Figure 1: implications of select key targets in the 2030 Global Biodiversity Framework3
Food & Materials transition engagement: Food security and biodiversity
Sector and country: Retail, United Kingdom
Why we engaged ?
Tesco is a significant holding and we have had an ongoing engagement with the company on a range of sustainability issues. Earlier in 2022, we identified Tesco as having relatively weak disclosure on nature relative to its risk exposure on the theme.
How we engaged ?
We had a small group meeting with the Head of Environment and Sustainable Agriculture in December 2022 on developments related to Tesco’s nature strategy.
What we learnt ?
- Nature and biodiversity are emerging themes and although Tesco’s work in this area is under development, their efforts to date are promising. In particular, Tesco is funding and piloting a location-based mapping tool with Worldwide Fund for Nature (WWF) that will provide an insight into nature risk among suppliers (e.g. vulnerability to water scarcity, soil degradation, or pollinator decline). Innovatively, this exposure data can be overlaid with environmental impact data and with suppliers’ scope 3 emissions. Considering risk and impact together will enable Tesco to identify “hotspots” where it can focus its efforts on. Roll out will start with dairy, then fresh produce, and eventually grains and commodities.
- Commodity traceability on deforestation is a work in progress. Despite putting a lot of resource towards traceability, Tesco underlined the scope of the challenge given their vast supplier network, different regulatory approaches being taken between the UK and Europe and systemic issues with opaque commodity supply chains.
- Soy is the company’s biggest exposure to deforestation risk. Currently, there is only a small volume of fully traceable soy and it is pursuing multiple avenues to try and improve supply. Collaboration on a pre-competitive basis is key and Tesco has been involved in leading several initiatives.
- Tesco will be among the first to pilot report on TNFD.
We were reassured as to the depth of Tesco’s approach to nature in operations and in supply chain including the innovative supplier mapping work with WWF. In our view, further effort to reduce sourcing impacts will build on Tesco’s leadership on demand-related aspects such as food waste and sales of plant-based products. Traceability remains a challenge, particularly for key commodities such as soy. We will continue to monitor progress on this at Tesco and across the sector in light of the incoming EU legislation.