The explosion of environmental issues into the public arena in the last few months, amid reports that the way food is produced, packaged and transported accounts for nearly a third of our impact on climate change, has seen major multiples vying for green credentials. But how much room is there on the green bandwagon? And what do these environmental pledges mean for the industry?
The trend was arguably kick-started in 2005 by Wal-Mart president Lee Scott who made a $500 million (£225m) commitment to use 100 per cent renewable energy, eliminate waste and cut greenhouse emissions by 2009.
The call for action, which was once a marginalised green lobby, has since become a mainstream concern. The first consumer-focused environmental rating report, Greening Supermarkets, from the National Consumer Council (NCC), released in September 2006, found UK retail giants need to work harder to cut damage done to the environment. The NCC put the top eight supermarkets to the test on four key green indicators - from seasonal food and organics, to sustainable sourcing and cutting waste.
Waitrose came top overall with a B rating, M&S and Sainsbury’s tied in second place with a C rating, D-rated Asda, Co-op and Tesco came in third, while Morrisons and Somerfield lagged behind with an E rating.
NCC chairman Lord Whitty warns the number-one contributor to climate change for a typical household is food. “By throwing away 10 billion carrier bags each year and transporting carrots from Egypt and strawberries from New Zealand, we hit the environment hard,” he says. “But shoppers are increasingly keen to do their bit.”
The globalisation of fresh produce sources is one of the factors behind the damage the industry does to the environment, according to Andrew Wright, at leading fresh produce packaging supplier Long Life Solutions. “The major retailers source from all over the world to get continuity of supply and fly planes in from anywhere,” he says. “But they have not always operated using the right discretion.”
Air-freighted food - mainly fresh fruit and vegetables - accounts for 0.1 per cent of total food miles and generates 13 per cent of total food transport CO2 emissions, according to the Department for Environment, Food and Rural Affairs (Defra).
The race to be crowned the greenest supermarket began in earnest with a string of green initiatives launched in the new year.
Marks & Spencer launched a £200m “eco-plan” - named Plan A - in January. The centrepiece of the 100-point initiative, which was welcomed by sustainability campaigners as the most progressive project of its kind by a mainstream retailer, is a pledge to become “carbon neutral” by 2012.
The project will see a commitment to buying as much food from the UK and Ireland as possible by doubling regional food sourcing within 12 months. The amount of air-freighted food will be minimised and clearly labelled as a ‘flown’ imported product.
The retailer also aims to tackle waste by reducing the use of packaging by 25 per cent and restricting the range of materials used to ones which can be recycled or composted.
A renewed emphasis on healthy eating includes the introduction of the Food Standards Agency-approved traffic light labelling system and the 1,500 in-store healthy eating assistants.
The move will impact on every part of M&S operations over the next five years.
Businesses need to do their bit to tackle the challenges of climate change and waste, says M&S chief executive Stuart Rose. “Our customers, employees and shareholders now expect us to take bold steps and do business differently and responsibly,” he says. “We believe a responsible business can be a profitable business. We are calling this Plan A because there is no Plan B…
“This is a deliberately ambitious and, in some areas, difficult plan. We don’t have all the answers but we are determined to work with our suppliers, partners and the government to make this happen. Doing anything less is not an option.”
Plan A will mean that M&S could meet the challenge to reduce CO2 emissions set by the Stern Review nearly 40 years ahead of target.
Rose says M&S will also help its suppliers and customers to change their behaviour using its influence that extends to more than 2,000 factories, 10,000 farms and 250,000 workers, as well as millions of customers visiting more than 500 stores in the UK.
Jonathon Porritt, founder director of Forum for the Future, who advised M&S on “Plan A”, says the project “sets a new benchmark” in the way businesses should approach the environment. “It raises the bar for everyone else - not just retailers, but businesses in every sector,” he says. “ We all know that even at the end of these five years there will still be a huge amount for M&S to do but we warmly welcome the scale of the ambition of this plan in particular the commitment to include customers and suppliers.”
The M&S initiative has also attracted praise from sustainability campaigners across the UK.
WWF-UK chief executive Robert Napier holds up M&S as a model for other retailers. “Such bold aspirations as outlined by M&S can only help drive other supermarkets and the retail sector towards supplying products in a way that protects our planet and sustains the natural resources we depend upon,” he says.
Blake Lee-Horward, Greenpeace UK campaign director, adds that M&S has succeeded in acknowledging the scale of the environment issue. “If every retailer in Britain followed M&S’s lead it would be a major step forward in meeting the challenge of creating a sustainable society,” he says. “But it is still only a step in the right direction. Not a revolution.”
But M&S is far from the only retailer to go green and, just days after Plan A was revealed, a plethora of environmental initiatives from major retailers hit the headlines. The green promises invariably follow a similar outline, with food miles, packaging, waste and recycling at the top of the agenda.
UK number-one retailer Tesco announced a £500m green initiative which will feature a “carbon calorie counter” on every own-label product to show the amount of CO2 generated during development and distribution. “The carbon counter will give shoppers the information they need in the same way that they can check fat, salt or sugar contect. This will give them the power to choose what to buy,” says a spokesman.
But there are no well-established methods for collecting such information so Tesco has agreed to invest £5m in research at the Environment Change Institute at Oxford University.
All air-freighted product will be labeled with an aeroplane symbol under the scheme, and automated recycling machines will be installed in 100 stores by April.
“There aren’t many things that keep me awake but this is one,” says Tesco chief executive Sir Terry Leahy. “The market is ready. Customers tell us they want our help to do more in the fight against climate change. We have to make sustainability a significant, mainstream driver of consumption.”
The measures represent a step in the right direction, says John Sauven, director of Greenpeace UK. “One in every eight pounds spent in Britain goes through Tesco’s tills, so the power this company has to shrink Britain’s carbon footprint is immense,” he says.
Tesco renewed its commitment to local sourcing last week and plans to open six or seven regional buying offices across the UK. “There is a myth that local sourcing is better for the environment but, while this can be the case, and there are other benefits for the local economy and local farmers, this does not always translate mathematically,” says a spokesman. “Transport must be taken into consideration.”
The retailer converted three quarters of its distribution fleet to biodiesel from January in a move which will cut greenhouse gas emissions by more than 70,000 tonnes a year.
The initiatives introduced by M&S and Tesco can also be found at the major retailers across the UK.
Wal-Mart-owned UK chain Asda has pledged to reduce its carbon footprint by at least 20 per cent in the next six years. Trials for direct deliveries from farms to stores are underway in Cornwall, while the Asda train, which has cut 22 million road miles from it distribution system, has just celebrated its fifth birthday. Own-brand packaging will be redesigned within the next 18 months to reduce the size and weight by a minimum of 10 per cent.
Morrisons and Somerfield, the lowest rated supermarkets at the time of the NCC report, have also committed to promoting British fresh produce in season as well as encouraging recycling and the re-use of plastic carrier bags.
But the retailers deny the race for green retailing. “Tesco takes a lead on environmental issues, but this is not a horse race,” a spokesman tells FPJ. “What we are trying to do is introduce initiatives that benefit the environment and, if everybody does the same, that’s all well and good. It’s important to remember that this is not a competition as we would compete on price, and we can learn from each other.”
The flurry of environmental initiatives cannot be a fad, says Wright. “The push to be more environment-conscious has to be a long-term commitment. But consumers want to be able to keep their cheap flights and 4x4s,” he says.
“This is a far bigger issue than any retail strategy and the government knows that if we don’t address it now, we will end up in a serious hole.
“But the move towards green retailing will be driven by consumers. The retailers had paid lip service to what we are doing, but now, for the first time, they are taking a serious look at what can be done.”
Sainsbury’s chief executive Justin King anticipates that the emphasis on green issues will grow in the year ahead. “More than ever, people demand healthy, fresh and safe food, and care passionately about issues that affect their local community and their wider environment,” he says. “We recognise our own impact on these issues, and 2007 will see us continue to make this our priority, building on our leadership in areas such as food labelling and pioneering environmentally responsible food packaging.
“Sainsbury’s has 16 million customers, and with this kind of scale comes responsibility, but also the opportunity to create positive change.”
The supermarket giant, which sells more loose produce than any other retailer and aims to reduce packaging by five per cent each year, put more than 500 lines in compostable packaging from September 2006. The retailer is aiming for a five-per-cent reduction in carbon emissions by April 2008 and a 10-per-cent drop in waste sent to landfill by 2010.
But finding real solutions to environmental problems will take more than jumping on the bandwagon, says Wright. “Some retailers, including Sainsbury’s, have made a mistake by making a knee-jerk reaction to the national media coverage on environmental issues,” he says.
“The market needs to sort out supply chain problems and the food wastage crisis both in the UK and worldwide. Each person per household throws away £428 a year in food wastage,” he adds.
Wright says Long Life Solutions has reduced more CO2 emissions than any other company in Europe by enabling firms to harvest, store and ship product effectively. “If the industry moves to Smart technology, packaging waste could be cut by 50-60 per cent,” he says. The shift from air transport to shipping enabled with Smart technology could also improve green credentials, he adds.
Wright will consult with political drivers including Defra secretary David Miliband to reduce the number of problems in the supply chain. “Education is very important. Our retailers don’t fully understand the problems that face the industry, and neither does the rest of the supply chain,” he says.
“It is necessary to improve the supply chain management of food from the source, implement the right technology, and make buyers responsible for produce and food waste,” he adds. “The retailers must be made to understand supply chain needs and the costs involved.”
THE SEA TURNS GREEN
Over recent months, there has been an explosion of ‘green’ initiatives from UK supermarkets. Is this a passing fad to recruit environment-conscious consumers? Or are we witnessing a sea-change in food retail? asks Kath Dalmeny of Sustain: The alliance for better food and farming.
I have been working on environmental aspects of the food system for the past 15 years, but have been absolutely overwhelmed by the tremendous surge in interest in ‘green’ thinking in the food industry in recent months. I am convinced that this is no fad. More and more forward-thinking food businesses - whether farmer, processor, distributor, buyer or retailer - are now setting environmental issues at the centre of their planning and marketing.
Last year, I helped to design and undertake research for the National Consumer Council (NCC) report Greening Supermarkets, in which the NCC said supermarkets should do a lot more to help their customers become ‘greener’. Mystery shoppers visited retail outlets around the country to measure which supermarkets were doing the most to engage customers with critical environmental issues. Which supermarkets explain why certain fish species should no longer be eaten, being on the verge of population collapse? Which supermarkets promote wood and paper products from sustainable forestry? Which supermarkets promote recycling, and make boxes and packaging out of recycled material? And which supermarkets are most reliant on out-of-season over-packaged fresh produce, multiplying food miles and encouraging a wasteful relationship with natural resources and transport fuel, contributing to climate change?
Waitrose came first with a B rating, M&S and Sainsbury’s shared a C rating, Asda, Co-op and Tesco came third (D), and Morrisons and Somerfield trailed behind in fourth (E).
The findings caused a media furore. Supermarkets raced to pronounce their environmental credentials. What I learned from the process is that consumer organisations have become wise to the fact that environmental sustainability must become a point of competitive advantage if we are to see real changes to help customers do their bit to save the planet.
The stakes are high. Food production, storage, and transportation account for one fifth of greenhouse gas emissions that are increasingly threatening our ability to continue to produce food at all. With high-profile figures such as David Attenborough now acknowledging that climate change is threatening the future life on earth, the public will become more and more interested in those companies who are taking steps to reduce greenhouse gas emissions. Whoever thought that our food choices could have something to do with the future of polar bears? The fact is that they do, and future customers will understand that relationship better and better over the coming years.
The good news is that climate-friendly food can be a very positive choice. A fresh, seasonal diet rich in fruits and vegetables, produced with care and attention for wildlife and the soil (a major source of carbon emissions), distributed to a diversity of local retail outlets and markets (to reduce transport), and with a decreased reliance on energy-intensive livestock production (animal farming is a major source of greenhouse gas emissions) could be good for everyone - the climate, farmers, animals, wildlife and human health.
Producers and retailers can help bring this about, and many are already finding that this creates many positive benefits - better relationships with suppliers, staff and customer loyalty, and positive media coverage being not the least of them. The most progressive retailers have begun to recognise that long-term partnerships with farmers, and paying fair prices, can help them to plan ahead and achieve environmentally friendly practices. Even the Competition Commission has begun to wake up to the fact that unless supermarkets pay fair prices for produce, there will not be enough money available for producers to invest in climate-friendly practices.
As communicators, producers and retailers, our job must be to present the wonderful fresh, seasonal, local and abundant vision as a positive choice, and to support food producers to help us achieve the vision. For anyone who has begun to understand the full implications of climate change if we fail to act, the alternative is unthinkable.
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