1. © IGD 2014
Toby Pickard, Senior Sustainability Analyst
托比·皮卡德 , 可持续发展高级分析员
Prepared for:

2. © IGD 2014
Centre for insight, education and best practice
• 750+ members across consumer goods sector
• Total value chain perspective
• 40 industry experts, trainers and facilitators
• Well connected and well travelled
• Our expertise:
– Retail and channel strategies
– Future proofing and horizon scanning
– Commercial, category and supply chain excellence
– Collaboration with trading partners
IGD is a research and training charity that helps the food and
consumer goods industry deliver the needs of the public.
Source: IGD

3. © IGD 2014
Cutting to the chase...
24th
October
2005
15th
January
2007
18th
January
2007
Source: IGD

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Scene Setting: The Perfect Storm...
Source: IGD
By 2030, the world’s population will
rise from 7 billion to over 8 billion
Source: UN / World Bank
BILLION
BILLION
7 8
By 2030, demand for food will
increase by 50%
Source: FAO
50%FOOD
By 2030, demand for energy will
increase by 50%
Source: IEA
By 2030, demand for water will
increase by 30%
Source: IFPRI
H2O 30%ENERGY 50%

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Why are UK retailers focusing on Sustainability?
The UK food industry accounts for:
• About 14% of energy consumption by UK businesses per
annum
• 7 million tonnes of carbon emissions per year
• About 10% of all industrial use of the public water supply
• About 10% of the industrial and commercial waste
• 25% of all HGV vehicle kilometres in the UK
Source: IGD research and Defra

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UK retailers’ key Sustainability focus areas
Source: IGD research
Tesco
‘Scale for Good’
Opportunities
for young people
around the world
Improve health and
tackle obesity
Reducing
food waste globally
•Trade responsibly
•Reducing impact on
the environment
•Great employer
•Support local
communities
M&S
‘Plan A’
Climate change
Waste
Natural resources
Fair partnership
Health and
wellbeing
Involve customers
Make Plan A how
they do business
Morrisons
‘Food with thought’
Responsible sourcing
Excellence in selling
Health and well-being
Community
investment
Waste prevention and
carbon management
Asda
‘Sustainability 360’
Energy – save energy
and costs
Maximising recycling
and sending zero
waste to landfill
Selling sustainable
products
Acting to reduce
carbon emissions
across operations
Charity and health
Sainsbury’s
‘Live Well For Less’
Best for
food and health
Sourcing
with integrity
Respect for
environment
Making a positive
difference to their
community
A great place
to work
Env. Sourcing Community Health Company

7. © IGD 2014
Who is most at fault for causing environmental damage?
Source: Unilever
24 47 14 111 10 0 2
21 56 10 1 10 6 1 4
18 61 10 100 7 1 3
17 54 17 110 9 01
15 63 11 110 2 1 7
14 66 11 100 5 0 2
12 65 10 200 6 1 5
8 70 9 100 7 1 3
0 10 20 30 40 50 60 70 80 90 100
ITA
JAP
FRA
SPA
USA
AUS
UK
GER
Individuals
Industries / companies Central government
Local government - my council Non-Governmental / Non-Profit orgs Local community groups
International bodies
& agreements (e.g. Kyoto)
None of these Not Stated

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Shoppers want transparency...
Source: IGD ShopperVista, July ‘13
Knowledge of how grocery products are
made
... % who can imagine restricting their
purchase of food and grocery products to
fully traceable items
2011 2013
2010 2013
34%
19%
56%
12%
60% 75%

9. © IGD 2014
Examples of levers for individual action
Consumers are more informed than ever...
Source: IGD Research
GoodGuide helps shoppers find
safe, healthy, green & ethical
products based on scientific ratings
Buycott helps you to organize your
everyday consumer spending so
that it reflects your principles
puurBuy’s mission is to make it
easy to find sustainably-sourced
food wherever you are.

10. © IGD 2014
Transparency… an unstoppable force
Source: IGD Retail Analysis
Digital labelling – Nestlé
Traceability app – McDonald’s
Nestlé has started to add QR codes to its Kit Kat bars, so
that people have access to information about the
nutritional profile and environmental and social impacts of
the product.
TrackMyMacca’s is a ‘behind the scenes’
traceability app of your McDonald’s meal, showing
where the food comes from.
Edible labelling – Moshi MoshI Sushi chain Moshi Moshi has taken QR codes to the next
level by creating an edible code made from rice paper and
squid ink. When consumers scan the code with a
smartphone, it will take them to the www.eatmsc.org
website where they can read about where the fish comes
from and how it was caught.

11. © IGD 2014
Reasons to invest in sustainability
What are the business reasons to invest in sustainability?
• To add brand value (e.g. Unilever)
• Supporting a brand (e.g. Kenco coffee)
• Anticipate possible regulation (e.g. plastic bag reductions)
• Leadership (e.g. Marks and Spencer (?) )
• Differentiation
• Cost saving
• Consumers expect it
• It’s the right thing to do
Source: IGD Research

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Financial advantages of an effective Sustainability
strategy
Source: IGD
“Asda sustainability strategy set
to deliver £800 million in
savings by 2020”
“net benefit of £185m in
its first five years”
“On track to become a zero-
carbon business and our low-
carbon investment is already
saving us £200 million a year”

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Tesco – Reducing packaging
Source: IGD research and Tesco

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Sainsbury’s - Fairtrade
Source: IGD research, Sainsbury’s, Comic Relief and FairTrade
Sainsbury's Fairtrade sales
have increased by 19% to
£280million over the past
year, meaning one in every
four pounds spent on
Fairtrade in the UK is spent
at a Sainsbury's store

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Sainsbury’s – Reducing consumers waste
Source: Sainsbury’s presentation at IGD packaging conference

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Sainsbury’s - Noble Foods and the Woodland Trust
Source: IGD research, Sainsbury’s, Noble Foods, Woodland Trust and Business in the Community
By 2020, Sainsbury's aims to double
the amount of British food it sells and
wants to source all key raw materials
and commodities sustainably.

17. © IGD 2014
Asda - Increasing transparency
"My ambition for Asda is to actively involve
customers in every aspect of the business, to lift the
lid on how we do things“
Former CEO Andy Bond
Source: Adsa

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Asda – Reducing packaging and road miles
Source: IGD research, Asda, businessGreen, Which? and The Grocer
In-store refillable detergents
Trial was run at five stores,
with Asda delivering two
variants of their own-label
fabric conditioner.

19. © IGD 2014
Marks and Spencer - Schwopping
Source: IGD research and Marks and Spencer (2013)
In the four years since M&S worked on
clothes recycling with Oxfam, it has seen
over 11 million items donated, worth an
estimated £8 million to the charity.

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Southern Co-operative - Educating customers
Source: IGD Research (2013)

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Thornton’s Budgens - Local produce
Source: IGD research (2013)

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Direct and indirect impact - Supplier engagement
Source: IGD research and Asda: part of the Wal-Mart family (2009)
Not including consumers’ consumption
The index will bring about a more transparent supply chain, drive
product innovation and, ultimately, provide consumers the information
they need to assess the sustainability of products. If we work together,
we can create a new retail standard for the 21st century.
Mike Duke, President and Chief Executive Officer, Wal-Mart Stores, Inc

23. © IGD 2014
Joint Business Plan: Unilever promotion with Walmart to
empower shoppers
Save money and help the environment
– Did you know that your family could
save up to $100 and 3,200 gallons of
water per year by turning off the water
when you shampoo and condition?
– Did you know your family could save up
to $150 and 4,600 gallons of water per
year by shortening your shower time by
2 minutes?
Source: IGD research and Unilever (June 2011 )
These messages resulted in promotional
packs of Suave being sold out in three
weeks

24. © IGD 2014
Tesco knowledge sharing with suppliers
Source: IGD research, 2degrees and Tesco
● Launched in March 2011
● The Tesco Knowledge Hub currently has over
>1,800 supplier members from >700 different
organizations.
● The Hub is a private space exclusively for Tesco
suppliers to share experience and questions on
carbon reduction and wider sustainability
challenges

25. © IGD 2014
Joint Business Plans: Tesco and Unilever
Educate Reward
Shopper approach
SMALL ACTIONS in home can make a
BIG DIFFERENCE for the environment!
Source: IGD research and Unilever (2011)

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Tesco Climate Week activities in-store
Source: IGD research and Tesco (2011)

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Joint Business Plans: Tesco and Procter and Gamble
Source: IGD research, Tesco store visit, Tesco and P&G (2012)

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Asda knowledge sharing with suppliers
Source: IGD research, 2degrees and Asda (2012)
● >1,000 members from +350 companies
● Connecting suppliers across categories
and issues
● Sharing knowledge through case
studies, webinars, events and
discussions
Asda launched its Sustain & Save Exchange,
through 2degrees, with the support of IGD in
2012, which is a online information sharing
platform.
The Exchange is hosted by 2degrees and is
supported by senior management within Asda-
Walmart, and IGD.

29. © IGD 2014
Asda and Procter and Gamble
The partnership with Asda will help
shoppers save a life every hour by
2020
Source: IGD research, P&G and Asda (2014)

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Industry wide collaboration
• ECR UK - Efficient Consumer Response
• Product Sustainability Forum
• The Consumer Goods Forum
Source: IGD research, ECR, WRAP, Consumer Goods Forum and Sustainability Consortium

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Summary and round up of retailer strategies
Retailers are...
• recognising that the majority of the impact within the supply chain is outside
their direct footprint
• increasingly looking to source products that are both local and ‘sustainability
certified’ (Palm Oil, FSC, MSC etc)
• opening their doors and are becoming more transparent
• developing scorecards to monitor success and increase transparency
• working with NGO to ensure that they are focusing on the most pressing area
• seeing sustainability as a competitive issue
Source: IGD

32. © IGD 2014
Where Next?... Profit and Loss account on natural resources
Puma says it has produced the first-ever
Environmental Profit and Loss (EP&L)
statement.
The account valued the greenhouse gas
and water consumption impacts of the
company’s operations and supply chain at
€94.4 million ($133.5 million).
Puma now plans to factor water scarcity
into its procurement decisions.
The company now requires its top
suppliers guarantee that sub-suppliers
meet Puma’s core environmental
standards.
Source: Puma and Environmental Leader (2012)

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One step further... Net Positive
Source: IGD research, BT and Kingfisher (2012 and 2013)

34. © IGD 2014
Final thoughts
• Sustainability is a journey, not a destination
• Different organisations have different focuses and are at different
stages of the journey
• Organisations will need to continuously improve performance; to
mitigate negative impacts and maximise the positive impacts
• There is a need for collaboration and improved integration; no
individual person, company or country can address the issues alone
• Need to mainstream sustainability in core business strategies and
values
Source: IGD

35. © IGD 2014
Further information and questions
Source: IGD.com, IGD’s Retail Analysis and IGD’s Supply Chain Analysis
Access free information on Sustainability by
visiting IGD’s sustainability website,
www.igd.com/sustainability. The website is a one-
stop-shop information resource to assist you in
rising to the challenges associated with
sustainability issues.
See the Supply Chain Analysis ‘Sustainable
Supply Chains’ hub page for the latest insight,
presentations and news from retailers and
manufacturers in food and grocery:
http://supplychainanalysis.igd.com/Hub.aspx?id=
18&tid=6&fid=3
Go to IGD’s Retail Analysis for the latest news,
presentations and developments from retailers in
food and consumers goods industry. Find out
more here: http://retailanalysis.igd.com/
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Website Case studies
Downloads
Website Presentations
Retailer news
Presentations

36. © IGD 2014
Contact details
For further information, please contact: toby.pickard@igd.com
Or visit: www.igd.com/sustainability Follow us on Twitter @TobyPickard_IGD