Looking after our natural capital

August 2, 2018

Our Chief Customer Officer Andy Murray writes about how Asda is working with farmers and others to protect the environment for future generations

Asda has a long history of tackling sustainability issues head on. We take sustainability seriously because not only is it the right thing to do, but it also makes business sense. It helps us think smarter about how we do things, simplify where we can, and lower our cost to operate.

Alongside my role as Asda’s Chief Customer Officer, I’m also really proud to Chair the Cambridge Institute for Sustainability Leadership’s Natural Capital Impact Group. This group brings together the practical expertise of global businesses with the research and knowledge of Cambridge University – one of the most prestigious universities in the world – to look at how we sustain and improve our natural world for the long term.

Asda’s own work on natural capital – the term that’s used to refer to the world’s assets, such as water, soil and biodiversity – is already well underway.

Water

With regards to water, we have installed a number of measures to improve and protect local water quality, encourage biodiversity and bring about improvement in soil structure at the Elveden Estate in East Anglia, which supplies potatoes to Asda.

As part of this initiative, we partnered with the Norfolk Rivers Trust to plant reed beds on the edge of the farm to diffuse pollution run-off. These grasslands capture the nutrient-rich run-off from the farm and allow the sediment to settle, rather than flowing into the watercourse.

This is hugely important because excess nutrients from the fertilisers used by farms can change local ecosystems, threatening vegetation and, in this case, a rare and internationally endangered snail. The work we’ve supported is reducing diffuse pollution and protecting habitats to allow the snails and other vegetation to be conserved and ensuring sustainability of the whole ecosystem.

Biodiversity

Another example of a biodiversity project is some of the work we’re doing with our farmers in Suffolk.

Bees account for 20% of pollination, and British bees are in decline, so we’ve partnered with our farmers, Syngenta and Kings Seeds, to discuss how we create environments for bees and other pollinators to flourish.

In 2017, we launched a new biodiversity project to plant field headlands around potato and vegetable crops with a flower-rich, green manure mix. We’re really pleased that two of the farms taking part in this project have seen an increase in the insects in their sites, and one had even found that the Ash Furrow Bee has returned to the area – a species that had been thought to be extinct since 1987!

Soils

And then we come to soil. In conjunction with the National Institute of Agricultural Botany, we recently surveyed our UK suppliers of leafy salad, potatoes and vegetables to understand what actions they were taking to improve the health of their soils and identify where our expertise might be able to support them.

The results were really encouraging. Every single supplier is taking some kind of action, and 90% are actively testing to understand their soils in detail. Their suggestions on ways to improve soil health were excellent and we will be working with our suppliers to implement the ideas over the coming years.

Measuring Natural Capital

While these are great stories, one of the challenges we face is to accurately and reliably measure natural capital performance across the business to the same extent that we might measure the performance of other business assets. It’s a journey that we’re just beginning.

Lord Kelvin, himself a Cambridge alumnus, famously said that: “To measure is to know. If you cannot measure it, you cannot improve it. When you can measure what you are speaking about and express it in numbers, you know something about it.”

I couldn’t agree more with what Lord Kelvin said. If I look at Asda for a good example, it is best illustrated in how we manage our energy use. Our energy is monitored daily through Asda's dedicated Energy Bureau - to do this, it constantly monitors around 10,000 sub-meters to accurately measure energy use across our 600 plus stores. This means that when something isn’t working quite as it should, it is identified and investigated immediately.

It has also allowed us to bring our employees along with us too. For example, we noticed that stores with ovens weren’t always turning them off as soon as they could be, so we provided targeted training for bakery colleagues on the benefits of turning the oven off and saving energy. Through this simple change, we have made our stores 20% more efficient than they were in 2010.

And of course, efficient use of energy translates to a cost saving, which for us, means passing that saving on to our customers in the form of lower prices. This is an example of where effective measurement turned an expense into an investment.

So we need to apply this thinking more broadly to our fullest definition of sustainability and natural capital. That’s why I am delighted to see the leadership that the CISL Natural Capital Impact Group is providing to develop new measures to quantify natural performance.

The Healthy Ecosystem Metric is a new set of global measures developed to help companies better quantify their impacts and set targets or performance indicators to manage performance over time.

These measures are potentially the next step in providing the ability to measure natural capital performance and drive sustainability through the supply chain. The metric will help companies to advance their understanding of the connections between natural resources, their supply chain, consumer demand and the future value of their business, which, by anyone’s reckoning, is an important and valuable task.

Having this data available completely changes the conversation we have with our buying teams around why sustainability matters. It turns it into an ongoing, integral part of how we do business, and gives us the chance to measure the sustainability impact of our products across their entire lifecycle. There’s so much opportunity there.

I firmly believe that the business of the future will be held accountable for its use of and stewardship of its natural resources and you want to be ahead of the curve, or at least on the curve, otherwise you’ll be left behind.

That’s why we’re spending so much time working collaboratively with our farmers and suppliers, and experts across the world, to make sure that Asda plays its part in protecting and sustaining the world’s natural capital for generations to come.

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