Corporate Social Responsibility Issue Faced by Tesco

This report analyzes the CSR issue faced by Tesco and discusses the importance of CSR and sustainability. It also compares Tesco's CSR practices with other retailers and provides recommendations for future improvement.

Retail Issues and Applications

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Presenting important aspect of CSR issue...................................................................................4
Discussing the current issue with relevant theory........................................................................6
Tesco tackling CSR and sustainability in its practices................................................................7
Comparison of CSR and sustainability of Tesco and other retailers...........................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Retail business are directing proper efforts of marketing so that final needs of the
customers could be fulfilled in the best manner. The present report is based on CSR issue faced
by Tesco Plc that is British multinational company selling variety of consumers goods across
different regions. Further, the report will critically analyze the growing importance of corporate
social responsibility (CSR ) and the lack of fulfillment by many of the UK companies. Moreover,
the study will discuss this issue with the support of relevant CSR theory along with analyzing
ways through which Tesco is overcoming such issues. Also, a comparative analysis of two retail
firms facing similar issue will also be covered under this report. Lastly, certain recommendations
for future improvement in operations of the business will also be discussed in detail.
MAIN BODY.
Presenting important aspect of CSR issue.
According to Zeisel, S. (2020) Corporate social responsibility is self-regulating model
that helps the business firms in becoming socially accountable to its public and shareholders.
Also, through this model the firms are concern towards concentrating the business efforts in
enhancing the society and environment rather than degrading it. Moreover, it is seen that
consumers in current era are also focused in purchasing those products that are more Eco
friendly and are made for well-being of the individuals. Furthermore, it is seen that even big
companies like Tesco also had faced this issue in the past and failed in maintaining the
environmental standards in selling some of its popular products. Also, it seen that companies that
have practiced CSR responsibly are able to develop better customer relationship and brand image
in the market. Furthermore, employee retention is also very high and workers are motivated and
satisfied while carrying out the daily activities of the firm. Moreover, Almatrooshi and et.al.,
(2018) stated that CSR practices could be carried out in various forms such as through
environmental efforts, philanthropy, ethical labor practices and volunteering etc. While taking

into account the important aspect of the CSR it can be said that companies need to launch
various program's and take initiatives in making aware about the ethical business practices that
are being followed over the years so that certain improvements could be taken on time.
Also, some companies undertake the CSR activities only for the marketing purpose and
as part of marketing scheme. However, these firms are not able to gain competitive advantage in
the long run as it is only consider as one time act in front of consumers and thus only degrade the
sales and revenues of the firm in the future. Further, it is important that CSR activities are
monitor on regular basis so that negative consequences are not faced either by the government or
any other business parties later on (Tanimoto, 2019). Furthermore, developing the sustainable
practices within the workplace help the companies in balancing all types of long term profits.
Also, sustainable practices could be in form of cutting down carbon emissions, lowering down
the total energy consumption, and ensuring proper disposal of physical waste etc. so that certain
goals of business could be achieved in systematic manners.
In context of Tesco has been seen that though company is operating on large scale but it
had failed to fulfill certain social responsibilities that is essential for running the business in ever-
changing business environment. Moreover, in certain reports the quoted firm has been
considered as socially unethical for the people at the workplace, environment, animals and
politics etc. Further, in detail it can be said that Tesco workers were being exploited and treated
unethically in various recycling centers and factories. Also, the quoted firm had been using
various toxic and risky chemicals that only harm the natural environment and people living
across various regions in UK (Christensen, Hail and Leuz, 2018). Moreover, the company had
also been pointed out for doing animal testing for their own branded products and selling the
same in various markets of the world. Furthermore, Tesco is using various tax avoidance
strategies so that maximum revenues could be generated and invested in other important areas.
Thus, from above all the unethical practices Tesco had been fall several times into legal issues
and problems by breaking certain laws and also faced certain criminal charges. Also, by not
following the CSR practices employee performance is also impacted to the great level and most
of the workers resist in taking certain responsibilities due to the lack of trust and fear of threats in
final outcome (Fernández‐Gago, Cabeza‐García and Nieto, 2018). Moreover, this has also
damaged the company credibility and customer base that has been developed over the years.
Further, CSR is long termed process that need to be followed regularly to achieve future benefits

and for this purpose Tesco need to develop activities with help of its employees to tackle all kind
of sustainability issues so that better business image of the business could be maintained.
However, currently is working on developing community programs and environmental policies
so that good working conditions and healthy living lifestyle could be promoted across various
regions. Also, it is introducing products that are environmental friendly and are according to the
current needs of the majority of the people (Galvão and et.al., 2019). Hence, it can be said that
corporate social responsibility is part of every business firm irrespective of the sizes of the
business and thus need to be strictly followed by companies either in short or long term
measures. For instance another example of bad CSR practice of Tesco is that the firm is failure to
understand the cultural differences and trends in other countries thus leading to bad management
of people at workplace. However the firm is continuously striving to incorporate certain systems
that would reduce the overall global problems of the nation.
Discussing the current issue with relevant theory.
Being a big retailer in the grocery sector Tesco is concern in providing variety of
consumer goods at low prices. Further, the quoted firm also ensures that trust and respect is built
among the workers and customers so that success of the business could be celebrated for longer
duration (Christensen, Hail and Leuz, 2021). Also, little help plan is developed by the firm
towards the approach of sustainability while taking into consideration four pillars of the business
such as people, product, planet and places. However, the CSR challenge that have been faced by
the firm in past could be better overcome if the company has followed Caroll's corporate social
responsibility pyramid that is theory based on making the business economically profitable
through fulfilling certain social responsibilities in well-defined manner. Further, this model is
based considering the four key points such as economic, legal, ethical and philanthropic by every
business to become profitable in the longer duration. This model could be explained in detail
through the following points:
Economic :
By following pyramid structure, this first element is helpful for Tesco as it would be able
to pay and treat all its employees in fair manner and also sells goods at fair prices that would
help the business to grow in better terms. Moreover, by following such policies it would attract
more number of potential customers to buy certain goods of the company. Also, by fulfilling
such responsibility the firm would be able to gain profits which the primary motive of every

business firms (Gatti and et.al., 2019). Further, to fulfill this element Tesco need to closely
analyze internal and external factors' for the development of the business in right form.
Moreover, the firm need to keep in mind that all business efforts that are made to satisfy the
customer needs at the end should focus on earning higher economic profits.
Legal:
Taking into consideration the next element of these model legal responsibilities the firm
needs to follow all the laws in lay down by the government of the company strictly so that illegal
practices in the name of the company are not followed. Also, it gives sense of security to all the
customers that business is reliable in terms of quality and services and thus often leads to more
repeated purchases for the business (Font and Lynes, 2018). Furthermore, following the laws and
policies in strict manner not only lessens the burdens of the company to look into government
matters but also helps firm to improve the current operations (Carroll’s pyramid of CSR: taking
another look, 2022) Also, laws are different in the forms of federal, state and local regulations
that are required to be carry out in consistent manner. Further, through these laws the Tesco
would able to provide goods with minimum legal requirements.
Ethical:
Moreover, by following the third element of ethical responsibilities all the business
policies are made in manner that does not harm or affect any of the living beings or the planet.
Thus, through these policies employees of the company also remains motivated towards
fulfilling certain tasks as part of the business goals and better future (Castro-González and et.al.
2019). Also, through this Tesco would be able to conduct business operations through certain
moral values that are not mentioned in any law books. Thus, all the working of Tesco would be
done on the basis of ethical and societal norms so that rights and justice helps in guiding business
decisions.
Philanthropic:
Last in this model is philanthropic through which Tesco would be able to develop
programs that improves current lifestyle and standards of the public and employees so that better
relationships could be maintained which is essential for growth of any business. Thus, it can be
said that fulfilling certain responsibilities is voluntary part and is expected out of very firm that is
earning profits from the society (Yarram and Adapa, 2021). Hence, CSR initiatives should be

considered more as opportunities rather than threat by Tesco so that maximum contribution
could be given to the societies.
Tesco tackling CSR and sustainability in its practices
Tesco due to the issues which it has been facing in its lack of corporate social
responsibility has now started to adapt itself with certain CSR related practices. The approach
which this organization has taken is focusing on the efforts of the practical activities which have
been seen to make a difference (Diallo and Lambey-Checchin, 2017). This company has found
that Corporate responsibility is not additional burden or a distraction of the company from its
actual operations. These practices of Tesco has been tackled in different ways such as,
Managing CR through business:
In this way the Tesco has understood that business operations of this organization itself
have huge impacts on the social responsibility of the organization. Tesco has started to
implement the fact “the way we operate is responsible and safe” in its operations. This extra
sense of responsibility which is developed by this organization has helped it in gaining corporate
social responsibility in its business operations. Thus, now Tesco focuses more on providing
quality in its products as it promises in its marketing operations.
Listening :
For the past few years this organization has focused more on listening to the customers ,
staff, investors, NGO and suppliers (Edinger-Schons and et.al., 2019). The responsibility this
company has towards the society needs to start from its own stakeholders which are mentioned.
For gaining efficiency in social responsibility towards these stakeholders the business develops it
focuses more towards understanding their needs, issues and problems for helping them in ways
that are possible.
Economic :
The performance of this organization itself acts very beneficial for the economy. This
performance which is done by the organization directly or indirectly impacts the development of
the country (Stojanovic and et.al., 2020). This is how improving the business is form of
corporate social responsibility of Tesco. In order to ensure that the business is flexible in the
dynamic world of retail business, Tesco has also developed its customer’s services to provide
support to its practices.
Social :

Corporate social responsibility of Tesco focuses on treating people the way in which they
would like to be treated. In this section people are both in and out of the organization. For the
people in the organization this company provides training and development, pensions and
rewards & recognition. For people outside of the organization this company focuses on human
rights, health safety and healthy living.
Environment :
Tesco's responsibility towards the natural environment is to not satisfy today's needs at
the expense of being able to meet the tomorrow (Candelo, Casalegno and Civera, 2019). This
focuses on taking the practical approach to environmental sustainability. For the protection of the
environment this company focuses more and more over the energy efficiency and emissions.
Apart from this the organization all utilizes renewable sources of energy in the areas where it is
possible. For ensuring the CSR efficiency this organization commits itself to operational
recycling which helps the business in the minimization of the amount of waste produced.
Tesco has been able to develop sustainability in it operation with the help of the these
three ways,
Helping customers to eat more sustainably:
Tesco has found it a way of gaining sustainability through providing the customers with
products which are considered to be more sustainable (Alfnes, 2017). Providing the customers
healthy to eat is a very good way of developing sustainability in the operational management.
Tesco has been able to bring more organic products in order to make them better for the people
and the environment while still being affordable.
Restoring Nature in Food production:
Tesco believes that it is possible for the farms to produce good food and sustain jobs for
the farmers and also protect and restore the natural resource (Hoque, and et.al., 2018). Thus,
Tesco supports the farmers for utilizing the technology and methods which can be used for the
elimination of the deforestation for the products and ingredients of Tesco.
Eliminating Waste:
According to the analysation of the human consumption of the food it has been found that
1/3 of the food is wasted in the UK households (García-Sánchez and et.al., 2021). Tesco thus,
has started providing awareness about the waste which is created by the organization. This
company has also eliminated the risk of food and packaging from the agricultural sector.

Comparison of CSR and sustainability of Tesco and other retailers
Retailers in UK have understood the importance of CSR and sustainability which can
become a very big issue for their development (Slade and Alkhalaf, 2021). This is the reason
why these Giants have been seen to compete even in the CSR and sustainability activities in this
market. This is due to the customer recognition which CSR and sustainability provides to an
organization is the key towards influencing the customers decision-making.
Sainsbury which is one of the biggest competitors of Tesco in UK have spent £1billion
for improving its sustainability in 2020 (Sainsbury’s invests £1bn in sustainability push, 2021).
This organization has invested this amount in targeting the amount of British foods it sells in the
market and reducing the total carbon emission by 30% in comparison to its previous emissions
(Jones and Comfort, 2020). This is the method in which Sainsbury has been able to develop the
business of this organization with the management of sustainability in its operations. In
comparison to which Tesco pledged to achieve zero discharge of the hazardous chemicals in
2020 in its operations. However the company did not apply this on its electronic products. Tesco
previously utilized plastics for its packaging which was then banned and restricted. However,
now Tesco has been able to commit itself towards minimization of the waste it produced through
a robust recycling programme. With the help of this programme Tesco was able to recycle the
87% of the plastic waste it produced.
Walmart which is one of the biggest competitions to Tesco in different markets has seen
sustainability in its regular business practices. This organization has ensured that it does not
provide any gender preferences in its discussions (Walmart CSR Overview, 2017). This helps
Wal-Mart in showing its sustainability towards the equality in the gender. It can be said that this
organization also focuses saving trees which are very important part of the CSR activities. The
sustainability index of the suppliers of Wal-Mart has increased with the help of its forestry
program which helps in the preservation of the 4.65 acre of forest. Tesco on the other hand in
comparison to the Wal-Mart does not have such a great image in the employee management of
the organization which helps the business in the organization of the business (Jones, Comfort and
Hillier, 2018). Tesco has the history of paying the female employees less salary in comparison to
that of their male employees. After such acquisition this Tesco modified its human rights policy
which was towards the addressing the employment conditions that included wages, hours,
freedom of association, health and safety, discrimination and child labour. This policy was

created to stop all these issues from occurring in store of Tesco all around the world. Even for
the environment Tesco has shown certain commitments which were to reduce the consumption
of energy and it was successful in does so as it spend £6 million on energy saving schemes which
contributed to reduction of energy consumption and also increased the sales of the organization.
Mark & Spencer which gives Tesco great competition in the fashion products developed
a CSR activity in the name of Plan A. This helped the employees and suppliers of the
organization see the link between how activities of reducing energy use and promotion of fair
trade helped the company in allowing the stakeholders in 10% of the customers towards being
committed in the playing a leadership role towards their sustainability (Liu and Jung, 2021). This
plan was also to tackle the climate changes, reduce waste, utilize sustainable raw materials, trade
ethically and also help the customers to lead a healthier lifestyle (Lizcano-Prada77 and de Haro
PhD, 2018). As successful as this strategy of M&S was Tesco was also not too far in its CSR
practices, Tesco at the time was the organization which founded Ethical Trading Initiative(ETI)
which was the important aspect of the ethical trading policy which was applied in many
businesses. As per these ETI the following standards where needed to be followed,
 Employee is free to choose its employment.
 Freedom of an association’s power towards collective bargaining needs to be respected.
 Workplace needs to safe and hygienic.
 Child Labour is prohibited.
 Working Hours are limited and not excessive.
 Discrimination is prohibited.
RECOMMENDATIONS
In order to improve the CSR practices by Tesco it will be very essential for them to align
their mission and values towards the multitude of values which are considering the participation
of community (Grmelová and Zahradníková, 2019). This is also essential for the business to
align its services with the company core service products. It is going to be the most effective way
of developing the business partners. For better CSR it is very important for the business to bring
new efforts towards going green. Therefore, the volunteering a team building activity is
considered to be special clearance for the creation of brand image.

CONCLUSION
With the help of this project it can be concluded that corporates social responsibility and
sustainability is an issue for Tesco as organization which it has understood and reacted towards
its improvement with different set of activities for gaining a competitive advantage in the market.
In this project the details about the CSR and sustainability and its importance for the retailer has
been understood in which Caroll's corporate social responsibility pyramid has been understood
for explaining the ways in which profit can be made by the organization through CSR. This
project was able to analyse the CSR and sustainability issues of the company with relation to the
which showed how impactful Tesco has been in influencing the changes in its organization. This
project also discussed the ways in which Tesco has tackled the issues it has been facing in the
fields of CSR and sustainability. This project also provided a detailed comparison of the CSR
and sustainability practices of other retailers in comparison to Tesco. This project was also able
to identify how efficient Tesco has been in the management of the CSR activities.

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