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UK: Environmental Impact of Supermarkets

The survey also revealed how just over a third (36%) of UK food suppliers have had to give account of their environmental performance when tendering for supply contracts with Britain's big eight supermarkets, while 46% have been proactively approached by the major multiples to  discuss ways to make their trading greener.

Current environmental performance

With 93% of the food supply industry regarding environmental issues as either very important (50%) or quite important (43%) to their businesses, the industry has already implemented a number of measures designed to improve environmental responsibility. These include: recycling (94%); green office measures such as turning off computers when not in use rather than leaving them on standby (89%); paper/packaging reduction policies (83%); sourcing suppliers by taking into account an environmental criteria (79%) and sourcing goods from renewable sources (61%). 44% of the industry aims to go carbon neutral; 36% to source goods with low food miles and just over a third (34%) to offset their emissions. Interestingly a mere two companies stated that they were doing nothing to improve their environmental credentials, citing costs, perceived lack of value and lack of know-how as the main reasons.

Commenting on the survey's results, Ian Carr a Partner and food and agribusiness expert at Grant Thornton said: "The food industry is already in motion to improve its environmental responsibly, fully aware that public scrutiny over food miles, excessive packaging and carbon footprints is making environmental responsibility a key consideration for their customers and is set to play a part in dictating long term business success." However, said Carr, "the lack of clear standards and the sheer complexity of certain aspects of measurement is adding to confusion and making real progress slow. The Government's leadership on the issue of standardisation is essential."

Food miles

In relation to measuring food miles, the industry presents a mixed picture. Only 10% already measure the miles involved in their supplies while 23% measure a proportion of them, the vast majority don’t. However, among those businesses that don't measure food miles almost a quarter (24%) plan to do so.

Consistency of measurement remains a problem. Even among the 23 business claiming to measure food miles, 15 did not know what the average amount travelled by their products was. A further eight who were able to answer the question suggested that their 'average product' miles was just over 1,000 (1,019). The main problems that have been encountered by food suppliers when trying to measure food miles included a lack of standardisation of measures (15); the need to make broad assumptions (14) and lack of data from suppliers (9).

CO2 emissions

A mere 4% of businesses in the food supply industry claim to measure their carbon emissions (but were not able to quantify them) with a further 14% measuring just part of their carbon footprint. Within the three quarters of the businesses not measuring emissions 36% expressed a willingness to do so but cited the same reasons of lack of standardisation, broad assumptions and lack of data to justify the reasons for not taking a lead on CO2 evaluation.

Supermarket environmental pressure

"Showcasing their own environmental credentials as part of the tendering process to win contracts to supply supermarkets is becoming more frequent and symptomatic of a substantial change that is ongoing within the grocery supply chain," said Ian Carr.

While over a third of UK food suppliers have already had to account for their environmental conduct when dealing with supermarkets, the majority have not. However, a significant 30% expect this to soon become the norm while a mere 16% don't expect this latest trend to become established.

"Supermarket supplier discussions aimed at improving environmental responsibility are already bearing fruit," said Carr. "Among the 36% of businesses surveyed that had already held discussions with supermarkets to operate in a greener way, 38% confirmed that measures such as reducing packaging and transport miles, recycling or using less pesticides to improve environmental performance have already been implemented."

Of the total surveyed, 34% indicated having reached a general agreement to further discuss ways of improving performance; 22% agreed to draw up a list of things that would improve environmental performance and to cost them, while 6% agreed to a set of green measures to be implemented within an agreed timeframe.

"To put it into context, a pristine environmental conduct alone is not going to win anyone a contract but according to over seven in ten companies it is an important consideration on the part of the multiples and set to become ever more pivotal". However, said Carr, "The industry is changing. It is simply no longer acceptable to supply goods from field or factory to the kitchen table without giving as much as a second thought to the impact this has on the environment. We are seeing supermarkets demand more of their suppliers and in time the tables will more regularly be turned on the suppliers supplying suppliers."

Asked what lay beneath the efforts supermarkets have recently made to champion the green cause, just over half (51%) of respondents described it as a genuine move (21%) or a step in the right direction (30%). 49% remain sceptical, branding it a mere PR stunt.

However, observed Carr: "These findings seem to correlate with the fact that almost half the industry's players (46%), have been approached by supermarkets to examine environmental performance. With the green cause shooting up the agenda only in the last couple of years, supermarkets will have focused on their largest suppliers first, meaning that many mid-market players who think this is a PR stunt, have yet to see with their own eyes that things are changing. Good environmental performance is fast becoming a way to stay ahead of the competition and key to establishing long-term successful relationships with supermarkets.

"It is time for the government to bring some consistency to this important area to facilitate more and more businesses joining the race to help the nation meet its CO2 reduction targets. Recycling, using less pesticides, improving energy efficiency by reducing CO2 or cutting food miles are all very worthwhile causes but, at present, standards can vary hugely and claims of good governance can be somewhat overstated.

"Only by taking a leading position on improving environmental standards can the UK government help to make sense of this growing market and persuade its European and global counterparts to apply similar action which will bring consistency and facilitate the measurement of the environmental effects of a global economy," he continued.

"While standardisation will inevitably take time to become established, companies should try and look at improving environmental policy as a real business opportunity. Rather than just focus on the environmental impact of individual products which can be enormously complex to determine, why not look at the environmental impact of the company itself and seek to introduce greener practices that can help put that company, in the eyes of environmentally focused customers which the supermarkets claim to be, squarely ahead of the game, overturning short term cost implications into long term economic benefits."

"The case in point is farmers going organic before the Soil Association standards were developed. It was those early adopters that put themselves in the driving seat to reap the benefits of the organic boom we have seen develop in recent years,” he concluded.