EU Environment Policy

A Tesco Lotus Perspective

Mr. Steve Hammett CEO, Tesco Lotus

29 May 2008

We fully support the EU’s initiative on“an integrated energy and climate change policy”

We are also in full support of the “European Climate Change Programme (ECCP)”

As a business, it is Tesco Group’s policyto take the lead in breaking the link between

business growth and greenhouse gas emissions.

Our Commitment

“I am determined that Tesco should be a leader in helping to create a low-carbon economy.”

That is a monumental challenge. It requires a revolution in technology and a revolution in thinking.

The green movement must become a mass movement in

green consumption.”

(Sir Terry Leahy, Tesco CEO, January 07)

What have we been doing so far?

Aiming to halve energy use by 2008

We give out extra Clubcard points to environmentally conscious customers

We are cutting down on packaging to reduce waste

We are on track to achieve our target to reduce use of carrier bags by 25% within 2008

We focus more on local sourcing

We are committed to recycling, reducing and reusing whenever possible.

We are reducing energy use, while at the same time investing in efforts to switch to renewable energy.

We are making products more sustainable

Global Targets

Halve our global carbon footprint by 2020

Reduce emissions from existing operations by at least 50%

by 2020

We aim to achieve such targets through the way we do business,

how and what goods and services we provide to consumersand how consumers choose what they buy and consume

Why focus on consumption?

Source: UK emissions data, CBI, McKinsey

– Manufacturing– Coal mining– Export transport

– Heating (13%)– Private vehicles (10%)– Electricity (8%)– Other transport (4%)

– Agriculture (7%)– Public sector (3%)– Wholesale/retail (2%)

UK emissions

35%Directly controlled

by consumers

25%Influenced by

consumers

40%Not directly influenced

by consumers

Customers can have indirect

influence here by exerting pressure on government and business to

reduce emissions

Increasing awareness among European customers

45%36%36%

27%23%

21%20%20%20%

17%14%

10%

Q Which three or four do you think companies should pay particular attention to over the next few years ?

Concern for the environment

Conserving energy

Providing good quality products/ services

Caring for customers

Investing for the future

Providing equal opportunities

Caring for employees

Keeping prices reasonable

+11

+13

- 4

- 4

-10

- 8

-14

Change01-07

-12

+8

Base: All British Public (933), August 2007

Training the workforce

Supporting activities in the community

-3

+2

Providing more jobs

TOP MENTIONS

Safety of the workforce

+1

3 Key Barriers

Going green makes life expensive or complex

Lack of information about what to do; and

Individual actions won’t make a difference

Price and affordability

Information

Carbon labelling trial

• 20 products in the following categories:– Laundry Detergent– Orange Juice– Potatoes– Light bulbs

• Pilot launched 29 April

Making individual actions count

Knowledge and Skills

Working with the EU

• ERRT Energy Declaration• Leading work towards an EU Retail Environmental Action Plan

(REP)• Support for policy development including:

– Review of energy labelling– Extension of energy using products directive– VAT exemptions for Green products

What are we doing at Tesco Lotus?

We have a clear objective to be thebusiness leader in Thailand

on Green Initiatives

Reduce carbon emissions from existing operations

by at least 50% by 2020

Clear objective on the environment:

Over 450 stores in 56 provinces

Carry over 32,000 types of products

Employs over 36,000 full-time staff

Engaged with over 9,100 suppliers

28 million customers per month

Tesco Lotus business footprint:

Tesco Lotus – Green Initiative Highlights

• Carbon footprint measurement• Supply chain improvements• Green Stores• The first and biggest biodiesel fleet in Thailand• NGV service bus for the customers• T5 light bulbs • Plant 9 Million Trees

Offices

DistributionCentres

StoresProductionFacilities

Consumption& disposal

Business TravelRefrigerants

Waste DisposalSystem

Other Assets Staff Commute

Delivery Trucks

Supplier Transport Customer Transport

Direct Carbon Footprint

One of the 1st in Thailand

Carbon Footprint

Improving the supply chain

Green Stores I – Rama I

From the 1st Green Store on Rama I Road was built in 2003

The First Green Store at Rama I

2,880 sets of 160 watts Solar Cell occupied 7,000 square metres on roof

Solar powered lighting for bus stop

Harvested rain water used in coolingTower; reduced mist and noise from cooling tower

Use treated water at decorative pond

The First Green Store at Rama I

From the 1st Green Store to Green Store 2 in Salaya

Eco-friendly store

• 57 initiatives including 4 renewable energy : Solar Cooling, Wind Turbine, Biogas and Biodiesel plants

Solar Cooling

Biogas and Biodiesel Plants

Wind Turbines

Eco-education Centre

• Interactive learning center to educate the youth and the general public on environmental initiatives

Community Store

• Pleasant environment to shop with recycled water pond and landscaping• Create environmental awareness through signage and store items

T5 energy saving light bulbs Water Pond

Energy Saving imitative highlights

Biodiesel Fleet

The 1st and largest delivery biodiesel fleet in Thailand

NGV Service Bus for Customers

Special T5 Light Bulbs

Green Partnership: Tesco Lotus – Phillips Thailand– Chulalongkorn University

Plant 9 Million Trees

Conclusion

• Tesco Group of companies are determined to be the leader in the business sector on environmental conservation and energy saving

• We believe in breaking the link between business and economic growth and carbon emission

• Many of the projects that we do are high capital and do not have a direct immediate return to the business; however, we are investing in the future and we are beginning to see the results

• Environmental conservation and energy saving is in our business DNA; and we are ready to share our learning with all interested parties

THANK YOU