Tesco will become the first supermarket chain to assign a “carbon rating” to everything it sells in the latest attempt by a retailer to cash in on consumers’ concerns about the environment. The fifth-largest retail chain said on Thursday it would work with Oxford University’s environmental change institute to create an index to measure the carbon required to produce, transport and consume every product it sells.

Sir Terry Leahy, chief executive, said Tesco aimed to become a world leader in helping create a low-carbon economy and that effort would require a “mass movement” among consumers. “The market is ready. Customers tell us they want our help to do more in the fight against climate change,” said Sir Terry. “We have to make sustainability a significant, mainstream driver of consumption.”

Initiatives from Tesco and Marks and Spencer follow a sustainability push by Wal-Mart, launched in October 2005. The world’s biggest retailer said it would cut greenhouse gas output from its global network by one fifth by 2012, and spend $500m a year to develop environmental technologies. Environmentalists have mooted the idea of “carbon labelling” for some time but no retailer had responded up to now, partly because of the complexity of measuring the carbon required to produce each item.

The “carbon footprint” of a product includes the energy required for its manufacture, its packaging and transportation of the product to the supermarket shelves. Labels showing energy content could encourage shoppers to opt for lower carbon goods. This could boost local suppliers to Tesco stores and encourage manufacturers to cut carbon emissions in order to attract shoppers to their brands.

Tony Juniper, director of Friends of the Earth, applauded the move and called for Tesco to go further. “Carbon labels have a role to play in raising awareness of the climate impacts of individual products,” he said. “But to avoid confusion, these schemes should be mandatory and meet a common high standard. Products with unacceptable impacts should be banned.”

Tesco stopped short of M&S’s promise this week to become carbon neutral by 2010, pledging instead to reduce its carbon footprint by halving the average energy use across its 1,900-strong store portfolio by 2008, two years ahead of its initial timeframe

Tesco, which has a presence in 12 countries, also promised to halve emissions from its stores and distribution centres by 2020. The retailer said it would spend up to £500m during the next five years in reducing energy use. It has already put £100m into a sustainable technology fund. Its capital expenditure budget is about £3bn a year.

Sustainable consumption has become a hot topic for retailers over the past year as they look to win over the growing legions of shoppers who are expressing concerns about the environment.

Source: ft.com