Business Ethics in relation to Ocado
Ocado’s corporate responsibility is focused on four key areas which are; Education, Entrepreneurship, Environment and Eating well. In recent years the company has made certain modifications and introduced schemes to work towards achieving these as well as aiming towards several of the Sustainable Development goals set out by the UN.
The Ocado foundation, Ocado’s charitable arm, set up Code for life in 2015. It delivers open source software to help students learn about computing and inspiring next generation of computer scientists. In 2018 a programme called Rapid Router was developed which teaches primary age children to code. By November 2018, 99k users in UK, 160k globally, more than 3000 schools have incorporated Rapid Router into their computing curriculum. (Over 100,000 schools and students are learning to code with Rapid Router — Ocado Technology, 2017) They then launched AI: MMO, an adventure game that teaches secondary school children aged between 13 and 16 skills in artificial intelligence and Python coding. (Ocado Technology, 2018)
The Ocado foundation has 5-year partnership with WRAP promotes recycling education projects for primary school children. Ocado is providing £100,000 per to fund the development and of school resources and education in recycling and sustainability, as well as supporting environmental projects. (Wrap.org.uk, 2018)
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. (The Ocado Way, 2018)
The Engineering Education Scheme (EES) has helped over 30,000 6th form students experience 6 month engineering projects. This develops interview, communications, teamwork, technical, and project management skills, alongside entrepreneurial thinking as they work together to solve real industrial problems. They’re mentored by engineers in a corporate setting, and at the end of their project they present their solution to their peers. 91% of EES students go on to complete a science, technology, engineering, and mathematics (STEM) related degree, with a further 71% working in engineering or technology companies for their first job.
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In 2018 Ocado continued a 5-year trend of improving our energy efficiency, resulting in a 33% energy efficiency improvement since 2012 (Ocadogroup.com, 2017). As in previous years, the diesel for their distribution fleet remains the largest contributor to the carbon footprint, accounting for 69.53% of our carbon emissions. Electricity is the second main contributor, making up 22.28% of our emissions, with most of this centralised in the main Customer Fulfilment Centres. To improve the efficiency of their delivery vehicles modifications have been made to their vehicles such as removing all unnecessary weight from their delivery vehicles, utilising a patented Temperature Stop Start technology so fleet fridges communicate temperature to the engine and switch off, and driver training incentivising safe and efficient driving, with fuel consumption in mind (Pillar 2: Environment Corporate Responsibility, 2018).
In 2018 just 0.029% of food as a percentage of total sales was wasted compared Tesco at 0.45% of total sales (Tesco PLC, 2018). Ocado are committed to ensuring no food goes into landfill; inedible food is sent to anaerobic digestion and edible food is redistributed. 1721 tonnes of surplus food was redistributed in 2018, with over 90 tonnes of fresh and ambient food donated to food banks and charities (Ocadogroup.com, 2017). The efforts to reduce food waste includes ordering their receipts by use by date so customers can manage their shopping and plan weekly meals better, providing clear storage instructions on own brand products, working with WRAP to cut food waste in the UK by 20% within a decade, as well as publishing food waste figures and launching the Fight Food Waste campaign (Ocado.com, 2017).
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In 2007 Ocado introduced a plastic carrier bag recycling which has been and is now financially incentivised for customers, by offering 5p per returned bag, whether it is on Ocado bag or one from a competitor. The scheme has proven very successful with 87% of bags being recycled in the last financial year (Ocadogroup.com, 2017). They have also made an investment in a UK plastics recycling company who manage our carrier bag recycling scheme so that bags do not have to be sent to China, as they do in many other recycling schemes, saving carbon.
Tying into, a scheme was introduced in 2018 to recycle the delivery vans. When an Ocado van comes to the end of its usable life it is sold to MyGreenFleet, who dismantle it for reusable parts and recycling. 95% of the dismantled vehicles can be recycled; Ocado buy back reusable parts like doors, bumpers, or wing mirrors to keep them for repairs. Almost everything else gets recycled, for example tyres will become playground surfacing. Ocado have also been working to remove unrecyclable black plastic from their packaging removed it from 83 product lines, representing 90% of Ocado Own Brand lines that had black plastic.
They have established partnerships with local food banks and charities at each of our Customer Fulfilment Centres. Each partner serves their local communities, helping thousands of people who are at risk of, or experiencing, food poverty and insecurity. Ocado have a scheme called Donate Food With Ocado, customers can purchase vouchers and Ocado will donate double the voucher value of fresh groceries to our charity 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. Between 4th December 2017 and 4th August 2018, customers generously donated over £350,000, which equates to £700,000 worth of fresh groceries to their partners (Ocado, the online supermarket, 2019).
As part of these efforts, they have sourced 750 products to create our vegetarian and meat-free shop and over 2,000 products to build the biggest branded free-from range of any UK supermarket. To further encourage eating well, they launched a program called Calorie Saver in 2015 which uses technology to suggest lower calorie alternatives to customers just before they check out. They continued to promote eating well through their partnership with Vitality in 2016 by offering their members discounts on an agreed list of healthy food and drink. If 30% of the value of a customer’s shopping is made up of eating well goods, the member gets free delivery.
- Over 100,000 schools and students are learning to code with Rapid Router — Ocado Technology (2017). Ocado Technology. [online] Ocado Technology. Available at: https://www.ocadotechnology.com/press-releases-1/2018/12/12/over-100000-schools-and-students-are-learning-to-code-with-rapid-router [Accessed 22 Oct. 2019].
- Ocado Technology. [online] Ocado Technology. Available at: https://www.ocadotechnology.com/press-releases-1/2018/12/12/ocado-reveals-new-initiatives-to-get-students-interested-in-computer-science-and-engineering [Accessed 22 Oct. 2019].
- Wrap.org.uk. (2018). Our work with charitable funders | WRAP UK. [online] Available at: http://www.wrap.org.uk/content/our-work-charitable-funders [Accessed 22 Oct. 2019].
- The Ocado Way. (n.d.). [online] Available at: https://www.ocadogroup.com/~/media/Files/O/Ocado-Group/documents/CR%20Report/Ocado%20CR%20Report%202018%201.pdf. pp5-7
- Ocadogroup.com. (2017). Environment. [online] Available at: https://www.ocadogroup.com/our-responsibilities/environment.aspx.
- Ocado.com. (2017). Ocado, the online supermarket. [online] Available at: https://www.ocado.com/content/food-waste-123216 [Accessed 22 Oct. 2019].
- Pillar 2: Environment Corporate Responsibility. (n.d.). [online] Available at: https://www.ocadogroup.com/~/media/Files/O/Ocado-Group/documents/CR%20Report/CSR%20doc_2Environment.pdf [Accessed 22 Oct. 2019].
- Ocado, the online supermarket. (2019). Donate food with Ocado 2.50 GBP | Ocado. [online] Available at: https://www.ocado.com/products/donate-food-with-ocado-2-50-gbp-271532011 [Accessed 22 Oct. 2019].
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