Tesco: Supporting innovative start-ups to cut carbon and increase biodiversity

At a glance
Who: Tesco and WWF
What: An ‘Innovation Connections’ programme to support sustainability-focused start-ups
Where: Farms across Tesco’s supply chains in the UK and Spain
When: The project launched in May 2022 and has now concluded
Why: To help Tesco achieve a net-zero value chain by 2050 and have a net benefit to biodiversity

The challenge:

Agriculture is a sector acutely impacted by climate change and nature loss. Without stable weather patterns, healthy soils and an abundance of pollinators and other biodiversity, food production declines.

However, current industrial food production methods are actually driving the climate and nature crises. The Intergovernmental Panel on Climate Change (IPCC) estimates that around a quarter of global annual greenhouse gas emissions result from agriculture and land-use. It also attributes 75% of deforestation by area size to date to expanding food and drink production. Moreover, in most regions, more than 70% of freshwater is used for agriculture.

The solution:

Tesco has set a long-term goal to achieve net-zero value chains by 2050 and this covers emissions generated on farms. It has also updated its supplier environment policy to set enhanced expectations on biodiversity.

The supermarket has worked with NGO WWF since 2018 towards a shared ambition of halving the environmental impact of the average shopping basket.

Part of Tesco’s delivery plan for these targets involves supporting innovative, external start-ups to trial and scale their sustainability solutions on farms in its supply chains. Tesco and WWF’s Innovation Connections programme awarded five start-ups with funding of up to £150,000 each and connected them with businesses across the Tesco supply chain.

How the project works:

Start-ups were encouraged to apply to the initiative in early 2021 and the winners were announced in May 2022. Funding and business connections were provided and facilitated over the following months, with Tesco recently (autumn 2023) posting a progress update.

Agrisound tested its AI-enabled audio devices across three citrus farms in Spain and four apple orchards in the UK. These devices enable farmers to track the level of pollinator species visiting, without disturbing the insects. There are hopes to also use the technology to monitor fruit fly levels and, based on these findings, only use the necessary amount of pesticides.

Similarly, 15 farms across the UK tested AI-enabled birdsong recording devices from Chirrup.ai. This will assist the farm in establishing baseline data on bird levels, paving the way for tracking across one farm or a whole portfolio.

Elsewhere, Lincolnshire-based potato farmer Branston trialled novel low-carbon fertilisers developed by CCm Technologies and Andermatt. Specific application guidance was developed to ease the transition away from traditional fertiliser.

Future By Insects worked with Hilton Foods, Greencore and Fera Science to achieve a proof of concept for replacing soymeal in animal feed with microalgae and insects, thus reducing the amount of land needed for production. The start-up claims the process has the ability to become carbon-negative.

Lastly, Farm Carbon Toolkit has worked with RBO organic to enhance the functionality of its Scope 3 (indirect) emissions measurement tool. The firms will work together next year to track any year-on-year changes in emissions.

The results:

Tesco has not disclosed any figures regarding carbon savings and biodiversity increase. This is likely because it is early days for some of the trials which are, in the grand scheme of things, fairly small-scale. But the trial is getting farms more prepared to measure and disclose their emissions and biodiversity levels.

For example, Chirrup.ai’s trials revealed that the average farm is visited by 34 species of birds and helped the farms establish baseline biodiversity data.

It is often said that measurement is the first step to management and managing nature and emissions will be crucial if suppliers are to play their part in the delivery of Tesco’s overarching sustainability targets.

The business benefits:

The trials have built farmer confidence in the application of innovative technologies like insect-based animal feeds and alternative fertilisers; it is crucial that they know the switch can be made without negative impacts to production levels or profit margins.

Branston’s agronomy team have, for instance, stated that they now have the confidence to recommend a rapid expansion of the use of alternative fertilisers across the business’s potato supply base.

Tesco’s lead nature and forests manager Alice Ritchie said that innovations are “critically important when it comes to building a more resilient, sustainable and productive food system” – so they need support to rapidly scale in the real world.

Ritchie foresees a “huge potential” from start-ups to help Tesco “cut greenhouse gas emissions, enhance soil health and water quality, and provide a clearer picture when it comes to monitoring biodiversity in our supply chains.”

Investment & savings

Tesco and WWF set aside up to £150,000 for each of the five start-ups, bringing the maximum total project cost in terms of grant funding to £750,000.

Industry context

Every major supermarket in the UK now has a net-zero target aligned with the national 2050 deadline or set sooner.

Indeed, WRAP and WWF launched a collaborative forum on net-zero value chains for food retailers in March 2023 and secured commitments from businesses representing an 80% share of the British grocery market.

As such, the hunt for innovations that could help cut carbon in supply chains is a priority not only for Tesco but its competitors too.

Morrisons has worked with its egg supply chain to implement insect-based feed from Better Origin. This, combined with renewable energy use and carbon insetting at the farm, has resulted in eggs badged as carbon neutral.

Similarly, Sainsbury’s has enhanced cattle breeding and animal management practices on some beef farms to enhance efficiency. The result are beef products with a carbon footprint up to 25% lower than the supermarket’s traditional ranges.

Third-party brands vying for supermarket shelf space are also increasingly backing green innovations. FAIRR recorded record levels of investments in plant-based feeds and products in 2022, for example. And consumer goods giants now working to deploy regenerative agriculture innovations include Unilever, PepsiCo, Mars, Danone and McCain Foods.