Thursday, May 22, 2014

Three Big Ambitions at Tesco

I love retail. It's fascinating - so varied, so full of so many different ways of impacting and influencing our lives. So many different priorities and so many opportunities to drive change. The retail sector is highly visible and constantly in the public eye. Not surprisingly, as most of us interact daily with the retail sector for the products we consume, ranging from food, to personal care, clothes, home appliances, furniture and almost everything else. The choices that retailers make affect millions of lives each day.

The retail sector is no stranger to scrutiny and it's probably true that corporate responsibility and sustainability leaders at the large retailers have a job that is anything but boring. Such is the case with Josh Hardie, Group Corporate Responsibility Director at Tesco. Today is one of those totally non-boring days:

First, Tesco announced it is to remove sweets and chocolate from checkouts across the full range of its stores by the end of the year. Tesco found nearly two thirds (65%) of customers said removing confectionery from checkouts would help them make healthier choices. Just over two thirds of parents (67%) told Tesco that confectionery-free checkouts would help them make healthier choices for their children.

Second, Tesco released its annual corporate responsibility communication, the 2014 Tesco and Society Report. More about that later. First, I was pleased to have the opportunity on this non-boring day to chat to Josh and hear his insights about what made today not boring. Josh has been in his role for around 18 months, having managed Tesco UK Community activities for three years prior to that.

Me: Well done on getting rid of sweets at the checkouts.....
Josh: Yes, we believe we are the first in the industry to do this. It's an absolute fit with our approach to helping people manage their health, and their family's health, by not creating temptations that don't support a healthy lifestyle.

Me: And this on the day you publish your Tesco and Society Report...
Josh: We are working all the time to advance our objectives and make a positive impact. The news is not the publication of the report. It's about how we are fulfilling our role in society. This is a fundamental change. In the past, it was all about the report. Anything you wanted to know about CR at Tesco, you would have to go to the report. Now we are trying to make this much more of a continuous communication, updating our website, much more real-time. While the report is important, it should not be the only way we communicate.

Me: CSR at Tesco has been changing  ....
Josh: Essentially, around 18 months ago, we realized that the way we were approaching CSR wasn't really doing the job, and was rather fragmented. Apart from carbon management, where we had done some great work and achieved impressive results, our overall CSR activity was not having the measurable social and commercial impact that we aspired too. Therefore, we took a long, hard look and what was going on and tried to reframe how to move forward.

Me: And Tesco and Society was born....
Josh: Yes, we learnt from what we did in the carbon area. It had been entirely embedded in the business, and all parts of the business had a role to play. It was managed integrally, rather than just being a project lead by community managers. We decided to take a proper look and adopt a more issues based approach, focusing on the issues Tesco people care about. We had hundreds of conversations internally and externally, and came up with our three big ambitions around reducing food waste, improving health and creating opportunities. These issues truly resonate with Tesco employees and they also meet pressing social needs.

Me: But that's not all ....
Josh: Of course not. But the rest is completely non-negotiable. Trading responsibly, reducing our impact on the environment, being a great employer and supporting communities - these aspects of doing business are now so fundamental that they are just part of the way we work. We need to maintain and improve our performance in all these areas. However, the three big ambitions are the areas where we can take a leadership position, given the size, scale and impact of a business such as Tesco. This can lead to truly meaningful change.

Me: And a culture change......
Josh: Yes, this is the hardest part. You can't change culture in a day. It takes time in an organization like Tesco. Refocusing the way we think about these issues, and our role in advancing solutions, and truly embedding them so they become part of the work that people do all the time and not just a project here and there is a really major transformation for our business.

Me: Aligning with global directions in sustainability...
Josh: We have learnt from what other companies are doing in sustainability, especially the companies that have broken the mold such as Nike. Our approach aligns with the way materiality is driving big change, based on a more holistic view of our role in society. We have flipped the way we are thinking, and this is the start of our new journey.

Me: But I didn't notice any targets...
Josh: Work in progress. Changing the way we think and identifying the big issues we will address has been the focus of our energies so far. Also, setting targets in some of these areas is a real challenge. How do you measure the impact we have on customers' health? Do you look at the healthy content of shopping baskets, or calorie content, or something else? We are reviewing the way we can measure our impact across all our CR performance areas, especially our three big ambitions, and plan to have firmer targets developed by the time our next report is published. We have a new advisory panel that is helping us in this area as well.

Me: I also didn't notice G4 showing up...
Josh: We take guidance from the Global Reporting Initiative framework, but we have chosen not to apply the framework in full. We feel that it's a very useful guide and has challenged us to improve our materiality and disclosure, but prefer the flexibility to do this in a way that is specifically relevant to our strategy.

Me:  What else isn't in there?
Josh: All the answers. We have tried to reflect our approach and performance in a modest way, focusing on the issues, expressing the start of a journey and the challenges ahead in a more realistic way than just saying how wonderful we are. One of the most difficult things is going out to the public with a declaration that we plan to do something in the area of food waste, health or anything else, when we don't have all the answers. Whatever we communicate triggers a debate. With this report, we have had to have the confidence that we mean what we say and that we will work toward delivering our promises, even though we can't provide all the detail today.

Me: And the next report
Josh One thing we might do better in the next report is reflect the different pace of progress in our three ambitions. In this report, we have given all three fairly equal weighting when in practice, we are far more advanced in the area of food waste, we are starting to motor just now in the area of improving health, and in the area of creating opportunities, we have some way to go. In the next report, we should try to reflect this in a way that gives each issue a more appropriate weighting.

Me: Not going to be a boring year, then...
Josh: Anything but.

As Josh Hardie mentioned above, this report is designed around the Tesco and Society approach that was developed last year and introduced in the 2013 report. Despite this not being a G4 report (you all know how I love G4!), the report has a priority-issues-based structure that enables us to clearly navigate to what Tesco is doing in the areas that matter.

The three big ambitions take center stage, and are well explained. At this point, as it is still early days in the "scale for good" journey for Tesco, it's as much about intention as it is about performance, and time will show how Tesco progresses in future reports. This report is very appealing to a wide readership - clear narrative and infographics galore - it might even appeal to Tesco customers. Maybe Tesco should place copies of this report at the checkouts instead of sweets :) Haha. Just joking. I think.

For the more professional reader, the report is rather light on 2013 performance data in areas I would expect a large company sustainability report to cover, such as, for example, employee diversity (other than gender), health and safety, and water performance relative to prior years. Also, while the focus on the three big ambitions is valuable, other issues that we might expect to be discussed in a corporate responsibility report of a major grocery retailer didn't hit the radar - socio-economic impact of store location and placement, construction and green building, sustainable agriculture, supplier diversity, sell-by dates, product labeling and all the other businesses that Tesco is involved in from mobile phones to banking services to petrol filling stations and more. However, the Tesco website contains a wealth of additional information including a catchy business model animation and deeper dive reports into specific issues.  

In the meantime, Tesco is doing more than reporting. It's driving a culture change throughout its business, and that's infinitely more challenging. This, of course, is what will make a difference to the lives of the half a million employees of the company, and the many more millions that go to Tesco to shop in several countries. Reporting about it reinforces and leverages that culture change. I am cautiously optimistically looking forward to the next report already. 

elaine cohen, CSR consultant, award-winning Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me at   or via my business website   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

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