnvironmentandMinistryofEconomy   airtradeEnterpriseAward,FairtradeCommissionRepublic F ofKorea

TescohasbeenamemberoftheDowJonesSustainabilityIndex, aresponsibleinvestmentindex,since2008.Weachieveda particularlyhighscoreforourenvironmentalcommitment andactivities.

 HRDManagementAward,KoreanHumanResource   DevelopmentAssociation TescowasnamedthetopretailerintheCarbonDisclosureProjects  KoreaEthicalManagementGrandPrix,NewIndustry  2010UKFTSE350andGlobal500reportsforcarbonreporting ManagementAcademy andperformance. Turkey  BestHumanResourcesProject(partnershipwithIzmirUniversity  ofEconomics),RetailSunAwards

2011  TescohasheldPlatinumstatusintheBusinessintheCommunity CorporateResponsibilityIndexsince2007.

UK  RegenerationAward(BirminghamSpringHilldevelopment),  GreenAppleAwards  BestEnergyReductionProgramme(energyboards),  PlattsGlobalEnergyAwards  BestEnergyReductionProjectoftheyear(energyboards),  EnergyEvent2010   estOverallPerformanceinFosteringEmployeeShare B Ownership,ifsProshareAnnualAwards

Formoreinformationonawardsandpartnerships,see www.tescoplc.com/awards.
TescoPLCCorporate Responsibility Report 2011 64

overview

A view from Forum for the Future


tesco has continued to strengthen its community plans both in the uK and internationally and this is increasingly being done in partnership, with customers, suppliers, ngos and other businesses. to support this approach and help tesco work through the sustainability challenges it faces, we facilitated a series of stakeholder sessions. there was praise for many of tescos initiatives, in particular the leadership shown in tackling climate change. at the same time, stakeholders highlighted issues on which they thought the business should do more. the first was to be more upfront about the commercial as well as the moral case for investing in corporate responsibility. By doing this, they argued, tesco could clearly demonstrate the bottom-line benefits and use its position as a market leader to influence the wider business and investment community. the second was health, where despite praise for initiatives such as the strong public position on alcohol, there were calls for tesco to play a bigger health-promotion role. the retailer could influence the quality and quantity of food that customers consume by more promotion of healthy options, by stronger education on diets and lifestyles, and by shifting the entire range of products it sells in a healthier direction. the third area of challenge was on the sustainability and resilience of tescos supply chain in the face of resource shortages and increasing pressures on the natural environment. While great work has been done on measuring and reducing carbon, there are a set of wider sustainable sourcing issues in particular water to be tackled. looking ahead, we urge tesco to accelerate its transition from being a business with a strong sustainability strategy to being a business whose whole strategy is sustainable and fit for the demands of the 21st century.
WHat is foruM for tHe future?

responsible trading environment

forum for the future is a non-profit organisation working globally with business and government to create a sustainable future. forum for the future is not an auditor or a verifier and these comments should not be read as verification of data or information contained within the report. for more information, see www.forumforthefuture.org. tesco is one of forum for the futures corporate partners, and makes a direct financial contribution to the forum. last year the forums income from tesco represented less than 2% of its turnover. the partnership is currently in its tenth year.

Health community

Peter Madden Chief Executive

people governance

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