Memorandum by Tesco
1. ABOUT TESCO1.1 Tesco
is one of the world's leading international retailers, employing
over 450,000 people globally. We recognise the importance of addressing
the challenge posed by waste and are committed to playing a leading
role in responding to the challenge.
1.2 We have consistently been at the forefront
of sustainable development within the retail sector across all
areas of our business and have demonstrated a clear commitment
to overcoming environmental challenges.
1.3 Across our business, internationally
as well as in the UK, we are responding to the challenges posed
by waste. We recognise that in order to grow our business in a
sustainable way we must continue to address both the challenges
and opportunities presented by the waste we generate. Waste is
an increasing cost but also a resource.
1.4 Our policy is to use the waste hierarchy
to deliver change—through waste minimisation, reuse and
recycling. Disposal is viewed as the last resort. To ensure effective
engagement across our business we have put waste at the heart
of the Tesco Community Plan, with the result that each individual
store measures and reports progress towards individual waste reduction
targets.
1.5 As a result, in 2006-07 we recycled
71 per cent of the waste generated in our stores and distribution
depots, including over 80 per cent of our paper, cardboard and
plastic. We also have a long term commitment to divert 80 per
cent of our operational waste from landfill which we are making
progress towards. In 2007-08 our goal is to divert 75 per cent
of waste from landfill.
1.6 We report annually on our progress in
reducing waste and increasing recycling through our Corporate
Responsibility Review and website. However, in order to ensure
that waste reduction remains a prominent business priority, we
have committed to achieving the following public targets:
— To reduce the amount of packaging
on both branded and Tesco own-label products by 25 per cent by
2010.
— To label all our own-label packaging
according to whether it can be reused, recycled or composted by
the end of 2008.
— To increase the proportion of waste
from our own operations that we recycle from 71 per cent in 2006
to 80 per cent in 2009.
— To double customer recycling at sites
where we introduce automated recycling units from 2006 levels
by 2008.
— To cut the number of carrier bags
given out by 25 per cent by May 2008 compared to May 2006.
1.7 As a signatory to the UK Government's
2005 Courtauld Commitment, we are also committed to helping WRAP
achieve the following three targets:
1.8 We were also the first retailer to sign
up to the Government voluntary code on carrier bags, committing
to reduce usage by 25 per cent by 2008.
2. CONSUMER ATTITUDES
2.1 We recognise that we have an important
role to play in helping consumers reduce their own waste.
2.2 Consumer concern at excess waste is
strong and growing. This is focusing the minds of retailers and
manufacturers and encouraging a high degree of competitive innovation.
2.3 When exploring in more detail consumer
views on environmental issues, waste and packaging consistently
come towards the top of their priority list. 71 per cent of UK
customers are concerned about the implications of packaging on
the environment and 61 per cent claim to have difficulty in finding
products that are not over-packaged.
2.4 Recycling is a key issue for most customers.
It is an area where people feel that they are able to do more.
It also has a high public profile with attention from local authorities,
interest from media and green initiatives in schools, homes and
workplaces.
2.5 The majority of people are focused on
waste reduction rather than on overall packaging sustainability.
Customers often perceive recycling and packaging reduction as
positive actions to achieve waste reductions. This is rarely linked
directly to the challenge of combating climate change.
2.6 Packaging is becoming an increasingly
important factor in making purchasing decisions as customers begin
to link the issue of waste with their decisions at the point of
sale.
2.7 Key areas of concern for customers include:
— Education: Over 50 per cent of customers
feel they do not know enough about packaging and its impact on
the environment.
— Recyclability: Customers are confused
about what they can and cannot recycle. In particular they dislike
plastics, which they perceive to be the least recyclable and sustainable
material.
— Over-packaging: Customers do not
like unnecessary packaging which they feel is wasteful, both in
terms of cost and impact on the environment.
— Labelling: Consumers are confused
by the variety of different packaging symbols used.
— Collection facilities: People are
frustrated by the lack of collection facilities for plastics and
mixed materials and would like Local Authorities to recycle more
plastic packaging than just bottles.
3. BARRIERS PREVENTING
CONSUMERS FROM
DOING MORE
3.1 Consumer research shows that customers
want to do more to protect the environment. However, there are
a number of barriers preventing them from changing their behaviour.
These include:
— the feeling that doing more to reduce
waste will make life more complex or more expensive, whether in
terms of the price paid at the checkout or council tax;
— a lack of clear consistent information
about what to do, what can be recycled, where packaging can be
recycled etc; and
— a concern that individual actions
will not make a difference.
3.2 Our research also tells us that consumers
expect Tesco and other businesses to make it easier and more affordable
for them to help the environment by selling products with less
packaging, making greater use of reuseable packaging and providing
opportunities to recycle more waste where it cannot be reduced
or prevented.
3.3 A central aim of work to achieve a sustainable
reduction in waste must be to break down the barriers that prevent
people from doing more. We are attempting to do this by providing
customers with the incentive, opportunity and information they
need to act.
3.4 Helping people overcome the feeling
that individual actions will not make a difference is a significant
opportunity. We need to help consumers understand just how much
can be achieved together and that if millions of people undertake
millions of small actions, the overall effect will be very large.
3.5 One example of positive consumer response
to incentives is the work we have done to reduce the number of
carrier bags in circulation as part of our pledge to reduce the
number of Tesco bags we give away by 25 per cent or 1 billion.
3.6 Every time customers reuse a bag to
take their shopping home from a Tesco store we reward customers
with one Green Clubcard[45]
point. The message is very simple: one point is received any time
any bag is reused. On collection of a sufficient number of points
customers receive vouchers every three months that can either
be spent at Tesco or converted into vouchers to spend elsewhere.
3.7 As a result of our Green Clubcard carrier
bag initiative we have already reduced the number of new bags
we have given away since the launch in August 2006 by 1 billion.
In addition to incentivising customers to change their own behaviour
initiatives like this also build confidence that individuals,
acting together, can bring about significant change.
4. COMMUNICATING
WITH CONSUMERS
4.1 Businesses come into direct contact
with millions of consumers on a daily basis. This gives business
a great opportunity to communicate directly with customers in
a variety of ways to help increase awareness and understanding
of sustainable lifestyles. Our research suggests that customers
will do more to reduce waste and recycle provided they have the
opportunity to do so.
4.2 As part of our goal to double the amount
of customer recycling at Tesco stores we have made front of store
recycling even easier with the introduction of market-leading
recycling facilities.
4.3 Our innovative automated recycling units,
introduced in 2006, sort plastic, metal and glass so our customers
do not have to. The automated units also shred and crush the material
collected so that more can be stored, reducing the frequency of
collections. The units are located in prominent positions and
are highly visible, well lit, brightly coloured and contain simple
instructions. Unlike traditional recycling units customers put
all their waste into a single inlet, as opposed to different types
of materials into different inlets, again ensuring the recycling
is simple for consumers. In addition to making recycling simpler
and more convenient the new automated units have enabled us to
reward customers with Green Clubcard points for recycling.
4.4 Progress to date is encouraging, demonstrating
that consumers will respond positively when presented with simple
solutions. Our first 27 units are on average collecting 7.69 tonnes
of recyclate a week, an increase of over 54 per cent traditional
units installed in Tesco car parks and 92 per cent higher than
the average local authority bring bank (which collects four tonnes
per week).
4.5 We have also recently produced twelve
million booklets entitled "Little Steps to being Greener"
and delivered them directly to customers' homes in the UK. The
booklet sets out hints and tips for consumers on how they can
become more environmentally friendly on a day to day basis and
compliments our ongoing communication on sustainability issues
via the Tesco.com website and the Tesco Magazine.
4.6 Our Greener Living website, launched
in October 2007, assists consumers by providing a glossary of
green terminology as well as offering advice and tips on ways
to reduce environmental impact at home, at work, for parents,
in the garden, and when travelling. This practical assistance
will help customers to understand more about green choices and
how to implement them in a simple and achievable way.
4.7 We have also increased customer information
on sustainability issues. On our website environment and climate
change sections are located on our homepage alongside our traditional
on-line shopping offer thereby maximising visibility for the three
million people who access our website every week. Tesco Magazine
helps customers understand what practical steps they can take
to living more sustainably. For example our October 2007 edition
features a 25 page section devoted to the issue of climate change,
including guidance on simple things customers can do to help combat
climate change and recycle more. The magazine is also now available
online.
5. BREAKING DOWN
THE INFORMATION
BARRIER
5.1 Businesses and consumers suffer from
a lack of clear information on sustainable waste reduction. For
action to promote sustainable consumption to be truly effective,
information on sustainability needs to be more widely available
and communicated simply so that consumers and businesses fully
understand how their decisions will impact the environment.
5.2 We believe that clear, consistent information
can act as an incentive for positive change. We know that given
this type of information consumers will make more sustainable
choices. We also believe that business and public authorities
working together with consistent messages can help deliver information
on sustainable consumption to help consumers understand the context
within which their decisions take place and understand the consequences
of their behaviour.
5.3 For this reason Tesco is providing £25
million in funding to establish a Sustainable Consumption Institute
at the University of Manchester in the UK. The Institute will
promote fresh thinking and explore vital areas of research such
as how customers can be empowered and incentivised to buy green
products and services, how business can adapt to meet customer
needs and how we can train the next generation of environmental
leaders and experts. Its research and conclusions will be shared
freely.
5.4 Drawing on expertise from all four of
the University's faculties, Manchester will lead and co-ordinate
a wide range of focused research programmes. The SCI will also
become a focal point for the next generation of researchers, policymakers
and advisers in the area of sustainable consumption through an
extensive postgraduate training programme.
5.5 Waste, recycling and packaging have
been included in the research themes that will guide the Strategic
Management Board in the prioritisation of expenditure on individual
research projects. Our aim is to evaluate, and consider the acceptability
of, new technologies and approaches to packaging with a view to
maximising recycling and minimising waste.
6. PRODUCT LABELLING
6.1 Customers tell us that lack of simple
information constitutes a barrier to sustainable waste reduction.
We believe that clear, consistent labels, based on universally
accepted and commonly understood principles have an important
role to play in overcoming this barrier.
6.2 Based on our experience over the past
20 years of developing simple nutritional labelling for products,
we believe that more effective recycling labelling can help boost
recycling rates. Customers believe that recycling is one area
where they can really make a difference. However, there is currently
a lot of confusion over what can and cannot be recycled. For example
in the UK only one in every four plastic bottles is recycled as
customers are confused over whether or not plastic can be recycled.
6.3 Just as in the case of carbon labelling
we are working in conjunction with other retailers and the Waste
and Resources Action Programme (WRAP) to develop a simple, consistent
labelling system to help customers understand which types of packaging
can be recycled and where. Our aim is to produce a simple set
of symbols that all retailers can use to let consumers know for
each component part of a product's packaging whether or not it
can be recycled and if so, where.
6.4 We aim for the first labelled products
to appear on our shelves in 2008 as a first step towards labelling
all Tesco own brand products with recycling information.
7. BETTER DESIGN
AND THE
USE OF
MATERIALS
7.1 Efficient and effective design can play
a major role minimising consumer waste, for example by reducing
the size and material content of particular products. It can also
identify ways of increasing the use of alternative materials that
are reusable, recyclable or derived from sustainable resources.
Better design can also impact on distribution and reduce waste
through the entire supply chain.
7.2 There are a number of factors that affect
the use of a particular material in packaging. These include:
— The type and quality of the product.
— Its durability (to ensure that it
is fit for purpose and appropriate for the distribution cycle).
— The shelf life of the product.
— Whether it can be reused, recycled,
or composted.
— Brand image and competition.
7.3 Our commercial categories are currently
engaged in a review of all packaging—primary, secondary
and tertiary—to improve design and meet our targets to reduce
primary packaging by 25 per cent by 2010. To help categories achieve
packaging reductions they are supported by Technical Managers
and a dedicated packaging team who co-ordinate progress across
categories and work to identify best practice solutions. The packaging
team also works closely with WRAP and our own recycling and carbon
footprint teams to develop innovative, eco-friendly and sustainable
packaging for next generation products.
7.4 Examples of some of the work that we
have already done to reduce packaging through improved design
and a better use of materials include:
— Transferring our beer, wine and spirits
glass bottles to best in class benchmarks, with the aim of reducing
our glass intake for this category by 13,000 tonnes.
— Packaging of all our electrical products
is currently being addressed in order to reduce it to minimal
levels with maximum recyclable content.
— We aim to source our paper content
from Forest Stewardship Council mills and maximise recycled content
as far as possible.
— Reductions of our plastic packaging
in our chilled category will deliver a saving of 3,700 tonnes
a year.
— Moving our Tesco branded detergent
to concentrate will reduce our plastic usage on bottles by five
hundred tonnes this year. We are now working with branded manufacturers
to encourage them to follow suit.
— We aim to introduce recyclable crates
in our produce category which we estimate will save 1,100 tonnes
of cardboard trays.
7.5 Tesco is clearly only one participant
in the packaging and recycling market and we are therefore keen
to work with other stakeholder groups to address this challenge.
7.6 We are particularly keen to work closely
with local authorities to achieve greater harmonisation between
materials collected by local authorities for recycling and the
materials used in product packaging. A more uniform local authority
approach linked with a greater convergence of packaging specifications
has as yet unexploited potential to achieve a closed loop system
in which retailer and manufacturer packaging and local authority
collection strategies are focused on the same range of materials,
simplifying recycling for consumers and stimulating more effective
recycling markets.
8. GOVERNMENT
POLICY
8.1 Given the level of voluntary progress
being made by industry in response to growing consumer concern,
we believe that government policy should focus on:
— incentivising further behavioural
change, encouraging industry and households to do more; and
— identifying and working to overcome
barriers which prevent people from doing more.
Specific areas of action might include:
Fiscal Incentives
Fiscal incentives for waste efficiency have
an important role to play. Landfill tax is set to continue to
rise at its pre-announced rates until 2009 and the cost of the
tax is being passed through to waste generators. This cost pass
through is already providing incentive for business to invest
to reduce the environmental impact of waste. We believe that the
government should consider utilising the additional revenue available
from landfill tax to support "green" projects such as
front of store recycling units and alternative landfill solutions.
We also believe that it would be beneficial for a scheme similar
to Landfill Allowances Trading to be introduced for retailers.
This would set clear targets on waste to landfill, providing fiscal
incentives for achieving and surpassing targets.
Funding Support
It is important to ensure that public funds
are available to incentivise and support research and development
work on waste technology to help better tackle the environmental
impact of waste. Funding support is also likely to facilitate
innovation and should be targeted at the most efficient operators
in the market. We would urge the Government to review the existing
guidelines on state aid to clarify in which cases state aid may
be granted to support waste, recycling and environmental protection
initiatives.
In particular we believe that recycling credits
have the potential to incentivise investment, provided that they
are made available by all local authorities. While recycling credits
are currently applied universally, a number of local authorities
(both county councils and district councils) are proving reluctant
to involve private sector operators in the awarding of credits.
This position could be eased by the Government
issuing clear guidance on recycling credits and their application
at a local authority level. Greater clarity would offer long-term
stability in terms of planning for businesses and facilitate business
commitment to long term investment in the provision of recycling
facilities.
Government can also play an important role in
encouraging greater recycling and reuse of waste. In this respect
Tesco supports Enhanced Capital Allowances for waste investment.
By allowing the cost of capital assets to be written off against
a business's taxable profits, Capital Allowances provide fiscal
incentives for investment in waste related projects that would
otherwise be unaffordable.
Facilitating dialogue and convergence
Ensuring greater consistency and convergence
throughout the entire product life-cycle will be a fundamental
to making real progress in this area and the Government has a
role to play in facilitating co-operation across the supply chain.
The link between packaging and recycling is
an example. Packaging for individual products is commonly produced
from a wide range of materials across the industry. This multiplicity
of materials makes communication to customers about the recycleability
of yoghurt pots complex. This complexity is added to by wide variations
in local authority recycling and collection programmes. As a result,
customers are often unsure about whether and where individual
product packaging can be recycled, leading to inertia.
A more sensible starting point would be to work
towards greater convergence of materials used in product packaging—so
that packaging types (eg yoghurt pots) are made out of a smaller
number of materials. Where possible packaging manufacturers should
be encouraged to move out of materials that are technically difficult
to recycle. This would provide retailers, customers and local
authorities with greater potential to work more effectively together
to promote recycling.
Consistent use of materials, plus consistent
labelling could also be used to encourage local authorities to
collect materials in a more consistent way across the UK. It would
develop opportunities for more consistent communication and stimulate
the development of more effective recycling markets, with fewer
materials in circulation, but with larger volumes being recycled.
8.2 We therefore welcome any support from
Government to facilitate discussion across the stakeholder groups
with the aim of achieving greater levels of consistency and convergence
as part of its drive to achieve a sustainable reduction in waste.
October 2007
45 Customers earn one Clubcard Point for every £1
spent shopping in-store, at Tesco petrol or on Tesco.com. Customers
receive Clubcard Vouchers which they can spend in Tesco stores
or elsewhere once they have collected 150 points or more. Back
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