Asda SustainabilityA Retail Perspective

Julian Walker-PalinHead of Corporate Sustainability

What ‘Sustainability’ means to us

“…Our mission of ‘saving people money so they can live better’ starts with low prices…but it doesn’t end there. It extends to being a leader in how we take care of our world. It means that Wal-Mart and our supplier partners must operate in a more socially and environmentally responsible way wherever we do business.”Mike Duke, President & CEO Walmart

“For us, sustainability is about building a better business. It is about making a positive difference in people’s lives and their communities. And it is about staying out in front of the changes that will take place in the world not just next month or next year, but for decades to come.”Lee Scott, Chairman of Executive Board Walmart

The global framework

Walmart 2005 framework

Sustainability strategy is a key driver of profitability

Holistic focus both inside and outside our business

ENERGYSupplied 100% by renewable energy

WASTECreate zero waste

PRODUCTSSell products that sustain people & environment

Sustainability

EDLC

EDLP

Need to tackle directs firstExisting buildings emit 21% less

carbon

Over 82% of store waste diverted from landfill - recycled or re-used

Transport fleet emits 52% less carbon – industry leading

27% packaging reduction

Directs only takes us so far…

Packaging

Agriculture

Water

Marine

Factories

Indirect Impact = 92%

2010 Signals a Change in Approach

Develop more environmentally preferable products

Help our supply base reduce impacts (water/carbon/waste)

Greater resource stewardship(water, deforestation, farming)

Could mean a fundamental re-design Inputs

Manufacturing processes

Investment hurdles

Start with iconic areas

Packaging material types

Transportation

We need to help our suppliers make this transition in partnership with us

Issues from a Retail Perspective

Not an easy transition but essential

Responsible Sourcing InitiativeGoal: Build a more environmentally and socially responsible supply chain

Initiatives:• Required demonstration of compliance with environmental laws and regulations

• Improved supplier energy efficiency

• Higher standards of product safety and quality

• Greater transparency and ownership

Will insulate from future shocks too

Global tool for Buyers & Customers Not a sole Walmart tool

Led by Academic Consortium

Buyer decision making tool Fair comparison between products

Simplifies a wide range of metrics

Customer information potential Unlikely to appear on packaging

Opportunity to use iPhones, PDAs etc

Sustainability Index

One global tool is the key

Goal to eliminate 20m tonnes of carbon by 2015 Announced Feb 2010

Most aggressive goal in the world

Focus on priority products carbon intensity x sales volume

19 key categories: food & non food

Lifecycle approach taken

Tackling Product Carbon

Transformational goal that will benefit our suppliers and our customers

Support farmers & their communities Increase products sourced from local suppliers

Expand education schemes like Farm Link

Improve health & livelihood of women in agriculture

Produce more food with less waste & fewer resources Reduce fresh food waste & utilise unavoidable waste using

sustainable methods by 10% farm to fork

Invest £99m in perishable supply chain

Deliver program disseminating R&D for beef, pork, lamb, dairy, produce, poultry

Sustainably source key agricultural products Sustainable palm oil focus

Develop global sustainable beef program

Sell only sustainable fish (as per Sustainable Fish Partnership)

Sustainable Agriculture

Umbrella group of targets to drive agriculture supply chain innovation

Issues on multiple levels:Carbon, Water, Food Scarcity & Energy

What does the future hold ?

How should we approach water scarcity ? Water scarcity versus ‘trade aid’

Footprint or watershed approach

How do we feed 9 billion by 2050 ? More food or simply less waste

Role of GMO

Peak oil Elephant in the room

Unsure how / quickly it will affect supply chain

Carbon management Mitigation versus adaptation

Lack of knowledge and need for partnerships on adaptation