Peter Madden, chief executive of Forum for the Future, writes a monthly column for Gristmill on sustainability in the U.K. and Europe.
British supermarkets are now competing to go green. Two big retailers have just launched initiatives to tackle climate change.
Marks & Spencer, which sells food and clothing to Britain’s middle classes, promised this month to cut waste, sell fair-trade products, and make the company carbon neutral within five years. Environmentalists praised its 100-point “eco-plan.” Greenpeace U.K. said, “If every retailer in Britain followed Marks & Spencer’s lead, it would be a major step forward in meeting the challenge of creating a sustainable society.”
Later the same week, Tesco, one of the top five retailers in the world, set out its own stall on climate change. As the giant of British supermarkets — one in every eight dollars spent in British shops goes into its tills — Tesco is in a similar position to Wal-Mart in the U.S., and faces many of the same criticisms.
Tesco’s 20-point plan promises independently audited absolute reductions in carbon-dioxide emissions from its operations (amounting to a 30 percent cut per case of product by 2009), carbon labeling on all products, and a thrust to make green choices available to millions of consumers in an affordable way. For example, it will be selling low-energy light bulbs at half price.
We Brits have also watched the remarkable changes at Wal-Mart with interest, not least because that company owns our second-biggest supermarket chain, Asda.
Why is all this happening? I think that different supermarkets have different motivations. Marks & Spencer has always been a high-end, high-quality, and high-price player. It clearly realizes that it will reinforce its brand and keep customers loyal by tackling sustainability issues. This is great news — that there is enough of an affluent and concerned market to drive this change.
For Tesco and Wal-Mart, the story is a little different. Of course they are getting some pressure from customers. Tesco says that customers “want our help to do more in the fight against climate change.” But I don’t think this is the overwhelming driver. The majority of ordinary shoppers still put price and quality way ahead of ethical and environmental issues.
I think there are two main factors at work. It is partly to do with license to operate. These companies are so big, with such major influence, that they risk becoming lightning conductors for all kinds of opposition. This means they need to sort out their corporate citizenship on a range of issues.
It is also because tackling climate change is coming to be seen as a central part of business leadership. As Wal-Mart CEO Lee Scott said, “as we look at our responsibility as one of the world’s largest companies, it just became obvious that sustainability was an issue that was going to be more important.” Similarly, Terry Leahy at Tesco now says he is “determined that Tesco should be a leader in helping to create a low-carbon economy.” And Leahy is no soft touch; he was voted “Most Admired Leader” in Management Today three years in a row.
Will these words make a difference? Here I must declare an interest. My organization, Forum for the Future, advises both Marks & Spencer and Tesco on sustainability issues. I understand why many in the environmental movement have been critical of the major supermarkets. However, I do think there are good reasons to welcome these moves.
Firstly, for the signals they send to the rest of the business community. When Leahy nails his colors to the mast on climate change, the rest of business listens — even the most hard-nosed. It is great news that the bosses of these companies now see climate change as a strategic part of how they will do business in future. As Leahy says, “it demands that we transform our business model so that the reduction of our carbon footprint becomes a central business driver.”
The sheer size and clout of these companies means that they can radiate impacts up and down their supply chain. Marks & Spencer says that its influence “extends to over 2,000 factories, 10,000 farms, and 250,000 workers,” and that its action on climate change will be equivalent to taking 100,000 cars off the road. On light bulbs, Tesco promises that “we will work with our suppliers to ensure that every type of fitting in the U.K. has an energy-efficient option.”
Size does bring with it problems, but it also allows these companies to mainstream sustainability. Supermarkets can help millions of customers to make straightforward and affordable choices.
The influential “I Will If You Will” report, published last year by the Sustainable Consumption Roundtable, concluded that we need to make sustainable choices much easier to take. As part of a supportive framework, it called upon business and government to “edit the choices” for consumers. The supermarkets are doing more and more of this choice editing, on fair trade, organic produce, and climate change.
Tesco has now moved the debate a significant step further, committing to “work with others to develop an accepted and commonly understood measure of the carbon footprint of every product we sell. … It will enable us to label all our produce so that customers can compare their footprint as easily as they currently compare their price.”
The competition to go green is heating up.
