Tesco Company Corporate Social Responsibility Issues

Document Type:Thesis

Subject Area:Management

Document 1

With the market share of over 28%, the company is the leading retailer in the UK. Regarding profitability, it occupies the third position globally and ninth place in revenue measure. With operating profit of £1,837m, sales of £51. bn and statutory revenues of £57. bn in 2016/17 financial year, the company is undoubtedly a large corporation, and like many other large corporations, the company may be indifferent when it comes to social interests and corporate interests (TESCO plc, n. d). Due to its dealing in variety of products most of which are consumables with high levels of wastes, the company faces several corporate social responsibility challenges in the countries it operates. While some obstacles can be the same in all countries, some problems are country specific. Elements of Pestle Analysis Tesco CSR issues are affected by various issues. The following Pestle factors affects CSR issues and are therefore challenges that the company face in the countries it operate in. Political Factors In the Seven countries Tesco operates, political conditions greatly influence the operations. Some countries employment legislations have encouraged the retailer to offer different categories of jobs to the locals (Balchin, 43-57). Tax rates and stability of countries also influence performance of this company. Tesco has played a role in creating jobs to people of the countries it operates in. Social Factors Trends in customer’s behavior have shown that customer prefers shop at one-stop shopping. Tesco has therefore increased its variety of products and it’s moving from selling food products only. Customers demand for goods is highly influenced by their beliefs which are affected by social conditions.

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People are becoming more concerned about health and Tesco is changing to accommodate the consumer’s needs. Environmental Factors Tesco is committed to continue reducing carbon footprint. It expects to reduce it by 50% by 2020. By the fact that the company did not do background checks on both the products and their suppliers means that it was guilty in regards to CSR. Environmental Issues Environmental issues touch all countries where the company operates as the company deals in grocery, clothing and other fast moving consumer products in all its stalls. One of the leading environmental issues is oil spillage. In 2014, Tesco’s petrol filling station in Haslingden lost 23500 liters from a fuel tank for 29 hours (Bowden, n. d). Electricity and HFC have combined potential to cause global warming of 3800 times more than the carbon dioxide.

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The third environmental issue is the issue of carrier bags. Although the company has made an effort to replace its non-degradable carrier bags with degradable ones, it has been found that the new bags are worse than the previous one because they do not entirely break down. According to one survey, the company dishes out approximately 500 million fully degradable bags a year (ET, n. d). This lead to public scrutiny as people expressed shock of the high level of food wastages. It is estimated that food wastage of Tesco and other food retails cost producers billions of money. Food wastage by Tesco has led to strain in the environment due to increased demand of food. Human and labour rights Tesco on July 2007 launched investigation on accusation that it was forcing its worker in Bangladesh cloth making retail to work for 80 hour in a week.

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Employees who were interviewed confessed that they were forced to work for 12 hours a day and at times the whole night. However, the use of fake brand was a breach of business ethics. Tesco Corporate Responsibility Strategies Tesco has come up with several strategies to deal with the corporate responsibility issues. The leading among the strategy is the strategy to deal with the greenhouse emissions as this is the leading global issue in the current times. One of the flagship strategies aimed at reducing greenhouse gas effect is building new stores with reduced greenhouse gas emission. To activate the strategy, the company developed what it referred to as a zero-carbon supermarket in Ramsey, Cambridgeshire, UK. The other area where the company commits to tackling CSR issue is through reducing food disposal.

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Since the company has limited control of the activities of its store, it has committed to ensuring that each store in all countries publishes its wastage on food operations. In UK stores, the company passed directive consumption was to go to waste. Additionally, it rolled out food surplus donation across all its stores. To ensure that suppliers play by the company rules and expectations, the company standardized its payment terms across the UK and central Europe. For example, it donated £13. million for the national charity in which it partners with the diabetes UK and British heart foundation. In regards to business ethics, the company in 2016 established a new and revised code of business ethics (Bowden, n. d). Besides, it revised its training programs adding income recognition, ant bribery provisions, and supplier codes.

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Part-time workers in the multiple retail sector: small change from employment protection legislation?. Employee Relations 16. Bowden, Helen, et al. “UK: Tesco Fined £8 Million For Environmental And Safety Offences. ” Mondaq. economictimes. indiatimes. com/news/international/business/unforgettable-bag-tescos-idea-of-fighting-plastic-pollution-in-malaysia/articleshow/63625642. cms. Fletcher, Nick. endsreport. com/article/25197/tescos-growing-pains-on-the-road-to-zero-carbon. TESCO plc. “ABOUT TESCO PLC. ” Tescoplc.

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