With a new 'green' initiative launched virtually every week, the UK's biggest retailers are battling it out for the title of 'greenest' supermarket.

But does this reflect a genuine concern for the environment or is it just a PR gimmick? Bryony Moore, Jo Southall and Katy Brown investigate.

The modern supermarket

The modern supermarket is an incredibly complex creature. With the biggest stocking up to 40,000 different products, their supply chains reach around the world and impact on pretty much every ethical issue you can think of.

When we first began to analyse supermarket behaviour twenty years ago, best practice was to stock a few organic or 'eco-friendly' products on a shelf somewhere at the back. Nowadays the bigger supermarkets have realised that leaving decisions on what constitutes responsible behaviour to consumer choice is not an easy position to defend.

This means that best practice now involves applying ethical standards across their whole supply chains (such as only stocking free-range eggs). Over the next seven pages we provide a detailed analysis of the those we believe to be making the most progress.

The rise of the hard discounters...

The media has recently given much attention to a credit-crunch driven rise in sales at the hard discounters Aldi, Lidl and Netto, whose combined market share rose to 6.1% in August 2008.

Commentators have been surprised to find the occasional organic and Fairtrade product on sale at these stores and have mistaken this for evidence of ethical behaviour.

Our research for this report reveals, however, a continued contempt for any values beyond profit in the failure of hard discounters even to discuss ethical values. This type of behaviour may be excusable in what are essentially networks of small independent shops such as Spar, but in large international companies like these it is not.

And if you were beginning to suspect that their low prices were a result of particularly unethical behaviour in their supply chains, evidence is beginning to emerge to suggest that you'd be right.

A survey of workers at an Aldi supplier in Indonesia for example revealed:

• 90% stating their wages were insufficient to meet their daily needs
• 55% stating they had no written contract, and
• 40% reporting trade union repression.13

With their single-minded focus on price, they show no understanding of the fact that we need to be in transition to a sustainable, post-oil economy.

We call on ethical consumers to boycott these stores until they wake up to the reality of the world around them.

...and the global giants

This is not to say that shopping at Tesco or Asda has much to recommend it either.

At the beginning of the 1990s, the UK's 'big four' chains — Tesco, Asda, Sainsbury's and Safeway — took 47% of British shoppers' spending on food in supermarkets.

Since then, a series of mergers and acquisitions, technological innovations, and an explosion in the number and size of stores have raised this figure to 75%. The number of stores operated by the big four supermarkets has more than doubled since 2000 reflecting both the opening of new stores and the acquisition of competitors.1

Tesco in particular has recorded breathtaking growth, doubling its market share from 15% to 31% between 2000 and 2006, and trebling its store count by opening 1,200 new shops during this period.

An estimated 32 million people shop in UK supermarkets every week, and over £7 out of every £10 spent on groceries in Britain now goes into supermarket tills.2

This year Tesco has begun to deal with criticism of its activities by using the courts, both in the UK and abroad, to bully its critics into submission.

McDonald's in the 1990s springs to mind. For this, Tesco was one of five companies to receive the Consumers International Bad Company award 2008.

'Who Pays?' report

In 2007 Action Aid published a report called 'Who Pays?' which looked into the way supermarkets, in order to reduce prices in-store, wield their purchasing power to squeeze suppliers, who then pass this on down the supply chain to workers in factories and farms.

The main offenders it named were Asda, Tesco, Sainsbury's and Marks & Spencers.2 However, don't let this lead you to the assumption that this is because the cheaper supermarkets are any better.

This report doesn't assess Aldi, Lidl and Netto, who aren't even covered by a basic supply chain policy.

We urge campaign groups not to overlook these new players, since to do so may ultimately contribute to downward pressure on ethical standards across the sector as a whole.

Co-op and Somerfield

This year the Co-operative Group announced its takeover of Somerfield. As we were going to print the deal was awaiting regulatory approval so we have not combined the groups on our main rating table. This acquisition takes the Co-operative to fifth place in the supermarket league table with 8.1% of the market.

Usually a merger or takeover tends to be bad news for a company's ethical rating. In this case, however, it's a good thing, with Somerfield's ethiscore potentially going up from 0 to 7.

About this report

This report covers

• the 'big four' (Tesco, Asda, Morrison's and Sainsbury's)
• other nationals like the Co-op, Waitrose and M & S
• a couple of regional supermarkets Booths (North West England) and Budgens (mainly South East)
• some smaller grocery and convenience stores such as Spar and McColls

All of them were asked the same questions in a questionnaire. Where they didn't reply, we used information on the company's website.

No publicly available data or no response resulted in a bottom rating on our main table. Companies without set targets for, or demonstrable commitment to improvement in the following areas received a lower rating on our main table:
animal welfare, sustainable sourcing of wood, fish sourcing, organic produce, local produce, Fairtrade produce, and chemicals and pesticides.

Environment

Environmental reporting

Tescopoly have identified the main environmental impacts of supermarkets as follows:

• Climate change — the food industry is responsible for a third of greenhouse gas emissions
• Energy efficiency — large stores and door- less chiller units are inefficient
• Road freighting and food miles — fewer local farmers and shops mean food has to be transported further, plus sale of out-of- season produce means more air miles
• Car use and traffic — 1 in 10 car journeys in the UK are to buy food. Work for DEFRA suggests that car use for food shopping results in costs to society of more than £3.5 billion per year from traffic emissions, noise, accidents and congestion.
• Waste (packaging and food) — grocery packaging still makes up roughly a quarter of household waste.11

The table below shows how we have reached the rating, and why some companies did better than others:
(click on the table to see a larger version)

Best

Two of the three top-scorers, getting our best rating, are Musgrave Group (owner of Budgens and Londis) and Marks & Spencer, who also received our best rating last time.

The Co-op now receives our best rating, up from a middle last time, due to its inclusion of dated and quantified future targets for reducing its energy consumption and waste and obtaining energy from renewable sources.

Middle

The middle-scorers all missed out on a top rating due to their environmental reports not having been audited by an independent auditor.

Ethical Consumer requires this for its best rating as it gives us more confidence in the figures being quoted by companies. One exception is Tesco, who had two dated and quantified future targets in their environmental report, which had been audited, although the rest of the report hadn't.

It didn't qualify for our best rating since these two targets were both to do with the company's carbon emissions. Ethical Consumer would expect auditing of an entire report, or of several dated and quantified targets across all areas of environmental impact, in order to award a best rating.

Worst

All supermarkets who supplied no environmental reports, or who had none on their websites, received our worst rating.

There is, again, one exception — Booths do not publish an environmental report, but do have published targets for reducing packaging and air freighting of goods and, as a result, the company gets a middle rating.

In the three years since we last covered supermarkets, several have not made any moves to report on their environmental impacts: Aldi, Costcutter, Farmfoods, Iceland, Lidl, McColls, Netto and Spar.

With climate change being such a pressing issue, these companies are well behind the pack and have some serious catching up to do.

Price.. the best kept secret?

Supermarkets have long been loudly competing over price, each using advertising to directly compare and undercut one another. They're now being accused of hiking up the price of food more than that of inflation.12

Many people believe supermarket food to be cheaper, but this is just a line we've been fed by the supermarkets themselves.

Through careful advertising, and placing of competitively priced loss-leaders, supermarkets are able to sneak up and hit us where it hurts for other products whose value is not so well known, and where they may actually be charging more than small independent retailers on the high street.

According to an article in the Telegraph this year, red peppers at Sainsbury's cost £5.87 a kilo — far in excess of the average £3.45 at the independent shops — and Tesco was charging £8.87 for a kilo of Chilean cherries, considerably more than the average £6.81 that traditional greengrocers were charging.10

Policies on products

The National Consumer Council's (now called Consumer Focus) 2006 'Greening Supermarkets' report sets out the main areas supermarkets should be looking at regarding products they sell in order to help consumers make 'greener' choices.3

These are:

Food Transport: reducing its impact on climate change (seasonal food)

Waste: action to reduce, reuse and recycle (recycled content and carrier bag use)

Nature: supporting sustainable sourcing (fish and timber)

Sustainable farming (addressing pesticides and organic methods)

This table shows our findings on supermarkets' policies:

Genetic engineering

None of the supermarkets in this report can guarantee that all their meat and dairy is GM free, although Sainsbury's and M & S lead the way in offering a range of non-organic animal products that are produced without the use of GM animal feeds.

Organics

We asked all supermarkets for their policies on stocking organic produce and while most are keen to make all the right supportive noises, few seem prepared to stick their necks out and commit to increasing their range of organic produce within a certain time frame.

Waitrose was the only one to make a dated commitment, while Booths seemed to have a genuine dedication to sourcing organic produce it didn't set itself any targets.

Budgens, for a store of its size and type, stocked an impressive range of organic produce, although, again, it did not set any targets.

Chemicals and pesticides

The Co-op, Marks and Spencer, Sainsbury's, Somerfield and Waitrose were the only supermarkets to have decent policies which showed a genuine commitment to reducing the use of chemicals and pesticides in their supply chains, naming ones to avoid and researching further ones to be put on their banned lists.

M & S had, in addition, awarded cash prizes to the best supplier projects to reduce pesticide residues.

Local produce

Again, as with organic produce, supermarkets are all keen to link themselves with local suppliers. However, with Wal-Mart describing local food as 'a hot marketplace trend', it's hard to believe that this is a response to climate change and the struggles of small farmers.4

It's easy to bung a sentence up on a website, but the ones who've set real targets to increase stocks of local food are Booths, Tesco and Waitrose.

Trees

We found that Waitrose and Tesco are using FSC-certified timber for their garden furniture and tissue paper.

All Sainsbury's own-brand tissue is certified by the FSC and Marks & Spencer stated that currently 25% of its total wood use was FSC certified and 16% was recycled, but it had set a target to use entirely FSC-certified (or where FSC is not available, an equivalent independent standard) or recycled wood by 2012.

The best of the bunch was Morrison's, who said 100% of its garden furniture, own-brand tissue paper products and marketing materials were FSC certified.

Asda had no real policy, stating that it was using FSC-certified timber in its garden furniture and preschool toys "where appropriate".

Water use

With water footprinting now becoming as much of a pressing issue as carbon footprinting, we asked what the supermarkets were doing to measure their use of this precious resource.

It seems to take quite a while for emerging environmental issues to be established among supermarkets' policies, as most made no mention of it in their environmental reports. The ones that did are M & S, Morrison's, Sainsbury's and Tesco.

Asda has cheekily asked suppliers to measure their water footprints, discussing embedded water (i.e. water footprints from further back in the supply chain at producer level) in their environmental report, but not mentioned doing this for its own.

Fish

The supermarkets who had really good fish sourcing policies are Asda, Morrison's and Waitrose.

Marks & Spencer and Sainsbury's had positive ones, as did Somerfield. However, the information found on Somerfield's website was from its 2004/5 Annual Report and Accounts and when Ethical Consumer rang them to ask for a more up-to-date policy, we were referred back to the website.5

Fairtrade products

In rating supermarkets for this report, we asked them all whether they had any policies on stocking Fairtrade produce. Last time we rated supermarkets in 2005, the popularity of Fairtrade was just taking off.

At that time, the Co-op was the best performer in this field, having converted all its own-brand tea, coffee and chocolate to Fairtrade.

Since then, the label has become yet another ethical accolade for retailers to scrap over, with Sainsbury's overtaking, and now having the highest market share of Fairtrade product sales.9

In order to sort the glory-chasers from the dedicated Fairtrade enthusiasts, we gave a lower rating in the workers' rights column to any supermarket which hadn't set future targets to increase its range of Fairtrade products.

With all the above policies, the discount stores and convenience stores bring up the rear with no discernible efforts being made to tackle these issues at all beyond the stocking of a few ethical products.

Animals

Animal welfare

Hugh Fearnley-Whittingstall's TV campaign earlier this year prompted many supermarkets to stock more free-range chicken, but how do other animals fare in supermarket policies?

Ethical Consumer found that the companies with the best policies on animal welfare were M & S, Sainsbury's and Waitrose. However all of them still sell factory-farmed meat.

Compassion in World Farming rated the 8 major supermarkets in 2007 and ranked them as follows:
1. M & S
2. Waitrose
3. Co-op
4. Sainsbury's
5. Tesco
6. Morrison's
7. Somerfield
8. Asda

Animal testing

Since our last Supermarkets report there have been ups and downs in the area of animal testing.

The Co-operative has now signed up to the BUAV human household products standard as well as the BUAV humane cosmetics standard and Marks and Spencer's has since signed up to both.

Tesco, disappointingly, is still yet to reinstate a fixed cut-off date for all of its own-brand products. It has introduced a 1990 fixed cut-off date for its bNaturals range of toiletries and its Naturally household range. However, Ethical Consumer is critical of this niche ethical product approach and expects ethical policies to span the company's whole supply chain.

The policy table above explains the scores on the main table in more detail. It is clear that there is much variation within the companies that do have animal-testing policies, as well as many supermarkets with no policies at all.

The Co-operative, Waitrose, Costcutter and Netto all receive a half mark on the main rating table as although they qualify for a 'best' ECRA rating for their own-brand products (i.e. they have a fixed cut-off date) they also retail products made by companies known by ECRA to be actively testing their products on animals (i.e. most of the 'big brand' products).

People

Supply chain policy comparison

As the main rating table shows, there is wide variety in the sector on supply chain policies.

However, within the larger supermarkets (Asda, Co-op, M & S, Morrison's, Sainsbury's, Somerfield, Tesco and Waitrose) all except Somerfield, Morrison's and Asda receive a best rating under our current scoring system.

Morrison's scored middle but may have scored best if it had made available its Ethical Trading Code.

Asda scored middle as it does not state whether or not it used NGOs, trade unions or independent third parties in its monitoring/verification process.

Somerfield scored worst as its supply chain information was not available.

Within the frozen food and convenience stores (e.g. Farmfoods, Spar), Londis and Budgens stood out as actually having a supply chain policy, although it was not stringent enough to move their rating above worst.

The larger supermarkets have some of the most advanced supply chain policies we have seen, but this doesn't mean that they're easy to compare.

Most demonstrated a mature understanding of the issues by, for example, looking beyond their first tier suppliers or beyond their own-brand offerings. However, assessing the impact and scope of these activities was not straightforward.

It's a clever PR move to be involved in a ground-breaking living wage project, but this is perhaps not as helpful as the less newsworthy approach of assessing risk in the whole supply chain and acting accordingly.

For example, few big supermarkets provided information on what percentage of their first tier suppliers they had monitored or verified. M & S was probably the best, disclosing that of the 953 food suppliers on its database, 90% had up-to-date assessments.

There was also evidence that the pitfalls of third party commercial auditors were being realised, with the large supermarkets generally assessing working conditions by using a mix of their own staff, commercial auditors and local NGOs/trade unions.

Crucially, supply chain policies only have any real meaning if they are backed up by ethical purchasing practices. In general, scant information was provided on this subject, however, Ethical Consumer does know that there are good examples of ethics being incentivised in the buying process of some supermarkets, but until this information is made public, consumers are powerless to reward a supermarket on this basis.

The reality check is that whilst in the last 10 years' supply chain issues have shot up the agenda and considerable investments have been made in this area, workers' wages have continued to drop and their hours increase dramatically.

With this and massive supermarket profits in mind, there's still a long way for them to go.

Unsurprisingly, the hard discounters Aldi, Lidl and Netto again failed to deliver in this category, not responding to our request for their policies or displaying any online.

Local shops

Friends of the Earth is running a 'Shop Local First' campaign to raise awareness of the benefits of using independent shops and get consumers to shift at least some of their shopping back to them.

They say that,
"local shops boost the local economy, provide genuine choice and are a good environmental option. The most important thing you can do is to buy more from your local shops — choosing local products wherever possible."

FoE is also asking people to run Shop Local First campaigns in their own areas.
"This could be anything from asking shops to displaying our leaflet and poster to starting up a loyalty scheme."

For more info visit www.foe.co.uk or call 020 7490 1555

Buying from local shops also helps the poor and elderly in most communities by keeping facilities open that might otherwise close. These demographic groups are the most likely to be without access to cars allowing them to shop further afield.

It could also be argued that, despite the fact that they also tend to lack any policies, small, 'convenience' shops are better than the large multiples because at least they encourage shoppers to visit other local shops at the same time, due to often being situated in town centres rather than the out-of-town locations with sprawling car parks preferred by the bigger players.

Company Profiles

Israeli Boycott
Asda, Co-op, M & S, Morrisons, Sainsbury's Somerfield and Co-op supermarkets are the subject of a boycott call by the BIG campaign, for stocking Israeli goods.16

Aldi Group
Aldi Group has been heavily criticised for a range of serious workers' rights abuses in factories in Bangladesh, China and Indonesia in the last few years.13

According to the March 2006 issue of Pesticides News, Aldi had performed 'particularly poorly' in a round of tests carried out on fruit and vegetables from a range of Dutch supermarkets to detect pesticide residues and on the quantities of organic produce available to those wishing to avoid pesticide contamination.

Aldi was said to have been found to be selling strawberries containing endosulfan, a pesticide banned in Holland since 1987. In response to the campaign, Aldi was said to have stated that it would be introducing better standards, including de-listing suppliers found to deliver pesticide-contaminated produce.14

A/P Moller Maersk
Moller Maersk, which owns Netto, receives negative marks under our climate change category for its involvement in oil extraction.

Maersk, another subsidiary of the company, has been criticised for workers' rights abuses after one of the company's workers in China was fined repeatedly and then badly beaten by security guards for jumping a queue in the canteen.

The worker was allegedly beaten until he was bloody at which point other workers intervened which resulted in a riot. Allegedly this was one of many cases where workers had been fined heavily and suffered physical abuse.15

Bibby Line Group
Bibby Line Group has this year taken on ownership of Costcutter. The company receives negative marks because it operates offshore oil storage and drilling units.

Lidl
Lidl has been accused of spying on its staff and other harassments of its workforce.

One particularly disturbing allegation came from workers in the Czech Republic who, during their monthly period, were forced to wear white headbands whilst on duty so that supervisors could identify them as they were the only workers allowed to go to the toilet without special permission.17

Also in the Czech Republic the company also had more than 100 trees cut down without permission because they were blocking the view of one of its stores from nearby roads.17

Somerfield
Somerfield Group, soon to be owned by the Co-operative Group, has no more recent policies on its website than 2005, did not reply to our requests for information and wouldn't give any over the phone.

However, ECRA expects this to change with the Co-op in the driving seat.

Tesco
Tesco plc is also being boycotted for putting RFID surveillance chips in its products.

The company's Thai subsidiary, Tesco Lotus, was also recently suing a journalist and former MP for criticising the company for its corporate tactics.

In the UK Tesco had been accused of using 'deeply chilling' tactics to silence its critics.18 Tesco claimed to be seeking a public apology.

According to CSR Asia Weekly Vol.4 Week 18, a headline in the Daily Telegraph on April 25th, 2008 stated, 'workers at Tesco paid just 8p an hour'.

An investigation by the publication discovered that dozens of people subcontracted to work up to 80 hours a week in Tesco's supermarkets in Malaysia found themselves employed in circumstances which met the UN definition of forced labour. The article claimed that some employees were earning as little as £20 per month for up to 360 hours work after deductions.

ASDA
US campaign group Feeling Blue Seeing Red said it was calling a boycott of Wal-Mart when it was reviewed by ECRA in July 2008.

Feeling Blue said this boycott call was due to Wal-Mart's transgressions of local, state and US laws, anti-union activities, support of overseas sweat shops, and adjusting its retail philosophy to accord social conservative priorities.

It is also subject of a boycott call by the BIG campaign, for stocking Israeli goods

Other ways to avoid supermarkets

Start a food buying co-operative — club together with friends to buy organic and Fairtrade foods for less from wholesalers like Suma (www.suma.co.uk, 01422 313848)

Organic box schemes often deliver groceries as well as fruit and veg

Farmers' Markets are springing up all over the UK, find one near you (www.farmersmarkets.net, 0845 45 88 420)

Use local shops (see Friends of the Earth campaign above)

Further reading and links

Food Ethics Council

Tescopoly

Friends of the Earth

Competition Commission

Naturewatch Compassionate Shopping Guide costs £3.00 and can be ordered online at Naturewatch website, by ringing 01242252871, or sending a cheque to Naturewatch, 14 Hewlett Rd, Cheltenham, GL52 6AA.

BUAV's 'Little Book of Cruelty Free' can be ordered online for free or by ringing 020 7700 4888.

References

1 Groceries Market Investigation, Competition Commission, April 2008, p.5
2 'Who Pays?', Action Aid report, page 16, April 2007
3 'Greening Supermarkets', National Consumer Council, 2006
4 http://walmartstores.com/Sustainability/7985.aspx, viewed by ECRA on 20/11/08
5 Telephone conversation with Somerfield representative, 19/11/08
6 'Supermarkets come in from cold as part of low carbon revolution', Guardian, 25/10/2008
7 www.aldi.co.uk, viewed by ECRA 20/11/08
8 "A Raw Deal", Traidcraft 2007 supermarkets report, p.1
9 www.organicmonitor.com, viewed by ECRA on 20/11/08
10 "3,000 greengrocers lost in last decade", www.telegraph.co.uk, 08/06/08
11 www.tescopoly.org viewed 19/11/08
12 Cost of a shopping basket soars in the 'phoney' supermarket price war: James Thompson and Sam Kriss The Independent Saturday July 2008
13 See e.g. The SUDWIND Institute 'Aldi's clothing standards - discount buys discounting standards?' 2007
14 Pesticides News:71 (March 2006)
15 www.rfa.org: Workers riot at Maersk factory in Southern China 5 February 2008
16 http://bigcampaign.org/index.php? page=boycott_israeli_goods viewed 18/11/08
17 UNI Global Union website www.union-network.org viewed 18/11/08
18 CSR Asia Weekly Vol.4 Week 19 7th May 2008
19 Discount supermarket sales rise. BBC website 10/8/08

---