"The Ocado Way: 2020 Corporate Responsibility Strategy" continued to develop and embed across the business in 2016. Progress was made in each of the four pillars, some of the highlights are set out in this section.

The Ocado Way: 2020 Strategy

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Education

Hertfordshire County Council is delighted to be working with Ocado to support road safety education in schools

Code for Life

Code for Life, our freely available school resource designed to teach children to code, continues to be well received both globally and here in the UK. As of the end of November 2016, we had 75,000 users and interest from over 59 countries at over 1,300 schools.

Road Safety

We have started an innovative road safety education programme to provide pedestrian safety training to school children.

Over the coming year, we will continue to work closely with Hertfordshire County Council to roll out "Pedestrian Training Skills" to schools across Hertfordshire, teaching children about the dangers of large vehicles .Our aim is to take this successful model and replicate it across other locations in the UK.

The provision of high-viz tabards has enabled more children to be offered Pedestrian Skills training in Key Stage 2 ready for their transition to secondary school.

Hertfordshire County Council is delighted to be working with Ocado to support road safety education in schools."

Heather Hill – Team Leader, Hertfordshire CC Road Safety in Schools

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Entrepreneurship

Supporting small suppliers

We like to make sure our customers are spoilt for choice when it comes to shopping, that's why we're always on the lookout for amazing new products to add to our range. Historically, it can be a struggle for small and artisan suppliers to secure a meeting with a buying manager of a retailer, so we have developed a user friendly site aimed at helping small suppliers complete the necessary paperwork and application to increase their chances of success.

It works by suppliers logging an application on www.supplyocado.com. Here they are asked for all the mandatory criteria necessary to be listed, ensuring that if they are successful, they can be listed quickly. Details of their products are then uploaded and this information is then routed to the relevant Ocado buying manager to review and follow up with. We have had more than 500 small suppliers complete applications in the first few months, and we look forward to reporting on this further next year.

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Environment

We continue to make progress with our environmental data management, working closely with our partner Ecometrica to provide a centralised data management system. This tracks carbon emissions from our CFCs, Spokes and vehicles. We are expanding it to track all waste from our operations.

Greenhouse Gas Emissions

During the reporting period, our CO2 emissions moderately increased as a percentage of sales to the previous year. The business has continued to significantly grow, with a number of newly opened Spokes now fully operational and the Andover CFC also open.

Our vehicle fleet continues to be our largest contributor to carbon emissions (66% of reported emissions), and during the period the fleet grew by a further 27% in response to our continued growth and that of Morrisons.com.

Despite the growth, we have continued to invest in carbon efficiencies. This has included the replacement of lighting with LED at both Hatfield CFC and the General Merchandise Distribution Centre as well as at a number of our Spokes; and installation of airlock doors at a number of Spokes to reduce refrigerant wastage on our "white box" refrigerated storage units.

The quality and integrity of our data is something we have particularly concentrated on during the period, bringing us far greater accuracy of content and significantly fewer estimates. This year, less than 1% of all carbon data is estimated compared to 5% last year.

PwC has carried out a limited assurance engagement on selected GHG emissions data (table below) in accordance with the International Standard on Assurance Engagements 3410 'Assurance engagements on greenhouse gas statements' (ISAE 3410), issued by the International Auditing and Assurance Standards Board and, in respect of the intensity measure, in accordance with the International Standard on Assurance Engagements 3000 (Revised) 'Assurance engagements other than audits or reviews of historical financial information' (ISAE 3000 (Revised)). A copy of the limited assurance report is available in the "Our Responsibilities" section of the Company's corporate website.

Refashioned Ocado uniform

Waste

We expect that centralised waste data will be compiled and published during 2017.

Throughout this year we have been closely measuring food waste, particularly that which can be redistributed to those in need. Over the last 12 months, more than 206 tonnes has been donated to food bank partners. This is a combination of hot meals served in shelters and refuges, in cafes such as those of our partner The Real Junk Food Cafe, food parcels and donations.

In the spirit of trying to avoid as much waste to landfill as possible, the last 12 months has also seen the recycling and refashioning of Ocado uniforms. Partnering with HMP Northumberland, Ocado's uniforms are refashioned as part of an offender retraining programme – enabling the upskilling of offenders to learn a trade whilst enabling Ocado's uniforms to be repurposed and ultimately be available for sale, with all proceeds going to the Ocado Foundation, for further charitable donations.

GHG Emissions (Tonnes CO2e)

2015/162014/152013/14
Scope 1 – Direct75,89163,15150,198
Scope 2 – Indirect28,67528,60226,493
Total Emissions104,56691,75376,691
Intensity measures:
Tonnes CO2e / 100,000 orders762.5725.4815.1
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Eating Well

Enabling customers to make informed choices about food and nutrition is at the heart of this pillar. Recognising that we are a very different business to many others in the industry is also a key aspect, and presents a number of opportunities. Last year we committed to always having at least 100 different fruit and vegetables on promotion at any one time, which we have continued to monitor throughout this financial year.

Being online enables us to use technology to offer nutritional information and healthier choice alternatives to our customers as they undertake their shop with us. During 2016, the "Seasonality" campaigns have proven particularly popular, highlighting and encouraging customers to eat what is in season, supported by associated recipes and promotions.

In an online world, we can't give customers the opportunity to leave food donations in store, as some retailers do. So we looked for a better way. December 2014 saw us launch "Donate Food with Ocado", an alternative food donation scheme whereby customers make a financial donation to buy food for our local food bank partners, and we match it with groceries that we donate. This has continued to prove popular with customers, and during the financial year more than £179,278 of food has been provided to food banks. The beauty of the scheme is that it allows food banks to get the specific foodstuffs that they need, predominantly fresh, refrigerated products.

Fresh Fruit/Vegetables on Promotion 2016

Fresh Fruit Veg Promotion

Case Study

The North Warwickshire Food Project

"Over the last 12 months, the North Warwickshire Food Bank, in partnership with the Council, local Citizens Advice Bureau and a homelessness charity has been supplied almost exclusively through the fantastic partnership we have with the Ocado operation in Dordon. This brilliant and innovative arrangement has enabled us to develop a service offer over the last three years with Ocado that initially saw us able to support families and individuals impacted by welfare reforms via the provision of emergency food parcels. In the last 12 months alone, this has enabled us to issue over 1,600 food parcels that has helped support more than 5,500 individuals. Without this support, the ability of these residents to cope with their crisis need would have been significantly worse and cannot be underestimated."

North Warwickshire Food Bank partners and volunteers

Ocado is committed to the upholding of human rights. During the period, we introduced a Human Rights Policy reflecting our commitment to acting ethically and with integrity in all our business relationships and to implementing and enforcing effective systems and controls. We welcome the introduction of the Modern Slavery Act which is designed to root out slavery-like practices, such as human trafficking, in global supply chains. Our full modern slavery statement will be published on www.ocadogroup.com.

We continue supporting farmers in South Africa and Kenya who supply us with fruit and vegetables via donating to the Waitrose Foundation. We made donations totalling £20,000 during the period of this report.

During the period we also made a donation of £260,000 to the Prince of Wales's Charitable Foundation, through sales of Duchy branded products.

No donations were made by the Group to any political party, organisation or candidate during the period (2015: nil).

Ocado's partnership with WRAP and Recycle Now school campaign

The Ocado Foundation

The Ocado Foundation was established in April 2015 with the aim of our employees and customers helping us make well-aimed actions at a local level across the UK. We try to make donations to multiple small, local charities, selected by employees across Ocado nationally, rather than providing support only to a single "household name" major charity.

During the last 12 months, almost £15,000 has been donated to charities across the UK by colleague's activities that have been matched in funds by the Ocado Foundation. Colleagues have also volunteered more than 2,000 hours to a variety of good causes.

The legislation that came into effect in October 2015 requires 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 that this is best done by removing the bags from circulation. During the period, we have collected 102.7 million bags from customers preventing them from becoming litter in the first place. The Ocado Foundation is custodian of the remaining funds from the carrier bag charge and disburses the donations.

One such example of our donation is our partnership with WRAP and the Recycle Now schools campaign. Some of the proceeds from the carrier bag charge is funding the development and dissemination of primary schools resources about recycling and sustainability.

Case Study

In 2016, Ocado partnered with The Real Junk Food Project (TRJFP), a charity intercepting food destined for waste and using it to create healthy meals for its Pay As You Feel cafes located across the UK and worldwide.

The efficient planning of Ocado's business model means that there is a very small amount of food waste. The area that cannot be planned is customer cancellations.

Food is donated to TRJFP when a customer cancels an order that has already been picked and packed. The order is returned to the distribution site, stored at the correct temperature and collected every day by TRJFP.

Adam Smith, founder of TRJFP, says: "Ocado runs an incredibly streamlined and efficient operation in regards to product sourcing, variety and delivery logistics. The style and quality of food and the regularity of deliveries we are receiving from Ocado is incredible. The variety of Ocado food that we've used to create tasty and healthy meals has attracted more and more customers to the cafés, especially in Leeds. Coupled with that, the Ocado team is able to let us know what we'll receive the day before we collect the products, so our chefs can plan menus in advance. This ensures no food is wasted in our cafes."

During the year, we have rolled this partnership out to numerous sites across the UK and continue to look for innovative ways to reduce food waste."

Ocado working with The Real Junk Food Project, Leeds

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