January 28, 2020 / 12:28 PM / a month ago

Breakingviews - UK grocer goals betray scale of climate challenge

Signage for Sainsbury's is seen on delivery vans at a branch of the supermarket in London, Britain, January 8, 2020.

LONDON (Reuters Breakingviews) - UK grocers are ramping up their green credentials as the battle for woke customers intensifies. On Tuesday, J Sainsbury vowed to splash out 1 billion pounds on cutting its carbon footprint to zero in the next 20 years. Companies getting tough on their own emissions should be encouraged. But like banks and big oil, Sainsbury’s is yet to decisively tackle a much knottier issue – customer behaviour.

Supermarkets are sitting ducks for climate activists. The UK’s big four retailers, which also include Tesco, Walmart-owned Asda and WM Morrison, wrap goods in needless plastic, power inefficient buildings with polluting air conditioners and in some cases sell diesel from forecourts. Outgoing Sainsbury’s Chief Executive Mike Coupe recently pledged to cut plastic packaging in half by 2025, and the 1 million tonnes of carbon the 4.5 billion pound company spews into the earth’s atmosphere is an obvious next target.

Still, a more audacious plan would see Sainsbury’s reveal how many emissions come from its sprawling supply network, including meat manufacturers and oil companies. If it were to include the impact of the methane produced by cows, wasted food which ends up in a landfill and the diesel burned in customer cars, it would probably get much harder to hit its target.  Just look at oil companies like BP, where operational Scope 1 and 2 pollutants account for around 50 million tonnes of carbon dioxide equivalent, while its indirect Scope 3 emissions account for nearly 10 times that figure, according to Morningstar research.

Sainsbury’s says it will soon get around to tackling the bigger problem. It says it is contacting suppliers to set their own net-zero commitments and is working with the Carbon Trust to calculate the scope of its overall emissions. Once it has a handle on the problem, it will then set a more ambitious target.  

The normally cited risk is that Sainsbury’s 3.4% 2019 operating profit margin falls further behind Tesco’s 4.7% as it tries to hit its tougher targets. But it’s also possible that environmentally aware shoppers consciously choose the retailer for its greener stance. Either way, if a relatively simple business like a grocer is wrestling with its true carbon footprint, it shows how much of a problem big oil has.

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