In 2018, excellent progress was made towards all four pillars of our 2020 Corporate Responsibility strategy: The Ocado Way.
Amid a year of increased public interest in the widespread use of plastic, we worked hard to make commitments and implement changes with positive, long-term environmental effects. We signed up to Courtauld 2025, and the UK Plastics Pact, committing to collaboratively reduce waste from food and plastic. We also signed up to Better Retail, Better World, joining other retailers in a commitment to tackle five applicable Sustainable Development Goals.
We won the following awards for our food redistribution projects – Global Good Awards 2018: Partnership in the Community Gold; LGC Awards 2018: Public/Private Partnership Winner; IRRV Awards 2018: Excellence in Innovation; City A.M. Business of the Year 2018.
Highlights for each of our corporate responsibility strategy pillars are featured below.
The Ocado Way: 2020 Strategy
By sharing our expertise in food, retail, logistics and technology, we aim to add value to our society now, and help the next generation achieve more. In 2018, we continued to promote digital literacy, road safety, healthy eating, and recycling. Building on our existing relationship with HMP Northumberland recycling Ocado uniforms, we supported an education project to upskill offenders and enable them to earn a formal qualification.
At Ocado, we passionately believe in the paramount importance of hands-on STEM education for inspiring the next generation of computer scientists. Code for Life, a non-profit initiative that delivers free, open source games that help all students learn about computing, has been widely acclaimed by teachers, parents and students alike.
In 2018, we continued to develop Rapid Router, our open source software and guidance resource, teaching Key Stage 1 and 2 children how to code. At the end of November 2018, there were over 99,000 registered users in the UK and over 160,000 globally; more than 3,000 schools have incorporated Rapid Router into their computing curriculum.
Building on the success of Rapid Router, in 2018 we soft launched AI:MMO, a Massively Multiplayer Online (MMO) adventure game that teaches secondary school children aged between 13 and 16 skills in Artificial Intelligence and Python coding. We plan to fully launch this game next year.
For the second year, we signed up to the Engineering Education Scheme, partnering with Monk's Walk School in Welwyn Garden City, Hertfordshire. Our Logistics Development and Engineering team mentored six A Level students, providing them with a special Ocado challenge to solve. Further, to celebrate the Year of Engineering, we partnered with the Engineering Development Trust (EDT) to create a Go4SET hub, engaging students from local schools in a real-world engineering project. Students aged 12–14 from five schools in Staffordshire and Hertfordshire designed an environmentally friendly factory using new and sustainable ways to create the energy it needs to run.
We continue to deliver road safety projects for primary and secondary schoolchildren. New for 2018 is our Road Safety Challenge tournament in partnership with Warwickshire County Council. This five-year commitment gives 80 schools the chance to win an Ocado Road Safety Trophy, along with a £500 prize for schools to spend on road safety equipment or initiatives. This project potentially reached 14,900 primary and secondary children in the area.
In autumn 2018, we published a second special edition of The Young Driver's Guide in partnership with First Car. This magazine helps reduce road risks for new drivers; 78,600 copies were delivered to 242 schools in Warwickshire, Hertfordshire, Wiltshire and Hampshire. These counties are CFC locations where we have a high presence on the roads.
Our five-year partnership with WRAP promotes recycling education projects for primary schoolchildren. This year we donated £130,000 using carrier bag funds to continue this work.
HMP Northumberland textiles factory has processed over 70 tonnes of used Ocado uniforms since our working partnership began in 2015.
We provide an environment where entrepreneurs in retail, technology and food redistribution can flourish. In 2018 we continued to find opportunities to encourage and reward entrepreneurial thinking.
Supply Ocado, our supplier application website makes our retail listing process more accessible for Small to Medium-sized Enterprises (SMEs). In FY 2018, 748 applications were made through our portal, and 20% of suppliers met with our Buyers.
The Ocado Primary Network is a team dedicated to improving logistics for small suppliers at launch, and to help them grow. Currently, 389 SMEs are managed by a dedicated full-time Ocado team, growing from 150 in 2017.
Britain's Next Top Supplier, our competition awarding a small supplier a £20,000 launch package and a six-month listing at ocado.com is now in its fourth year. This year, 87 businesses qualified for the competition; of seven finalists, 2018 winner Sweet Revolution launched on our webshop with a range of six products.
We continue to work on environmental data management with Ecometrica to provide a centralised data management system. We track carbon emissions from our CFCs, spokes and vehicles. We are expanding this to track all operational waste.
Being involved in this competition has been an amazing experience for us. It's enabled us to access a major retailer for the first time and also provided the means of promoting our products onsite, which we would have found very difficult otherwise. Everyone at Ocado has been very approachable and helpful, and we'll definitely be recommending it to other small companies.
Greenhouse gas emissions
This reporting period saw our absolute location based emissions (scope 1 & 2) increase by approximately 1.95%, due to our continued growth. Despite this, we have improved efficiency with a 33% decrease in our CO2 intensity-based figure against our 2012 baseline year.
As in previous years, the fuel for our fleet remains the largest contributor to our carbon footprint, accounting for 69.53% of our carbon emissions. Diesel used for fleet operations continues to be our primary carbon source. Electricity (scope 2) is the second main contributor, making up 22.28% of our emissions, with most of this centralised in our main CFCs. This year we purchased a significant number of renewable energy contracts. This is the second year we have reported a market-based figure alongside the traditional location-based method.
For the second year, we voluntarily submitted data to be assessed by the Carbon Disclosure Project. Last year we won their Best First Time Responder award with a score of C. We're extremely pleased to report that we have built on last year's success with an improved score of B. For the second year running we partnered with the Carbon Trust who have carried out a limited assurance engagement on selected GHG emissions data (table below) in accordance with ISO14064:3.
|GHG Emissions (tonnes CO2e)||2017/18||2016/17||2012/13|
|Scope 1 – Direct||87,614||82,305||39,530|
|Scope 2 – Indirect|
|Total Emissions (Location-based)||112,729||110,575||61,143|
|Intensity measure (tonnes CO2e/100,000 orders)|
Single-use plastic is something we've been reviewing for some time. It's increasingly a topic of interest for our customers, too. In April, we contributed £20,000 to become a founding signatory of the UK Plastics Pact. This industry-leading initiative is backed by WRAP and the UK Government; it tackles the issue of plastic as pollution, striving to create a circular economy for the material, preventing it from being wasted. By the end of 2018, we had successfully changed the main component packaging (such as the trays used for fish) on 45% of Ocado own-label products; we switched to widely recycled material and removed problematic PVC and polystyrene on these items.
We continue to explore alternatives to plastic carrier bags for deliveries, but as yet have not found a more energy efficient or effective solution for moving products through our automated CFCs. We continue to collect carrier bags from customers for recycling. The scheme is very successful and this year 89% of carrier bags were handed back for recycling. Read more about carrier bags and the proceeds from the Single Use Carrier Bag Charge in our Ocado Foundation section below.
In 2018 just 0.029% of food as a percentage of total sales was wasted. We're committed to ensuring no food goes into landfill; inedible food is sent to anaerobic digestion, and edible food is redistributed. We redistributed 1,721 tonnes of food surplus in FY18, with over 90 tonnes of fresh and ambient food surplus donated to food banks and charities through our Donate Food with Ocado scheme. Since the scheme launched in December 2014, we've donated over 180 tonnes of food, demonstrating our commitment to strengthening food partnerships in the past 12 months. We contributed a total of £18,000 to support the Courtauld 2025 Commitment, a voluntary agreement that brings together organisations across the food system – from producer to consumer – to strive for more sustainable food and drink consumption.
Our uniform recycling project with HMP Northumberland (described in Education) continues to grow, and has now prevented 70 tonnes of old Ocado uniforms from being sent to landfill sites.
As an online grocer, we have a natural connection with food. We've continued to focus on reducing food poverty in the UK, growing our food partnerships with food banks and charities. We've maintained our promise to encourage our customers to eat well by having at least 100 promotions on fresh fruit and vegetables at all times.
Fresh Fruit and Vegetables on Promotion 2018
To encourage children to think creatively and get excited about vegetables, we sponsored the 2018 Young Pea Chef of the Year. This nationwide competition challenged schoolchildren at both primary and secondary level to invent a recipe using peas. Over 200 children entered the competition and over 2,000 people voted to choose the winning three entries.
Donate Food with Ocado
For every £1 our customers give in Donate Food With Ocado vouchers, we give £2 worth of food to our Food Partners. Rather than food banks and charities being overloaded with overstocks, they choose what they need most from a long list of fresh and ambient products. In FY18, an additional two charities were brought into the scheme. Customers donated £0.6 million, and we donated 90.3 tonnes of food to our charitable food partners, bringing the total tonnes of food donated since the scheme began in December 2014 to over 180 tonnes.
We aim to conduct all of our business in an honest and ethical way. We take a zero-tolerance approach to modern slavery and expect our business partners to do the same. In FY18 we became sponsors of Stronger Together, a business-led initiative aiming to reduce modern slavery particularly forced labour, labour trafficking and other hidden third party exploitation of workers. With their help, we rolled out training to identify and prevent modern slavery to our teams. We have robust policies in place designed to convey the professional standards we hold and provide a framework through which incidents of exploitation can be reported. Our full modern slavery statement can be found on www.ocadogroup.com.
No donations were made by the Group to any political party, organisation or candidate during the period (2017: nil).
The Ocado Foundation
The Ocado Foundation launched in April 2015; it's the home of our charitable and fundraising activity, both internally and externally. We help employees across the UK make a difference at a local level. We do this through donations to multiple small, local projects and charities where impact will be greatest, rather than supporting a single national charity.
Matching our employees' fundraising and volunteering activity resulted in donations of just over £25,000 for charities and community organisations across the UK through the Ocado Foundation in the last 12 months. Ocado employees have volunteered more than 1,830 hours to a variety of good causes.
Legislation came into effect in October 2015 requiring a 5p charge on all new single use carrier bags in England. Given the aim of the legislation is to reduce bag littering and damage to wildlife, we believe this is best achieved by removing bags from circulation, and financially incentivise customers for their return through our Bag Buy Back scheme. During the period, we collected over 135 million bags from customers, preventing them from becoming litter in the first place. The Ocado Foundation is the custodian of the remaining funds from the carrier bag charge, which are used to support waste, litter and recycling charities across the UK. This further supports the desire of the legislation to see some of the money raised support environmental causes. This year we donated £130,000 of carrier bag funds to WRAP, supporting recycling education projects; £60,000 was spent on two additional refrigerated vans for our Food Partners, bringing our total number donated to ten. We also donated £50,000 to CleanupUK, a charity which helps people combat litter in their community.
We ask our charity Food Partners to use refrigerated transport when collecting fresh donations. This year we've donated an additional two refrigerated vans, bringing our total donated to ten, and paid for the dual branding, leasing, maintenance, tax and insurance on their behalf. Our Food Partners' van drivers have also completed our Driver Risk Management training programme, to help keep them safe on the road.
Our Food Partner DENS
Ocado donations provide quality produce enabling our residents at The Elms, our service users at our Day Centre, and those accessing the Foodbank to enjoy a healthy and nutritious diet. Without Ocado, we know there would be families going hungry each day in Dacorum so Thank YOU. We look forward to working with you in 2019.
DENS Chief Executive
For over 15 years, Dacorum Emergency Night Shelter (DENS) has offered a range of services to tackle homelessness and poverty in the borough of Dacorum, just north of Hatfield CFC. They have been a Food Partner for over ten years. In 2015 DENS began regular collections of fresh surplus through our Donate Food with Ocado scheme, and in 2017 they received one of our charitable refrigerated vans to help sustainably upscale their collections using funds from the Single Use Carrier Bag Charge.
In FY 2017/18, we donated 13.9 tonnes of food to DENS. This was used to prepare over 21,900 meals at their 44-bed hostel, 4,415 meals at their Day Centre and to supplement 739 otherwise ambient food parcels feeding 1,975 local people, including 841 children. Food surplus used for meal preparation saved DENS £32,000 over the year.
Alongside food redistribution, we provided additional support this year in the form of a Corporate Volunteering day in November, the donation of personal care products, and donations to support a variety of fundraising events throughout the year.