Sainsbury to Spend $1.3 Billion on 2040 Net Zero Carbon Target

(Bloomberg) -- J Sainsbury Plc said it will spend 1 billion pounds ($1.3 billion) on a plan to reach net zero greenhouse-gas emissions by 2040.

The U.K. grocer intends to halve plastic packaging by 2025, reduce food waste and lower its water usage, according to a statement Tuesday. It will also install LED lights in stores, use more electric vehicles and alternative fuels and plant more than 1.5 million trees by 2025.

Sainsbury joins a growing roster of companies pursuing a goal of zero net emissions, meaning they aim to eliminate as much of their carbon footprint as they can and offset the rest. Nestle SA, Qantas Airways Ltd. and Thyssenkrupp AG have committed to be net zero by 2050. Earlier this month Microsoft Corp. pledged to be “carbon negative,” meaning it will remove more carbon than it emits, by 2030, while Starbucks Corp. outlined a goal of becoming “resource positive” in the long term.

Sainsbury said it will focus on emissions from its operations and the electricity it buys, while stopping short of pledging net zero status for its supply chain -- a goal some of the other companies are pursuing. The supermarket operator said it will ask suppliers for their own carbon-reduction commitments.

The retailer plans to reach net zero a decade earlier than the U.K. government. Britain last year agreed to become the first major economy to pass a law requiring it to reduce greenhouse gas emissions to the point where it makes no net contribution to rising global temperatures. Sainsbury also plans to reach net zero a decade earlier than bigger rival Tesco Plc, which more than a decade ago set that as a target for 2050.

Price Pressure

The announcement comes as Sainsbury faces continued pressure amid a brutal price war in the U.K. grocery sector, fueled by the growth of the discounters Aldi and Lidl.

The 1 billion pounds will be invested at a rate of 50 million pounds a year for the next two decades and will form part of planned capital expenditure. A large part of it will be spent on improving the efficiency of refrigeration in stores, the company said.

Read More: Sainsbury CEO Exits With Stock the Worst Performer Among Peers

It’s a parting shot for Chief Executive Officer Mike Coupe, who is leaving in May, less than a year after the collapse of a planned purchase of Walmart Inc.’s Asda. He will be succeeded by the grocer’s retail head, Simon Roberts.

“We recognize that we have a once-in-a-lifetime opportunity to make the changes needed to help the planet exist sustainably,” Coupe said in the statement.

--With assistance from Akshat Rathi.

To contact the reporters on this story: Alastair Marsh in London at amarsh25@bloomberg.net;Deirdre Hipwell in London at dhipwell@bloomberg.net

To contact the editors responsible for this story: Tim Quinson at tquinson@bloomberg.net, Eric Pfanner

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