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Tesco drives performance and sustainability worldwide with CloudApps
PROFILE ... Tesco, one of the world’s largest retailers, employs over 500,000 people and operates in over 6,500 stores in 12 markets. It already serves over 75 million shopping trips a week.
BACKGROUND
As a major global retailer, serving millions of customers every day, Tesco wants to have a broader role in, and a positive impact, on wider society. At the heart of this change is its new Core Purpose; ‘we make what matters better, together’. For Tesco this means going beyond `doing the right thing`, which is now essential for any responsible business. As an extension of its new core purpose, Tesco has also introduced a new value, ‘Using our Scale for Good’, which is about making what matter better for society as a whole. This new value will help Tesco to build on the essential work it is already committed to as a responsible corporate citizen, such as trading responsibly and reducing their impact on the environment. Alongside this, Tesco has also set out three new big ambitions where it can make a real difference: creating opportunities for young people; improving health; and reducing food waste.
Tesco manages and measures its business using a balanced scorecard – the Steering Wheel. It has five segments: Community; Operations; People; Finance; and Customer; each containing a series of key performance indicators (KPIs). It provides the retailer with a more balanced view of the business than using financial data alone, enabling Tesco to act across all of its stakeholders needs. The Community section will track performance against its new Scale for Good strategy.
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CHALLENGES
Tesco has a series of sustainability challenges that include:
Becoming a zero-carbon business by 2050 Halving the carbon intensity of its stores and DCs by 2020 Reducing its distribution emissions per case of goods delivered by 25% by 2020 Meeting the strict and mandatory CRC (Carbon Reduction Commitment) and CDP (Carbon Disclosure Project) reporting requirements Demonstrating accountability and evidence of progress against its new ‘Scale for Good’ strategy through accurate measurement and transparent reporting
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SOLUTION
CloudApps enables Tesco to set industry standards in environmental responsibility and compliance worldwide, by modernising its existing reporting database and system with an integrated solution. The company has implemented CloudApps’ Platform, Sustainability Cloud and CloudApps’ services for all mandatory reporting across the eight KPIs within the Community segment of the Steering Wheel. This includes gathering, reporting and monitoring data from over 4,600 sources on: consumption of electricity; gas and refrigerant gases and use of transport fuel as well as supply of district heating; amount of business travel conducted; waste recycling levels; fundraising and community engagement along with general business activity.
It will allow strategic governance and control and encompass Tesco’s global operations in UK, Central Europe and Asia. Countries where it will be rolled out to include: Turkey;; Malaysia; Korea; Thailand; Poland; Czech Republic; Slovakia and Hungary, in facilities from its headquarters to retail stores and distribution centres.
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REDUCING THE IMPACT ON THE ENVIRONMENT
CloudApps’ technology is used to gather all data to calculate Tesco’s carbon footprint across 15 countries. The company breaks down its emissions into three categories – Scope 1, 2 and 3.
Scope 1 emissions arise directly from Tesco operations, including fuel used in its lorries, heating the stores and emissions from refrigeration gas leakage
Scope 2 are indirect emissions that mainly come from Tesco’s use of electricity
Scope 3 emissions are other indirect emissions, such as business travel
Using CloudApps, Tesco can both automatically and manually update data in order to calculate its Global Carbon Footprint for the annual Tesco & Society Report, its Annual Report and CDP reporting in addition to fulfilling mandatory CRC reporting requirements. CloudApps is able to identify precisely the percentage reduction in carbon emissions per square foot of Tesco’s stores and distribution centres, and in the carbon emissions per case of goods delivered.
BENEFITS TO THE BUSINESS
Tesco has identified a series of benefits to its business from embedding CloudApps into its entire organisation:
More accurate, transparent and consistent reporting worldwide Increased global efficiency through standardised reporting Easy to use and does not require intensive training for users Data can be fed into business performance reporting as well as demonstrating how Tesco is having a positive impact on the environment
The streamlined and standardised reporting from CloudApps has already transformed the way that Tesco collects and analyses its data. The ability for the data to be collected or examined on a global or local level has enabled Tesco to have a holistic view of how different countries or store groups compare to the corporate goals.
Through the accurate measurement and transparent reporting, Tesco is able to pull together all the KPIs for the Community segment of its Steering Wheel. For instance, the community manager in each country can view all their Community KPIs and download a report, quickly and precisely, that can be shared with the finance team for its quarterly KPI reporting.
THE FUTURE – ‘SCALE FOR GOOD SCORECARD’
Tesco is already expanding the breadth of reporting requirements that CloudApps tracks. The company is migrating its CRC reporting onto the CloudApps system as well as configuring it to enable collection of its Corporate Giving data in line with the London Benchmarking Group standards.
To help monitor Tesco’s progress against its four essentials and three big ambitions, the company is introducing its Scale for Good Scorecard in 2014. This is a carefully selected set of measures so that Tesco can hold itself to account and allow its stakeholders to see how they are performing.
“Tesco is committed to reducing our impact on the environment as we work towards our aspiration to be a zero carbon business by 2050. Having access to accurate data enables us to focus our efforts better. CloudApps helps to simplify our data collection and reporting, ensuring our data is comprehensive and supports us in implementing our sustainability initiatives.”
Kene Umeasiegbu, Head of Climate Change & Sustainable Sourcing
To hear how CloudApps has helped TUI travel to achieve ambitious sustainability goals (alongside a number of other business benefits!), sign up for their free webinar on Thursday 19 June.
The efforts by Tesco to drive its business using technology is encouraging, but I am not sure that what they are doing and what they are planning is going to be a game changer in making the global food industry more socially responsible and environmentally sustainable.
I sense from this and some other articles that Tesco management sees these technology initiatives as a way to distance itself from its competitors for competitive advantage ... and in the process maybe there will be some impact improvements.
I see a need for the consuming public to have deep information about the products they buy, because it is the products that people buy that are both the way quality of life and standard of living are delivered to people, and it is through products that the whole story of the supply chain can be made visible.
We know how long it took for the marketing of tobacco to be constrained even though its bad impact on human health was well known. We now have food products that have been designed for maximum profit with problematic impact on people ... such as sugar loaded soda and processed foods. There are issues with the meat industry in connection with growth hormones and antibiotics that eventually impact people. There are environmental issues associated with fertilizer, pesticides and herbicides and the run-off into rivers and eventually the oceans. There are issues with water use. There are issues with packaging.
The data flowing through the Tesco system may well make Tesco more profitable ... but it is less clear whether these data are going to make the world a better place.
Peter Burgess - TrueValueMedtrics
Multi Dimension Impact Accounting
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