Tesco Scores in Top 3 of Climate Change Governance Champs

Tesco

In a report scoring the climate change corporate governance practices of 63 leading technology and consumer products/services companies, including leaders in the grocery sector, U.K. supermarket operator Tesco scored in the overall top three for its three-pronged climate change strategy, with an impressive 78 points out of 100. The other two companies to garner top scores were technology companies IBM (79) and Dell (77).

By contrast, Safeway earned a 48 score, Whole Foods a 27, and Kroger a 23, while Walmart garnered a 69 score, Carrefour SA a 52, Target a 37, and Costco a 14.

The study, commissioned by Ceres and the Investor Network on Climate Risk and authored by the RiskMetrics Group, looks at nine additional industry sectors besides grocery and drug retailers and big-box retailers: apparel, beverages, personal and household goods, pharmaceuticals, real estate, restaurants, semiconductors, technology, and travel and leisure.

The report evaluated the companies' climate risk governance initiatives by the following criteria: board of director oversight, management execution, public disclosure, greenhouse gas emissions accounting, and strategic planning and performance.

"Tesco and Walmart stood out for their performance on energy efficiency, green product promotion, and supply chain management," noted Ceres.

Among Tesco's achievements in climate risk governance was its use of key performance indicators to benchmark progress and set climate change goals, its pioneering efforts to promote carbon labeling, and its active engagement in public policy discussions to support and define a regulatory framework for greenhouse gas emissions.

Meanwhile, Walmart has "made great strides" in reducing emissions across its company, according to the report, which credits outgoing c.e.o. Lee Scott. The retailer has taken a proactive role in supporting regulatory measures and is working with suppliers on energy-efficient solutions, among other actions.

Each of the 63 companies featured in the study is a major energy consumer. For instance, direct and indirect emissions from Walmart's considerable worldwide operations surpass 20 million tons annually -- the equivalent of a midsized power company.

Despite some of the low scores in the retail sectors, the overall weakest results are to be found in the restaurant, real estate, and travel and leisure sectors, "where climate change is barely on their radar," observed Ceres president Mindy Lubber.

To promote the release of the study, Ceres held a press conference at which Lubber; lead report author Doug Cogan of RiskMetrics; Thomas DiNapoli, New York State comptroller and member of Investor Network on Climate Risk; Tod Arbogast, director of sustainable business at Dell; and Jeff Seabright, v.p. of environment and water resources at the Coca-Cola Co. (which scored a 65) all spoke.

"Climate [risk governance] is a fundamental business issue, " said Lubber during the press conference, adding that it was "the right thing" from the point of view of investors, the bottom line, and consumers.

Boston-based Ceres is a coalition of investors, environmental groups, and other public interest organizations working with companies to address sustainability challenges such as global climate change. The Investor Network on Climate Risk, which is coordinated by Ceres, is a network of 70 investors with collective assets totaling $7 trillion focused on the business impacts from climate change.

New York-based RiskMetrics Group is a global provider of risk management and corporate governance products and services to financial market participants.