Our Carbon Footprint Methodology

Our approach

We have calculated our carbon footprint according to the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD) Greenhouse Gas (GHG) Protocol, which is the internationally recognised standard for corporate carbon reporting.

This breaks down emissions into three categories for reporting – Scope 1, 2 (mandatory) and 3 (optional).

  • Scope 1 – These are the direct GHG emissions that originate from assets that Tesco owns or controls. For example, these include emissions from gas and other fuel consumption in our stores, distribution centres and offices globally. We also include emissions from fuel consumption in Tesco owned and leased vehicles transporting the products that we sell. As well as energy, we also include emissions from refrigerant gas leakage from systems in our stores or our vehicles.
  • Scope 2 – This includes the indirect GHG emissions from the generation of electricity and district heating which Tesco uses.
  • Scope 3 – This includes other indirect GHG emissions generated along our value chain. Under Scope 3 emissions we report business travel and emissions from distribution arranged by Tesco but provided by third parties (including secondary distribution globally and emissions from primary distribution in the UK). We include primary distribution for the UK only as we have a greater influence over how products are delivered to our distribution centres than in the rest of the Tesco Group. Business travel includes travel by air, rail, company car, taxi and short-term hire car. Additionally, Scope 3 emissions include transmission and distribution impacts of electricity and heat supply and well-to-tank embodied impacts of fuel.

We follow the “operational control approach” to help us determine when to include emissions within our carbon footprint. Our carbon footprint boundary includes operations where we have full authority to introduce and implement operating policies. This means that we include data from our major subsidiaries such as Tesco Bank, One Stop, and and Dunnhumby as well as Tesco stores and DCs where we have operational control. In cases where Tesco divests of an asset part way through a financial year, and thus relinquishes operational control, emissions from this source will not be included in Tesco annual carbon footprint. This year we divested from our operations in Turkey and Dobbies in the UK and have therefore removed these emission sources from both our annual and baseline carbon footprint.

In the case of emissions from distribution, we also include journeys which are provided by third parties but have been arranged by Tesco. These are included in our Scope 3 emissions.

We have used emission factors from Defra/DECC’s GHG Conversion Factors for Company Reporting 2016 and have determined the Scope 2 electricity impacts for non-UK electricity from the International Energy Agency (IEA). In line with current UK Government guidance, an emissions factor of zero has been applied for renewable electricity only where this has been generated from sources owned or controlled by Tesco.

Our carbon footprint is measured in carbon dioxide equivalent, or CO2e. Different greenhouse gases have different effects on the climate, and CO2e is a way of standardising the global warming effect of these emissions.

In accordance with the Greenhouse Gas Protocol Scope 2 Guidance we calculate our electricity emissions using both the location and market-based methods. Our market-based emissions have been calculated by collecting generation data directly from our suppliers in countries where Tesco has a choice in its electricity supplier. All of the supplier-specific factors applied relate to production mixes in 2015, for the 2016/17 footprint, and 2014, for the 2015/16 footprint. This year we have changed how we present our carbon intensity, gross, and net emissions to more clearly demonstrate the impact of our low carbon electricity procurement. Our 2016/17 Scope 2 market-based footprint includes Tesco’s purchase of 1,210 GWh of UK electricity backed by Renewable Energy Guarantees of Origin (REGO).

We present our footprint in three ways:

  • Gross emissions: Total CO2e emissions within the boundaries of our footprint
  • Net emissions: Total CO2e emissions within the boundaries of our footprint minus the emissions credited through renewable energy we generate and provide to the national electricity grid.
  • Emissions per square foot of store and distribution space: The intensity of our Scope 1 and Scope 2 emissions in the context of the amount of trading floor area they relate to.

Our carbon footprint

  2016/17 2015/16 2006/07
Scope 1 1,236,980 1,301,746 1,345,507
Scope 2 (Market method) 1,582,275 2,004,992  -
Scope 2 (Location Method) 2,357,245 2,528,323 2,259,984 
Scope 3 1,073,721 1,097,491 1,064,460
Total Gross Emissions 3,892,977 4,404,230 4,669,951
CO2e from renewable energy exported to the grid 1,154 1,513  - 
Total net emissions 3,891,822 4,402,717 4,669,951

 

How we gather the necessary data

Our carbon data is collected by managers in each of the countries in which we operate and entered into an internet-based reporting tool that has been designed specifically for our carbon footprinting process. This tool has been developed to reflect the requirements of the GHG protocol. The tool calculates CO2e emissions for each country and Tesco group as a whole, as well as performance against our Key Performance Indicators (KPIs) and a number of other measures. All data is quality checked and reviewed by a dedicated analysis team and Group Energy managers.

Data estimations

Diesel Use by suppliers

Where we use 3rd party contractors to deliver goods from our DCs to stores, we estimate the amount of diesel they have used. Outside the UK we do this based on the distance travelled, (Tesco data), and average fuel performance data of the vehicles used for transport (contractor data).

Diesel used (litres) = Distance (km) x Vehicle fuel economy (litres/km)

In the UK, we assume our suppliers have the same fuel usage per case delivered as our own vehicles. This is because we use the same types of trucks and deliver along the same routes.

Diesel used (litres) = Number of cases delivered by suppliers x Diesel use per case delivered (based on Tesco data)

Data gaps

Where data has not been provided by an area of the business included within the boundaries of carbon footprint we will estimate the relevant impacts by using the most appropriate data available (e.g. historic consumption, annual extrapolation, average emissions).

Excluded data

For a small number of areas actual data were unavailable and reasonable estimates could not be produced. The reporting and assurance processes have concluded that these areas are not of significance to the carbon footprint data overall. We will continue to improve the quality of our data and will work to obtain actual data for these sources in future.

  • Emissions from diesel used in back-up generators in the UK.
  • Employee business travel by car for India and Malaysia.
  • Short term hire car in non-UK countries.
  • Taxis for non-UK countries (except Poland).
  • Emissions from asset sites – these are vacant buildings that we own but have not yet developed into stores and therefore have minimal emissions.

In line with our operational control approach, emissions from the following businesses and sources are not included in our footprint:

  • Tesco Mobile services -these are delivered using O2’s mobile network infrastructure and these emissions are reported within O2’s carbon footprint.
  • Tesco Direct home delivery – these are carried out by separate companies where Tesco does not have control over the delivery operations.

Baseline and restatements

We use 2006/7 as the base year for our carbon footprint as that is when we first launched our climate change strategy. In order to accurately track our progress on carbon reduction, we recalculate our base year and the prior year emissions for relevant significant changes, such as updates to emission factors. More information on our base year recalculation policy can be found at www.tescoplc.com/carbonfigures.

The below table shows these updated figures. All numbers are in million tonnes CO2e.

2006/07 2014/15 2015/16
4.67 4.41 3.89

Independent External Assurance

Independent external assurance of our carbon footprint has been provided by KPMG. Their full assurance statement can be found at www.tescoplc.com/carbonfigures.