The Ocado Way. Ocado Corporate Responsibilty Report 2018

The Ocado Way Ocado Corporate Responsibilty Report 2018

I m delighted to introduce Ocado s first Corporate Responsibility Report. For the past 17 years, we ve developed innovative technology solutions to disrupt the UK grocery market and deliver incredible service to our customers. But in the background, we ve also devoted our energy and money to many worthwhile projects and causes in an effort to positively contribute to our society. In 2015 we launched our Corporate Responsibility strategy, The Ocado Way. In just two and a half years we have rapidly scaled up the good things we were already doing reducing food poverty, increasing education and road safety, helping the environment, and so much more. Our team have taken a relatively small budget and made it go as far as possible, generating remarkable results. Aside from knowing that we re doing the right thing, it s a pleasure to see this hard work gain external recognition. In 2017 we won the Carbon Disclosure Project s Best First Time Responder Award for our dedication to managing carbon efficiency, and our Ediblelinks food partnership has been shortlisted for a 2018 Local Government (LGC) Award. The Ocado Foundation is our efficient, centralised focal point for all our charitable efforts. It s also the custodian of the money generated from the 5p levy for single use carrier bags. You ll find out how we re using that money in the spirit of the legislation to reduce littering and protect wildlife in our chapters on Environment and The Ocado Foundation. I m immensely proud of what we ve already achieved, but this report is just the beginning of our journey and sets a marker of what we d like to do going forward. I hope you enjoy reading the content. We are very keen to hear your views, so please send any of your questions or thoughts to our Corporate Responsibility team at theocadoway@ocado.com. Neill Abrams Ocado Group General Counsel

Pillar 1: Education Corporate Responsibility Sharing our learning to create a better future, for everyone.

Pillar 1: Education Pillar 1: Education Increasing road safety Our success in retail and technology comes from a virtuous circle of testing, learning and developing. Everything you ll find in this pillar relates to how we share what we ve learned with others. By sharing our expertise, we hope to add value to our society now, and help the next generation achieve more than we can imagine. Everyone who drives one of our signature vans is trained in safe and efficient driving as part of their induction process. Ocado drivers continue to receive training and development throughout their career, along with incentives and rewards for driving safely. In 2017 we ran a Driving for Work pilot scheme for over 300 head office staff, as we recognise the need to support those head office staff who regularly drive between our various sites. Delivered by 30 DVLA Approved Fleet Driver Trainers, our award winning Driver Risk Management training is highly regarded in our industry. So much so, for many years we ve been invited to share our driving expertise to help others. For now, our resources for road safety education projects are focused on four groups. Three of these are people we think are most vulnerable to road traffic incidents: primary school children, new drivers, and other driving professionals. We also think it s important to support people affected by road collisions, so we fund victim support projects and charities. Child focused road safety projects Children are most at risk on our roads when they start walking to school on their own. Since September 2016, we ve tried to plug road safety education gaps where previous funding has been cut. 2 3

Pillar 1: Education Pillar 1: Education Hertfordshire road safety Hatfield, which is in Hertfordshire, is home to our head office and our first Customer Fulfillment Centre. Two significant motorways the M1 and M25 both run through Hertfordshire. Hatfield is one of our biggest delivery hubs, with 220 vans and 700 drivers delivering 6.2 million orders last year an average of 151,000 orders each week. Recognising our impact on local roads, we re keen to support our community s road safety education projects. In the last 18 months, we ve worked closely with Hertfordshire County Council to help deliver their road safety and active travel programme. In the past we ve provided hi-vis vests and pedestrian skills training for over 30 schools at Key Stage One and Two. In September 2016, we supported the county s first Road Safety Partnership Fun Day. Over 1,000 visitors met our Driver Risk Training team alongside local emergency services, and experienced a simulated road collision in the partnership s crash car. We ran a child safety programme, teaching children about crossing the road and the dangers of delivery vehicles. And, we managed to squeeze in some fundraising for our local air ambulance charity on the day, too. The road safety and active travel programme run by the Active and Safer Travel Team and the Hertfordshire Road Safety Partnership at Hertfordshire County Council have greatly benefited from the support of Ocado thank you. Katherine Ware, Senior Officer, Hertfordshire Road Safety Partnership 4 5

Pillar 1: Education Pillar 1: Education Hatfield Games Sports day is one of the most exciting and memorable events of childhood. With children in a positive, relaxed frame of mind, a sports tournament is also a great time to share important lessons about eating well and road safety. That s why, for the last two years, we ve come together with local businesses, sports clubs and charitable trust SportInspired to deliver the Hatfield Games. This exciting event brings together Year Four children from local primary schools. They get to meet new friends and take part in a huge dance, tennis, football and badminton tournament, whilst 60 volunteers from Ocado officiate and help them learn about the principles of healthy eating and road safety. Giving back to our local community in this way contributes to a safer, healthier future for the children of Hatfield. Dordon Big Day Out It s not just Hatfield s community we get involved with. Dordon Big Day Out in June 2017 was a perfect opportunity to meet the families living around our Customer Fulfillment Centre in Warwickshire. This regular family festival organised by North Warwickshire Borough Council attracts around 800 people for a day filled with food and fun. Members of our company charity the Ocado Foundation attend to promote healthy eating and road safety training for adults and children alike. 6 7

Pillar 1: Education Pillar 1: Education Supporting new drivers Supporting driving professionals Getting your first car and the freedom that comes with it is an exciting, transitional time for young adults. It s also a time when drivers are most vulnerable, which is why we fund education projects targeting this group. The Young Driver s Guide In spring 2017, we sponsored a special edition of this magazine, to help reduce road risks for new drivers. The Young Driver s Guide covers all aspects of driving and delivers road safety messaging through respectful, engaging content. As well as covering the costs of the magazine, we contributed two features: Roadside First Aid and The ABC of LGV. 27,000 copies were delivered to 125 schools in Warwickshire and Hertfordshire, counties where we have a high presence on the roads. We re so excited about these results, that we re sponsoring a 2018 edition, expanding distribution to include Hampshire and Wiltshire, where our Andover Customer Fulfillment Centre recently opened. 88% of readers said they were more aware of the dangers faced by new drivers after reading the magazine Taxis, logistics firms, postal workers, and of course, delivery drivers there are lots of people who drive for work. We want to make the roads we share a safer place; here s how we share road safety best practice with other organisations. BRAKE This road safety charity supports bereaved families and survivors of serious road accidents through a free helpline and advocacy services. In 2016, BRAKE took 1,800 calls and helped over 600 individuals. BRAKE also focuses on increasing road safety for driving professionals across the UK. We regularly attend and part-sponsor events such as the Fleet Safety Awards, and participate on steering groups or panels for other driving professionals, like taxi and logistics firms. Ocado s donations have really helped fund our support services. But they ve also generously supported us with their time, sharing expertise at our events and helping other organisations understand how to manage road risk. Over the past eight years, they ve become one of our most important and valued sponsors. Richard Coteau, BRAKE Corporate Fundraising Manager 8 9

Pillar 1: Education Pillar 1: Education Supporting victims of road accidents When accidents happen, we help to provide a strong support network for victims and their families. We work with charities to provide counselling, advocacy, and improve interactions between families and the police when delivering difficult messages. Road Victims Trust This charity provides free emotional and practical support to people affected by road fatalities in Hertfordshire, Bedfordshire and Cambridgeshire. They ve developed a unique relationship with police forces across the three counties. They re informed of every fatal collision in the area, and last year alone provided counselling to over 550 people. Volunteers drive to visit families and individuals they work with; we give them our Driver Risk Management training, keeping them safe whilst supporting others.as a small charity, they rely on our financial support too; we sponsor awareness and fundraising events for them such as their annual charity ball and provide raffle prizes. 550 people who were provided counselling in 2016 by Road Victims Trust Kate Goldsmith was helped by the Road Victims Trust following the death of her 11 year old daughter, Aimee in August 2017. Three other passengers also died when a HGV hit the back of the car they were travelling in. The offending driver received a 10 year custodial sentence; at the time of the collision his attention was on his phone, not the road. It s wonderful that a company with Ocado s reputation is giving its backing to the Road Victims Trust. This will help the RVT continue to support others whose lives have been devastated by a road death. Kate Goldsmith, Ambassador for the Road Victims Trust I have been enormously impressed by the quality and integrity of the Ocado training regime in respect of its fleet and the generosity of so many of the team who understand the work of the Road Victims Trust. It really has made a very real difference to many lives. Mark Turner, Chief Executive of the Road Victims Trust 10 11

Pillar 1: Education Pillar 1: Education Increasing road safety Delivered to date 50,000 spent on road safety projects since September 2016. Two years of the Hatfield Games, reaching 500 children from 5 schools in Hertfordshire. Dordon Big Day Out June 2017. Hertfordshire Road Safety Fun Day 2016. Sponsorship for 27,000 copies of the Young Driver s Guide. Future goals Extend road safety programmes around Hatfield, Dordon, and Andover CFCs. Create road safety programmes around Erith CFC when operational. Sponsor and distribute The Young Driver s Guide 2018 to 242 colleges and sixth forms in Hertfordshire, Warwickshire, Hampshire and Wiltshire. Support road safety education projects for other high risk groups. Continue to run the Hatfield Games and set up similar projects in Warwickshire, Hampshire and Wiltshire. 12 13

Pillar 1: Education Pillar 1: Education Children s education projects WRAP In 2016, we made a five-year funding commitment to support the charity Waste and Resources Action Plan (WRAP). We promised to spend 100,000 per year on sustainability and recycling education projects. We ve started with Key Stage 1 and 2 children, and our lesson plans and activity will continue working with this group as they move up through school. The project is set to reach 20,000 schools across England, Northern Ireland, Scotland, and Wales. We hope this ongoing commitment will encourage children to take the sustainability lessons learned in school home, to help their families recycle through the magic of pester power. By challenging children to find out about what they can recycle from all around the home, and by getting their families to recycle, we want recycling to become the norm for the next generation. Linda Crichton, Head of Recycle Now at WRAP Code for Life When computer science was added to the UK primary school curriculum in 2014, our neurons lit up. Ocado Technology is the not-so-secret driving force behind Ocado.com, and our B2B customers, Morrisons.com, Groupe Casino in France and Sobeys in Canada. From robotics to routing systems, IoT projects to inference engines our success comes from a collective hive of brilliant computer scientists and engineers. We re in a good place to help inspire and train tomorrow s coders. Who knows, beneficiaries might even become the next Ocado Technology coders... We worked with primary school teachers to develop resources and software to teach coding for Key Stage 1 and 2; our product, Rapid Router, helps children flourish in an increasingly digital world. 14 15

Pillar 1: Education Pillar 1: Education Code for Life (continued) The software is open source; the code is freely available for other geniuses to tinker with, which means the game continually improves for future learners. Excitingly, people all over the globe have registered interest in using the software. Language should never be a barrier to learning, so we re translating Rapid Router into Polish, French, Spanish, Brazilian Portuguese, and other commonly requested languages. Code for Life s goal is to give everyone the ability to shape technology s future, regardless of age, gender, or nationality. Delivered to date Over 70,000 registered users in the UK. Over 117,700 registered users worldwide. Over 2,300 registered schools. Future goals Develop resources for secondary school children. Complete language translations for user countries. Top registered countries 1. United Kingdom 2. Australia 3. Brazil 4. United States 5. United Arab Emirates 6. South Africa 7. Netherlands 8. Denmark 9. Spain 10. New Zealand 16 17

Pillar 1: Education Pillar 1: Education Rehabilitation through education We believe that education has the power to change lives. Studies show that offenders who find sustainable employment after release are 50% less likely to be reconvicted than those who haven t. 60% of offenders from a working prison secured employment or training after release that s 50% higher than the national average. For these reasons, since 2015, we ve been working with HMP Northumberland on a combined education and recycling project. HMP Northumberland s textiles factory transforms retired Ocado uniform which we would have otherwise been incinerated into products we ll sell on Ocado.com, with proceeds going to charitable recycling projects. Offenders debrand our uniforms unwanted fleeces, trousers and polo shirts turn them into raw materials, design and cut patterns, before machinestitching finished products. That counts as a complete manufacturing process, which is really useful, as it means Ocado designs count towards the offenders study for the Performing Manufacturing Operations qualification (PMO), a Level 2 NVQ. Since 2015, 17 offenders have successfully completed the PMO. A further 61 offenders are enrolled in the course. Everyone who has been offered the six month course has voluntarily taken the opportunity, and so far the course success rate is 100%. This project helps us reduce our environmental impact, and teaches offenders a trade, increasing their self-esteem and chances of finding meaningful employment after release. Not all of our projects are end-to-end, so it s nice to work on the Ocado stuff and see the finished garments evolve from raw fabric. These projects give us some variety too; this makes your mind tick over, and helps you feel more useful. I ve learnt more in here than I did on the outside. When I first came in, I knew nothing about textiles. I wouldn t have thought you could do this kind of thing with an old jacket. Ian, Offender at HMP Northumberland Delivered to date 55 tonnes of uniform recycled. 17 offenders gained the Performing Manufacturing Operations (PMO) qualification. 61 offenders enrolled on the PMO course. 10 designs created by offenders using recycled uniform. Future goals Develop more products to help reduce our uniform waste. Expand partnership opportunities with HMP Northumberland. 18 19

Pillar 2: Environment Corporate Responsibility Waste not, want not. Creating a better future by reducing our environmental impact.

Pillar 2: Environment Pillar 2: Environment Our carbon footprint The Ocado business model is built around efficiency and low waste. As we grow, our efficiency increases and our carbon intensity reduces. However, we ve focused on finding ways to reduce our carbon impact since the beginning. We want to become the UK s most environmentally-friendly supermarket. Operational efficiency has always driven our business. Reducing the time it takes to receive, pack, and deliver shopping makes both customers and investors happy. Continually striving to be slicker, leaner, and less wasteful has the added benefit of reducing our carbon intensity. As our business grows, so does our efficiency, creating a virtuous circle that benefits our customers, our investors, and the environment. Greenhouse gas We report on carbon emissions per 100,000 orders. Our absolute carbon emissions have grown as our business has doubled in size since our baseline year of 2012/13. We focus on reducing our carbon intensity through operational efficiency. Since 2015, our average order volumes have increased by over 16% for Ocado.com and for our customer, morrisons.com. Despite increased emissions due to business growth, we ve continued a five-year trend of improving our energy efficiency, resulting in a 27% efficiency improvement relative to our 2012 baseline year. In 2017, we partnered with the Carbon Trust who carried out a limited assurance engagement on selected GHG emissions data (table overleaf) in accordance with ISO 14064-3:2006 Specification with guidance for the validation and verification of greenhouse gas assertions. A copy of the limited assurance report is available in the Our Responsibilities section at ocadogroup.com. In June 2017, we voluntarily submitted data to be reviewed by the Carbon Disclosure Project and subsequently won their Climate Change Best First Time Responder award. We re extremely proud to have an independent body confirm that we re working as efficiently as possible, and we will continue to strive for transparency and excellence. 2 3

Pillar 2: Environment Pillar 1: 2: Education Environment GHG emissions (Tonnes CO₂e) 2016/17 2015/16 2012/13 Scope 1 Direct 82,305 72,377 39,530 Scope 2 Indirect Location based 28,270 28,675 21,613 Market based 14,510 - - Total Emissions (location based) 110,574 101,052 61,143 Intensity measure (tonnes CO2e / 100,000 orders) Location based 596.4 582.8 823.4 Market based 522.2 - - Due to inaccuracies discovered in our 2015/16 data we have restated our GHG emissions and intensity measure for that period. Total emissions and intensity measure for 2017 have been calculated using the location-based method. Ocado fleet 1,450 Ocado delivery vans. 550 Morrisons.com delivery vans. Ocado premises 3 operational CFCs. 17 delivery hubs. 1 Distribution Centre. 1 UK head office. 4 European offices. Creating carbon efficient premises In 2014, the Carbon Trust looked at Hatfield Customer Fulfillment Centre and estimated that we could save a great deal of carbon (1,677.3 tonnes per year ) by replacing our existing lighting with LEDs. We finished upgrading the lighting in Hatfield CFC in 2017. Our newer CFCs have been built with carbon efficiency in mind; features such as LED lighting and roller doors between chilled areas now come as standard. Reducing delivery van emissions When you ask the general public what they know about Ocado, the majority of people will mention our signature vans. Some might have spotted that they re Mercedes Sprinters. But they won t know what really makes our vans special: they re the lightest home delivery vehicle in our sector. We take the chassis cab and remove unnecessary weight, such as the passenger seats, the wheel trims we even save 10kg just by replacing the carpet. The refrigeration unit in the back is very heavy, so in 2017 we worked with our supplier on some airflow analysis. Optimising the design means we ll be able to maintain a chilled temperature more efficiently; this could mean we ll be able to use a lighter, lower-powered fridge. By building lighter vehicles which can carry more shopping, we can use less fuel and an even more carbon efficient fleet. 4 5

Pillar 2: Environment Pillar 1: 2: Education Environment Technology is another way we strive for a more energy efficient fleet. We give customers the opportunity to choose a green van slot to time their delivery when an Ocado van is already in the area as they check out, reducing mileage. You may have heard the name Loki before; it s the name of the artful trickster of Norse mythology. It s also the name of our delivery route scheduling system, which makes around four million routing calculations per second. Loki s purpose is to make sure every Ocado van gets to its next delivery destination as quickly and efficiently as possible, reducing mileage. It factors in all kinds of variables, such as time of day, traffic, and data from other Ocado vans delivering in the area. Van refrigeration units are powered by the engine, which means the engine has to be pretty much continuously running. Last year, I came up with an idea for a system which monitors temperatures and then lets the fridge tell the engine when it needs to start, or stop. We ve filed a patent for Temperature Stop-Start technology, and I ve been listed on the patent as an inventor. Increasing driver efficiency Using engineering and technology to optimise our vehicle emissions is all very well, but there s another, very important factor in energy efficiency: our drivers. All Ocado drivers are trained in safe and efficient driving through our in-house Driver Development programme, delivered by our team of 30 DVLA Approved Fleet Driver Trainers. This helps keep them and others safe on the road, reduces our fuel consumption and ultimately, our emissions. We encourage our drivers to take safe and fuel efficient driving seriously. Each vehicle is fitted with a SmartDrive camera system for insurance and driver safety. This monitors driving behaviour and sends reports on things such as driving style, speeding, and driver inattention. Our team get regular updates on their performance and how they can improve their driving skills and efficiency. Recycling our fleet Five years ago, we changed our buying policy so that when Ocado delivery vans retire, we purchase and recycle them; this policy change came into effect this year. When an Ocado van comes to the end of its life, we sell it to MyGreenFleet, who dismantle it for reusable parts and recycling. 95% of our dismantled vehicles can be recycled; we buy back reusable parts like doors, bumpers, or wing mirrors to keep them on hand for repairs. Almost everything else gets recycled. Tyres become playground surfacing; plastic becomes bottles, seating, or kitchen utensils; leftover metal becomes reinforcing bar, used in the construction industry. Matthew Leigh, Ocado Vehicle Technical Specialist 6 7

Pillar 2: Environment Pillar 2: Environment When we presented the MyGreenFleet scheme to Ocado in 2016 it was obvious that we were talking to like-minded people. The first order was placed in July 2017 and we ve processed 317 transactions. Working with a household name like Ocado helps us raise awareness of the benefits green parts offer; we re extremely pleased to be working with the Ocado team. Tim McCarthy, Business Development Director, MyGreenFleet Reducing HGV emissions If shopping doesn t get delivered directly from our highly efficient Customer Fulfillment Centres, it s loaded onto one of our HGVs and taken to one of our 18 delivery hubs for delivery. A standard HGV can transport seven Ocado delivery vans worth of shopping. To increase our efficiency, in 2007 we started investing in double-deck HGVs, which can carry 12 delivery van loads. 95% of deliveries from Dordon CFC to hub are now on double-deck HGVs; Andover CFC is not yet delivering to our hubs but is only equipped with double-deck trailers, and Hatfield CFC uses double-deck HGVs as much as possible. In 2014 the Carbon Trust identified that we could save 574 tonnes of carbon per year by limiting the speed of our HGVs by just 4 mph; we started restricting our HGV fleet speed in the same year. That year, we also fitted all of our HGVs with Fleetboard, which is a hardware and software system by Mercedes using sensors to monitor driver efficiency. HGV drivers receive a regular score, which we share on a leaderboard internally to encourage friendly competition in safe and efficient driving. Alternative fuels Future proofing our fleet is part of my job. Both London and Oxford have announced plans for zero emissions zones which will come into effect over the next few years; we ve been looking at diesel alternatives for quite some time. We bought our first electric vehicles in 2010, and we re at an advanced stage to start procuring and trialling custom vehicles in earnest. We re looking at hybrid vehicles for more remote areas, and gas power for our HGVs. Running cleaner, more efficient vehicles is the right thing to do it s an exciting time to be working in fleet services. Matthew Leigh, Ocado Vehicle Technical Specialist 8 9

Pillar 2: Environment Pillar 1: 2: Education Environment Food waste Delivered to date 1,677.3 carbon tonnes saved per year by replacing lighting with LEDs in Hatfield CFC. 574 carbon tonnes saved per year by limiting HGV fleet speed to 55 mph. 223 retired Ocado vehicles sold to MyGreenFleet. 1,892 spare parts salvaged from recycled Ocado vans. Future goals Improve the efficiency of our CFCs. Develop fuel-efficiency technologies within our operation. Improve aerodynamics, capacity, and fuel-efficient technology for our fleet. Strategically expand our delivery spokes to reduce delivery van mileage. Include General Waste (Scope 3) in our reporting for 2016/2017. 223 retired Ocado vehicles sold to MyGreenFleet 55 574 carbon tonnes saved per year by limiting HGV fleet speed to 55 mph Our business model is highly efficient. Our huge Customer Fulfillment Centres are the equivalent size of 30 supermarkets, so we re can forecast with greater accuracy than a supermarket with lots of stores. Our technology is so advanced that products can arrive in one of our CFCs and be out for delivery in as little as five hours. Where products arrive chilled, we maintain temperature below 50C from arrival to the point of delivery in one of our fuel-efficient, temperature-controlled vans. Multiple factors mean that relative to our industry, our food waste is incredibly low. Less than 0.017% or 1 in 6,000 items goes to waste. Most of this wasted food goes to anaerobic digestion, rather than landfill. However, while this number is very low, we don t feel it s low enough. We work really hard to make sure that no edible food goes to waste. We ve identified points within our business where food is at risk of being wasted, and are looking for more ways to reduce that risk. One area of risk is around fresh product shelf life. Our customers want to plan meals and shop online with confidence; concerns about produce quality and short use by dates are one of the primary barriers to online shopping. We promise to deliver them shopping with great shelf life and we call this our Life Guarantee. Customers are shown how many guaranteed days of shelf life products have as they shop on the website; our target is to ensure that actual product life is in fact double the guaranteed life. A tiny proportion of products have less guaranteed life than the target we set, but they re still fresh, and certainly edible. The first port of call for managing risk around shelf life is to try and incentivise customer purchase by offering it at a deep discount as the customer checks out a bit like the yellow sticker system in a supermarket. If this doesn t work, then we have relationships with several Food Partners to help make sure edible food doesn t go to waste. We cover this below, but if you re interested in reading about this in greater detail, have a look at Pillar 3: Eating Well. 10 11

Pillar 2: Environment Pillar 1: 2: Education Environment Redistributing edible food One way we make sure fresh food doesn t go to waste is through working with Company Shop the UK s largest redistributor of surplus product. We sell products to them when they fall below our Life Guarantee, and they resell it to customers at a discounted price. Since 2016, we ve also donated a portion of the food we would have sold to their charitable arm, Community Shop. Ocado shares our ambition to unlock the potential in surplus, ensuring that we achieve positive social and environmental impact with surplus stock, rather than see it go to waste. We commend Ocado s environmental commitment and we look forward to continuing to work together as strategic partners for years to come. Joanna Holland, Company Shop We ve built up partnerships with local food banks and charities at each of our Customer Fulfillment Centres, too. Each partner has built their own way of serving their local communities, and reach thousands of people who are at risk of, or experiencing, food poverty. When we started, we issued around 50 food vouchers to residents in need every month; we now issue at least this amount every week. We re using excess donations to support 153 community groups, 15 breakfast clubs in secondary schools, and are working towards sustainability with initiatives like our honesty shops. Without doubt, this is the best project that I have ever been involved with and shows what is possible by the public and third sector working with a brilliant private sector partner. Ocado s support has meant that we reach thousands of people in our local and surrounding communities, making a real difference to people s finances, health and wellbeing. Bob Trahern Assistant Chief Executive at North Warwickshire County Council 12 13

Pillar 2: Environment Pillar 1: 2: Education Environment A portion of our edible surplus is donated to zoos and wildlife parks located near our Customer Fulfillment Centres. Paradise Wildlife Park in Hertfordshire has been a Food Partner for over 10 years, Twycross Zoo near our Dordon CFC became a Food Partner in 2014, and we ve just started working with Marwell Zoo near our Andover CFC. Another point where food becomes at risk of being wasted is after despatch. If a customer misses or cancels their delivery, or returns an unwanted product on the doorstep, it s usually not practical to take it back to our CFCs for redelivery and instead we donate it to charity. Of our 17 delivery hubs, 11 have a Food Partner; we work with Fareshare to redistribute whole bags of returned shopping to multiple charities. The Real Junk Food Project also receive returned shopping from our delivery hubs in Manchester, Sheffield, Leeds, Knowsley, and Milton Keynes, as well as Dordon CFC. They turn this food into hot, affordable meals at various cafés and events operating under the Pay as you Feel model. Our animals need hundreds of tonnes of forage, fruit, vegetables and meat per year, and that comes with quite a price tag. The agreement we have with Ocado doesn t just help keep the animals well fed, it means we can spend the money we save on priority conservation and education projects. Anna Westbury, Team Leader at Twycross Zoo Ocado and the Real Junk Food Project have been working successfully in Leeds from day one. We ve been able to use donated food to help the Fuel For School project in Leeds and Bradford, giving 15,000 people access to food on a weekly basis. We re also helping six Pay as you Feel community cafés produce meals in the Leeds area. Long may the relationship continue both in Leeds, and across the country. Thanks for the donations! Keith Annal, Logistic and Customer Relations Lead, Real Junk Food Project Leeds 14 15

Pillar 2: Environment Pillar 1: 2: Education Environment General waste Delivered to date Over 2,200 tonnes of food donated in 2017. Food Partners at Hatfield, Dordon and Andover CFCs. 17 Food Partners across the UK. Food Partners at 11 delivery spoke sites and two CFCs for customer returns. Future goals Donate 100% of all edible food waste to Food Partners. Grow partnerships at existing CFCs. Develop partnerships at future CFCs. Partnerships for all delivery hubs. Explore Ocado employment opportunities for charity volunteers. Since we formalised our Corporate Responsibility strategy in 2015, we ve prioritised reducing greenhouse gas emissions and redistributing food to reduce waste. Consequently, we don t report on centralised waste that s things like cardboard, broken hardware, and old uniforms. (The exception is carrier bags, which you can read about below.) This is something we re keen to address, and you should start to see figures and more in depth reporting on this in future Corporate Responsibility reports. Despite this, reducing our general waste is very much on our agenda. Here are a few things we ve done to help reduce this type of waste. Uniforms Over 5,600 people at Ocado wear a uniform for work each day in 2015 we started recycling them, rather than incinerating them, and we work with the Textiles Unit at HMP Northumberland to refashion them into useful products. This is an interesting project which is covered in greater detail in Pillar 1: Education. Recycling totes Plastic totes are a key part of the process of delivering shopping to customers. We use some types of totes for storage in our CFCs. Red delivery totes make their way around our CFCs, into the back of a delivery van, and get carried to the doorstep. When it s time to recycle, we work with a polymer recycling specialist, Aurora Manufacturing, based in Leigh, Cheshire. Totes are chipped and melted into pellets before being sold on and transformed into things like garden pots, office chair bases, and golf tees. 16 17

Pillar 2: Environment Pillar 2: Environment Carrier bags Grey is greener We don t bleach our plastic, that s why our carrier bags are grey. 87% of bags are returned to be recycled into new Ocado bags. The life cycle of an Ocado bag Every customer s shopping starts out as a bright red, plastic tote (crate), with three carrier bags in it. Bags are important for maintaining food hygiene standards, keeping us in line with UK and EU legislation, and for helping our drivers deliver food into our customer s homes. On average, our customers order 45 items that s about 12 carrier bags of shopping. With 260,000 or so orders per week, that s a lot of carrier bags. In 2007 we were the first supermarket to launch a proactive plastic bag recycling scheme. Our drivers ask customers to hand back used bags for recycling, including competitor carrier bags, we re not fussy. A large proportion of plastic recycling in the industry at large is done in east Asia, but to keep our carbon footprint low, we recycle all our bags here in the UK. They re turned into new Ocado bags, and the shopping cycle continues. Bag Buy Back scheme In 2015, the UK Government introduced the Single Use Carrier Bag Charging legislation in England. We thought this might stop customers from returning bags to us for recycling, so we decided to build on our already successful recycling scheme by offering 5p for every bag returned competitor carrier bags included. The vast majority of carrier bags are returned, and most of the carrier bag charge proceeds fund our Bag Buy Back scheme, which promotes the legislations aims: to reduce bag littering and protect wildlife. Read more about what happens with the remaining funds in The Ocado Foundation booklet at the end of this report. Delivered to date 138.8 million bags recycled in 2017. 345k donated to recycling and litter picking projects in 2017. 55 tonnes of uniform recycled at HMP Northumberland. 5,349,532 funds generated from the 5p levy in 2016/2017. Future goals Formalise General Waste reporting, and have it assured by the Carbon Trust. Develop ways to reduce General Waste. Increase partnerships with recycling and litter picking projects. 18 19

Pillar 3: Entrepreneurship Corporate Responsibility Supporting entrepreneurs in food, technology and education, to create better futures.

Pillar 3: Entrepreneurship Pillar 3: Entrepreneurship Supplying Ocado Ocado began life 18 years ago as a small start-up with passion, an entrepreneurial spirit, and an outside-the-box ambition: to change the way the world shopped. As we ve grown, we ve used our experience and influence to encourage other entrepreneurs in the grocery sector, in our own business, and in education. We continue to seek out opportunities to encourage and reward entrepreneurial thinking, believing that it has the power to create radical change. We ve acquired a reputation for spotting the next big thing in food and drink; in 2014, internal research suggested at least 70% of our supplier base was made up of micro businesses and small to mediumsized enterprises (SMEs). How have we managed that? Well, at Ocado, everyone s shopping is packed in one of our three Customer Fulfillment Centres. Our business model allows suppliers to sell to over 70% of the UK with less than a pallet of stock. With a traditional supermarket model, suppliers often need to provide minimum quantities and stock multiple stores at launch; this can prove difficult both financially and logistically. To make our listing process more accessible, at the end of 2016 we created a supplier application website. Here, brands can access helpful resources on how to work with us, tell us about their business, and start the ball rolling with an application. 1,037 businesses have applied through the supplier website since June 2016. 178 entrepreneurs have met with our Buyers, and 33 brands have already launched to our customers on Ocado.com. 70% of supplier base is SMEs 33 small suppliers launched through supplyocado.com 2 3

Pillar 3: Entrepreneurship Pillar 3: Entrepreneurship We sold our first ever pot of guacamole through Ocado. At the very start of our journey they were top of our shortlist of retailers we wanted to work with. We know Ocado customers care about what goes into their products, and we know Ocado take seriously their willingness to help nurture and support new, innovative brands. Their online supplier portal made the listing process very smooth. All it takes is a two-second Google search and then the application itself, which allowed us to structure our thoughts, and helped us prepare for meeting our Buyer. Having a really simple and clear process is incredibly helpful I think most food entrepreneurs know how difficult it can be to get your product into the hands of a Buyer! Even if you re rejected through the supplier portal, it helps you to understand the process, reevaluate your proposition, or figure out what you need to get in place before you come to market. Gaz Booth, Holy Moly Guacamole It s not just getting listed that can prove tricky for SMEs. Building robust supply chain processes such as order forecasting, figuring out transport, and getting packaging right so products get to customers in the best condition, all require a certain level of expertise. In 2016, we established the Ocado Primary Network, a team dedicated to improving logistics for small suppliers at launch, and as they grow. While their sales volumes remain low, instead of paying for stock to be delivered via parcel courier to multiple sites a costly and unreliable process they work with a consolidator. Small suppliers deliver all of their stock to one place, where it s carefully stored until required. The consolidator brings lots of different brands to our sites all at the same time; they also deliver to any other customers the supplier has too, such as Selfridges. The benefits are reduced transportation costs, a higher level of order accuracy, and more reliable availability to customers as a result. 4 5

Pillar 3: Entrepreneurship Pillar 3: Entrepreneurship Setting up your supply chain and commercials as a small business can be difficult. Ocado supported us, helping us understand processes and advising on what could make things work better. They ve helped us grow from a very small start-up to a SME very quickly, developing into a business with a strong, stable supply chain working with a number of retailers. Being listed through Ocado gives us a huge geographical reach and lends credibility and prestige to our brand. We have a strong product and brand which has been supported by a fantastic team at Ocado including Marketing and PR, Supply Chain and our fabulous Buyers, working with us to drive growth and deliver commercial success for all. The launch of Holy Moly has been a big success and we look forward to working together for many years to come Gaz Booth, Holy Moly Guacamole Delivered to date 33 SMEs launched since 2016 through our supplier portal. 150 small suppliers in the Ocado Primary Network. 2 full time team members dedicated to providing support. Future goals Continue to source and support small suppliers. 6 7

Pillar 3: Entrepreneurship Pillar 3: Entrepreneurship Britain s Next Top Supplier Cash flow can prove problematic for micro businesses and SMEs. But online customers primarily discover new products through promotions, and through media support. We launched Britain s Next Top Supplier in 2013. Our aim was to give the small suppliers we were most excited about the best possible start: the winner earns a launch package worth 20,000 and a listing at Ocado.com for a minimum of six months. Aimed at retail-ready food and drink businesses looking for nationwide distribution for the first time, qualifying entrants are invited to attend a Meet the Buyer day, then whittled down to a shortlist. Finalists present their products to a panel of judges, which in previous years has included our Chairman Lord Rose, celebrity chef Tom Kerridge, our Director of Retail Lawrence Hene, and Head of Buying, Rose Price. You don t have to win the competition to get listed; over the years we ve ranged numerous brands discovered through Britain s Next Top Supplier. 2017 We applied online for Britain s Next Top Supplier after hearing about the competition at a trade show. We were invited to the Meet the Buyer day, where we learned more about Ocado, met other producers in our sector, and presented our products to a Buyer. It was a great learning experience, and we left feeling really excited. We were told we d made the shortlist very quickly, and invited back to London to present to the judging panel. Our brief was very open; we were simply told You have 20 minutes to tell us about your business. It felt very Dragon s Den. We left feeling extremely positive I thought, no matter what happens next, I ve learned lots and we ve had a great discussion. Days later I got a call to explain we d won. We were live within weeks of the competition. We chalk this up as a massive success; winning the award and being nationally recognised has been game-changing, and the reception from our customers and suppliers has been really positive. Barnaby Edwards, The Garlic Farm, BNTS winner 2017 8 9

Pillar 3: Entrepreneurship Pillar 3: Entrepreneurship Delivered to date Three winners; Hiver Beer, Manfood, The Garlic Farm. 21 brands discovered through the competition, and listed. Future goals Continue to support food and drink entrepreneurs through Britain s Next Top Supplier. 10 11

Pillar 3: Entrepreneurship Pillar 3: Entrepreneurship Homegrown talent Ocado Inventor Award There are people at Ocado who are paid to invent things. There are also people who come up with amazing ideas for new inventions that can revolutionise our business, outside of their day jobs. To encourage our technical staff to innovate and think differently, in 2014 we launched the Inventor Award. Employees listed as an inventor on a patent application recieve a cash reward 12 months after the application is first filed; then a second sum on first grant of their case. This recognises their contribution to the growth of our business, and rewards problem solving, entrepreneurial thinking. Ocado Business Innovation Awards As covered in the Education Pillar, we re constantly testing, evaluating and improving our business to drive efficiency and growth. With this in mind, in 2015 we launched another competition to reward and recognise employee innovation. Any employee can enter, and the first prize is 5,000, with 500 awarded to each runner up. Our employees each have a unique perspective of how our business can improve, and can use their understanding to make suggestions that could create tangible benefits for our business. Our first winner, Luke Cunningham, was a former Customer Service Team Member now working in our Insurance team. His winning concept was for a delivery van panic button, which wirelessly activates a camera and a personal alarm to keep our drivers safe. Ocado prides itself on innovation; Ocado is here today because great ideas have been built upon, developed and implemented. Good ideas are not limited to our design engineers or senior managers everyone can play a part in making Ocado even better. Working on the front line preparing and delivering customer orders can bring the simplest and most innovative ideas. Tim Steiner, Ocado CEO Delivered to date 61 patent applications filed through the Inventor Award. 10,050 awarded to named inventors to date. 426 ideas generated through the Business Innovation Awards since 2015. Future goals Continue to encourage and reward innovative thinking within our business. 12 13

Pillar 3: Entrepreneurship Pillar 3: Entrepreneurship Educating entrepreneurs in Engineering and Technology Engineering Education Scheme The Engineering Education Scheme (EES) has helped over 30,000 Year 12 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 alumni go on to complete a STEM related degree, with a further 71% working in engineering or technology companies for their first job. In September 2017, we signed up to this scheme, partnering with Monk s Walk School in Welwyn Garden City, Hertfordshire. Our Logistics Development and Engineering team agreed to mentor six A Level students, providing them with a special Ocado challenge to solve: reducing Robot tyre wear and tear. Ocado Technology projects For a number of years, our Technology team have offered university interns the opportunity to work on exciting projects ranging from MMO game design, to robotic simulation, to interactive product roadmaps. These projects are designed to be interesting, challenging and selfcontained, allowing the intern to develop solutions independently. During 2017, we had 19 interns working on various projects. University of Edinburgh summer intern, Chen Zhan Chen, designed and created a prototype for a long range Internet of Things (IoT) Monitor. Chen s project was a great success; the monitor was able to reach a theoretical maximum range of 22 km, cost less than 70 to produce, and is fast to deploy. A very interesting and multidisciplinary project that helped me understand how physics, electronics and computer science work together as the building blocks for the Internet of Things. Chen Zhan Chen, summer intern from the University of Edinburgh Delivered to date Mentoring pupils at Monk s Walk School through EES. 19 interns working on Ocado Technology projects in 2017. Future goals Continue to develop opportunities to foster entrepreneurship in education. Explore opportunities with universities to reward entrepreneurship. 14 15

Pillar 4: Eating Well Corporate Responsibility Creating a better future through food, one bite at a time.

Pillar 4: Eating Well Pillar 4: Eating Well Reducing food poverty As an online grocer, we have a natural connection with food. Here you ll see our focus on reducing food poverty in the UK: our goal is that no edible food is wasted on our watch. We re also supporting the role of food in health and nutrition for our customers, whilst continuing to offer them choice, convenience and award-winning service. Company Shop and Community Shop We make a commitment to customers that the food they buy will have a minimum number of days life left when it arrives in their homes. This helps them feel confident about shopping for groceries online, plan meals for their family, and reduce their own food waste. We call this promise our Life Guarantee, and customers can see how many days we promise on every grocery product we sell at Ocado.com. Maintaining this promise means that, despite our excellent forecasting processes, occasionally we have fresh produce that we can t sell to customers. To make sure this perfectly edible food doesn t go to waste, we sell it at a substantial discount, along with products with damaged packaging, to Company Shop, the UK s largest redistributor of surplus products. In December 2013, Company Shop launched a social enterprise called Community Shop. It s similar to the European social supermarket model; surplus products are heavily discounted and made available for customers meeting eligibility criteria. The scheme also works with members to understand the root cause of their food poverty, and creates a tailored programme plan to bring them back to financial stability. They provide classes and workshops covering healthy eating, self-confidence, debt and finance, life and career planning and how to do well at an interview. After completion, members can train as peer mentors to support others, progress to an intensive two-week programme concluding with an interview with a local employer, or sign up for a business insight course. This course aims to help people move into the world of work, or start their own business. 67% of Community Shop members reported eating more healthily after joining 2 3

Pillar 4: Eating Well Pillar 4: Eating Well Ocado has been an advocate for Community Shop since the outset. By enabling Community Shop to stock its surplus products, Ocado are helping us offer a balanced basket of good food at great prices to our members, who are living on the cusp of food poverty. Working together, we are enabling members to eat well, stretch their family budgets and begin to transform their lives. Joanna Holland, Company Shop and Community Shop Food Partnerships We make it our business to be efficient. Food can be received in our warehouse and be on the way to a customer s house in as little as five hours. We don t believe that any of our competitors have a supply chain that short, and that s down to us removing unnecessary steps in our supply chain. Although our food waste is very low just 1 in 6,000 food items are wasted we think it s a great shame for any food to go to waste when there are hungry people in the UK. Thanks to our delivery model and our shelf life commitment to customers, we re able to offer fresh and chilled produce, which is still in date, to Food Partners. This is a rather unique opportunity; most food banks and charities are only able to offer ambient products (canned or dried goods) to service users. We ve worked hard to develop partnerships with charities and local councils located in the areas around our Customer Fulfilment Centres and delivery hubs. We encourage and support them to operate like a delivery hub themselves, allowing them to help a wider range of the community. This ensures fresh food doesn t end up in landfill, and helps reduce food poverty for more people. What is a tote? It s what we call the plastic crates which travel round our warehouse on conveyor systems, with shopping added along the way. Each tote holds three bags of shopping. 4 5

Pillar 4: Eating Well Pillar 4: Eating Well From Fulfillment Centre to Food Partner One of our most exciting Food Partnerships is with Ediblelinks at Atherstone, which is near our Customer Fulfillment Centre in Dordon, Warwickshire. An ex-mining town in a rural area, Atherstone s community had experienced reduced financial and social opportunities. Although much of the area is now in employment, like other places in the UK, many families still fall below the poverty line. Because, like us, Ediblelinks started out as a small operation, they ve been willing to try lots of different ways to help people, and their entrepreneurial approach to battling food poverty is really exciting. ediblelinks connecting people and communities We re tackling food poverty in three ways. Firstly, families referred to us by public sector organisations are given food parcels based on their needs. Working with Ocado means we can offer fresh and frozen produce, as well as cupboard essentials, sanitary items, and baby formula. Secondly, we ve built relationships with 153 local community groups, and launched 15 secondary school breakfast clubs. Schools report these have increased attendance and created better relationships with parents, even suggesting the breakfast clubs holistically contributed towards better academic results. Finally, we don t want potential funding cuts to leave us vulnerable, risking thousands of people losing our support, so we re exploring sustainability. We came up with the UK s first food bank honesty shops. It s early days and we re tweaking the model, but we think this is a great way to help people now, and for the long term too. Sonya Johnson, Manager at EdibleLinks 6 7

Pillar 4: Eating Well Pillar 4: Eating Well Ocado delivery spokes and FareShare We re experts at getting food into our Customer Fulfillment Centres and out for delivery quickly and efficiently. We re not set up to send food back if a customer misses their delivery or cancels it after despatch. To ensure this perfectly good food doesn t go to waste, we work with food charities around our delivery hubs. One of these charities is FareShare. Several times a week, this charity collect whole bags of shopping from six of our sites, before redistributing the food to 350 charities across the south of England. They re reaching 84 community centres and cafés, 70 services helping people at risk of or experiencing homelessness, and 64 projects working with children and families. In the first year of our partnership, the food collected provided over 200,000 meals for people in need. Because the food collected from our delivery hubs is made up of entire bags of shopping, frontline charities preparing meals often have access to quite premium ingredients, like buffalo mozzarella, or flat iron steak, something which they really appreciate. More recently, FareShare have been collecting fresh food that has fallen below our shelf life commitment to customers from Andover CFC. To help them deliver more surplus food to local charities, last May, we donated one of our Food Partner cool vans to FareShare Southern Central. Cool vans Even if we re giving food away, we still want to make sure it s safe to eat. That s why we ask our Food Partners to collect fresh food using refrigerated transport. Although that doesn t sound complicated, it can be a big ask financially for small charities. This year, we came up with a solution: the cool vans project. We ve given some of our Food Partners a refrigerated van, and we pay for the leasing, maintenance, tax and insurance on their behalf, they just pay for the fuel. We also give all cool van drivers our Driver Risk Management training programme, to try and keep them safe on the road. It is really important to us to have a strong partnership with Ocado, a key innovator and leader of technology in the food industry. We are delighted to be receiving food from seven sites and look forward to the partnership going from strength to strength in the future. Lindsay Boswell, FareShare CEO 8 9

Pillar 4: Eating Well Pillar 4: Eating Well We were relying on finding volunteers with transport to collect non-perishable food from Ocado. Last Easter, we were given one of their refrigerated vans and our volunteers received their Driver Risk Management training. It s made a huge difference. Now we can offer people fresh vegetables and meat, which is more nutritious. Access to good food helps service users retain their dignity. As well as helping around 80 individuals and families a week, now we deliver food to St Albans & Hertsmere Women s Refuge, and St Albans City Church food bank. We can offer more for our community too; over the school holidays we served over 400 hot, nutritious meals to low-income families that wouldn t have been possible before. Ocado have always gone above and beyond. They really take an interest in our project. Delivered to date 2,200 tonnes of food redistributed in 2017. Partners at Hatfield, Dordon and Andover CFCs. Partners at 11 delivery hubs and two CFCs for customer returns. 17 Food Partners across the UK. 150,000 spent on the cool vans project in 2017. Future goals Donate 100% of all edible food waste to Food Partners. Donate more cool vans to our Food Partners. Grow partnerships at existing Customer Fulfilment Centres. Develop partnership at future CFCs. Partnerships for all delivery hubs. Explore Ocado employment opportunities for charity volunteers. Heather Ryan, St Albans Vineyard Church s FEED Coordinator 10 11

Pillar 4: Eating Well Pillar 4: Eating Well Promoting eating well to customers Donate Food with Ocado Ocado customers are a generous bunch. For quite some time, they d been asking us for a way to donate food to those in need as part of their weekly shop. In December 2014, we launched Donate Food with Ocado, which gives customers a way to donate 2.50, 5, or 10 to help fight food poverty as part of their weekly shop. For every 1 our customers give, we give 2 worth of food to our Food Partners. The beauty of this scheme is that rather than the Partners being overloaded with overstocks, like boundless baked beans, they choose what they need most from a long list of fresh and ambient products. This food is still fresh, but doesn t have quite enough shelf life left to satisfy the Life Guarantee we promise customers, so would usually be sold to Company Shop or Community Shop. Instead, we help Food Partners nutritionally balanced emergency food parcels for families in cricis. Delivered to date 261,195 donated by Ocado customers in 3 years. We ve donated food worth 522,390 to Food Partners. This equates to 90 tonnes of food. Future goals Grow existing partnerships with Food Partners. Find new Food Partners. Make sure no edible food goes to waste. Pricing With over 50,000 products far more than you ll find in your average supermarket we re focused on giving our customers choice. While we re not here to tell customers what to eat, we use technology, range and price to help them make informed decisions when doing their weekly shop. We re committed to the concept that eating well should be affordable, and even easy. That s why we ve made a Low Price Promise. Customers automatically receive a voucher of up to 10, if their comparable shopping would have cost less at tesco.com. On top of this, we have an average of 15,000 products on promotion every month, to help customers discover new products and make their weekly shopping more economical. Number of promotions on fruit & vegetables by month Official guidelines state that fruit and vegetables should make up over a third of what we eat every day. But regularly buying a wide variety of fresh produce can become expensive. In 2015, we decided to always have at least 100 promotions on fresh fruit and veg, to incentivise eating well. And we ve continually exceeded that commitment. Vitality is a health and life insurance provider that rewards members for living healthier lifestyles. We partnered with them in 2016 to offer their members discounts on an agreed list of healthy food and drink. If 30% of the value of their shopping is made up of these healthy products, the member gets free delivery, too. This incentive has meant that on average, 34% of Vitality customers shopping is made up of healthy items. In comparison, the average Ocado customer s shopping contains 25% of products on the list. 400 200 318 274 318 316 302 258 319 340 0 2017-1 2017-2 2017-3 2017-4 2017-5 2017-6 2017-7 2017-8 12 13

Pillar 4: Eating Well Pillar 4: Eating Well Choice Everybody s different. We re not just talking about taste; dietary requirements, religious restrictions, ethics, and health considerations play a huge part in the food people eat. On top of convenience and price, we want to support customers to eat well, whatever their dietary need or choices. There was a time when shopping with an allergy or intolerance meant preparing everything at home, or worse, missing out on certain foods altogether. Where free-from options were available, selection was frequently limited to supermarket own label products. We saw this as an opportunity to offer a better shopping experience, and set about building the biggest branded free-from range of any UK supermarket. We ve sourced over 2,000 products from suppliers from all over the world, and designed a free-from shop within Ocado.com, to make finding food an inspiring, convenient, and enjoyable customer journey. After launch, we were voted Best Large Online Supermarket in the Free-From People s Choice Awards 2014. We spotted that vegans and vegetarians faced a similar barrier. Whilst of course it s easy to find plenty of fruit and vegetables, when it comes to ready meals, deli options and meat substitutes, shopping can be more of a never-ending treasure hunt than a pleasure. Our vegetarian and meat-free shop is a curated collection of over 750 products, helping veggies and vegans browse more quickly and conveniently. They even voted us the Best Online Retailer for Vegetarians in the Veggie Awards 2015. Our website filtering system makes keeping kosher or halal, or avoiding allergens, as easy as ticking a box. Literally. We re continually improving search and filter functionality, so that customers can find the foods they want as fast as possible. Promotions are arguably the strongest influence on buying habits and, like our competitors, we frequently offer our customers meal deals. We believe that customers with dietary restrictions shouldn t miss out on great value promotions; so, where alcohol is included, we offer a non-alcoholic alternative, and there are always vegetarian options, too. Small adjustments can make a big impact to the health of our customers. That s why, in 2015, we launched Calorie Saver. This technology suggests lower calorie alternatives to customers just before they check out, and lets them know how much exercise would be needed to burn off those excess calories as an added incentive. If you want to find an interesting, specialised or unique food or drink, Ocado is usually the place to look. We work with hundreds of small to medium-sized businesses; shopping with us is a bit like having a huge farmer s market at your fingertips. This is a considered strategy which we talk about more in Pillar 3: Entrepreneurship. Essentially, we re helping customers discover food and drink, and support small businesses, without them ever having to leave the house. 14 15

Pillar 4: Eating Well Pillar 4: Eating Well Being a small supplier, we found it virtually impossible to get an opportunity to prove to any UK retailer that we not only have a great product, but we re a company worth trading with. Our product couldn t be found on the shelves of any other retailer and we had no proven track record of sales. Despite this, Ocado listened. They believed in us and gave our products the break we d be waiting for. Ocado listed six lines at first. Working closely with the Ocado Buying team, we promoted our products and marketed to the right customers. Now, over six years later, we have over 50 lines listed and are the no.1 premium brand in our category putting us in front of other larger brands. Without Ocado, our brand would not be as widely recognised as it is today. Malcolm Pullan (UK Commercial Director) Garofalo pasta Delivered to date At least 100 promotions on fresh fruit and vegetables every month. Extensive free-from, meat free, and organic ranges. Over 50,000 products available. Future goals Continue giving customers information to make informed nutritional choices. Promote foods that encourage positive nutritional choices. Provide extensive choice through small suppliers, free-from ranges and more. Use technology to inform, advise and promote food choices and alternatives. 16 17

Pillar 4: Eating Well Pillar 4: Eating Well Responsible retailing Ocado is a brand associated with excellence. We re committed to operating responsibly, complying with relevant laws and regulations, and maintaining the highest standards of professionalism, honesty, integrity, ethics and respect for human rights. We have over 12,000 employees, operations in the UK, Poland, Spain and Bulgaria, and over 50,000 products available. Our robust policies and codes of conduct to help support our employees and protect people throughout our supply chain. Ocado Citizenship Code All employees are expected to uphold the Ocado Citizenship Code, which explains our values and principles, as well as the policies we ve put in place to create a safe and legally-compliant working environment. This code covers our policies on Competition, Whistleblowing, Antibribery, Human Rights, and Responsible Sourcing. Responsible Sourcing Code All suppliers, manufacturers, and any other people involved with supplying Ocado are expected to comply with this code. It s based on International Labour Organisation conventions and recommendations. It s designed to be fair, achievable, easy to check, and to promote the ongoing development of our suppliers. Amongst other requirements, we insist on working conditions being safe and hygienic, employment freely chosen, and free from child labour. It s important to us that everybody understands that we won t tolerate modern slavery in any of it s forms in our business or supply chain. What is modern slavery? Servitude, slavery, forced or compulsory labour and human trafficking. Our purchasing Terms and Conditions make it clear that suppliers must comply with any applicable laws, regulations and our Responsible Sourcing Code. SEDEX We ve proactively used Supplier Ethical Data Exchange to help audit our supply chain since 2014; we ve been registered with the platform since 2008. This helps us be transparent with our business practises, and manage our performance around labour rights, the environment, business ethics, and health and safety. Before we start working with a new supplier, we ask them to register with SEDEX, complete the SEDEX Members Ethical Training Audit, or provide an equivalent audit which is no older than three years. Information gathered through audit allows us to identify areas of risk within our supply chain, and address them accordingly. We also keep and maintain a supplier tracking system internally, which we use to compare and manage information about our own label suppliers. 18 19

Pillar 4: Eating Well Ocado own label products Since launching in 2012, the Ocado own label range has grown to over 700 products. We are committed to offering customers quality products at competitive prices. We re proud to report that all Ocado bananas are and have always been Fairtrade. Our whole eggs have always been sourced from free range farms. They meet the highest RSPCA Assured welfare standards and are British Lion marked. Over 80% of our UK grown crops have LEAF Marque status and grown to the highest environmentally-friendly farming standards. In line with European Union regulations, none of our produce is genetically modified. 80% of our roast and ground coffee is certified by the Rainforest Alliance, too. All of our cod and haddock is MSC certified. Our poultry is all sourced within the UK; our beef and pork products are British or Irish sourced to Red Tractor or Board Bia Farm Assured standards. When sourced in the UK, lamb also meets Red Tractor s Farm Assured standards; when it s sourced from New Zealand due to seasonality, it meets Government assured standards. We re also actively looking at our packaging to find the most carbonefficient, environmentally friendly option. Waitrose products We have a sourcing agreement with Waitrose, which means our customers can purchase Waitrose branded goods as part of their Ocado shopping. Waitrose have their own strategy and policies around responsible sourcing, which we are entirely satisfied with. Further information can be found on the Waitrose website under The Waitrose Way. 20 21

Pillar 4: Eating Well Pillar 4: Eating Well 261,195 donated by Ocado customers in 3 years. 200,000 150,000 2,000+. meals donated last year through our partnership with FareShare. donating cool vans in 2017. free-from products available 2,200 tonnes of food donated promotions or redistributed in 2017. 100+ on fresh fruit and vegetables every month. 0.5m worth of food donated to food banks. 750+ products in our vegetarian and meat-free shop. 22 23

The Ocado Foundation Corporate Responsibility Like the ripple effect, small changes can make a big difference.

The Ocado Foundation The Ocado Foundation Supporting employee fundraising The Ocado Foundation launched in April 2015; it s the home of our charitable and fundraising activity, both internally and externally. Our aim is to help our employees, and our customers, make a difference across the UK, at a local level. We choose projects and charities where our impact will be greatest. Until recently, like many businesses, most of our fundraising efforts revolved around a charity of the year. Our employees voted, and we usually ended up donating to one of the same three national charities. While this worked, our employees wanted to support smaller, local projects. And, truthfully, our contributions were relatively small in comparison to national charity donations. We felt that by restructuring our charitable giving, we could help every one of our employees support their chosen charity, and have greater impact. When the Ocado Foundation launched, we began offering employees matched funding. No matter how our employees choose to fundraise in their own time, whether that s marathons, triathlons, 24 hours in a bath of baked beans, or bungee jumps, we match each fundraising effort up to 500 per person, every year. 2 3

The Ocado Foundation The Ocado Foundation Employee stories Ocado Foundation fundraising This year, I decided to fundraise for Magic Me, an arts charity which runs intergenerational projects to build stronger, safer communities. One of their projects is Cocktails in Care Homes, where people like me can volunteer an hour or two, sitting and having a drink with an elderly person. These people might have no family who visit, so it s a wonderful opportunity to combat loneliness and help generations understand each other better. I did the Three Peaks challenge, and raised just over 500 myself. The Ocado Foundation matched this, so I was able to donate 1,116, which I know Magic Me will be able to put to such good use. A couple of years ago my Nana died after a long fight with cancer, so I raised 1,000 for Cancer Research UK. It feels really good to be able to raise money for lots of different charities which are important to me. Naomi Bowler, Ocado employee Some of our employees choose to give back in other ways, and for those who choose to volunteer in their own time for a school, charity or community group, we fund up to 250 per year. I m the Chair of the PTA at Reed First School, my children s primary school. It s a tiny village school, only 42 children attend there. They re desperately in need of a library, which will cost 35,000. This year, Ocado gave me a donation of 250 for my time. They also donated a 100 Ocado gift voucher for our raffle, and when I raised 720 at the school s annual quiz, they match funded 500. This makes such a difference to our school, and I m so pleased they re able to provide this support. Charlotte Eeles, Ocado employee When our employees fundraise during normal working hours, for example by running a cake sale, raffle, or a special jumper day, this money goes into the Ocado Foundation pot. At the end of each year, all money in the pot is divided according to headcount and distributed to our different sites. That way, each site can autonomously choose to donate money to local or national charities which mean the most to their local team. Delivered to date Donations totalling 112,550 through the Ocado Foundation. 47,000 of match funding donated to date. 5,850 employee volunteering hours matched. 45,000 distributed across Ocado sites to donate to local charities in 2016/17. 59,700 donated to employees and charities in Ocado vouchers. Future goals Continue to support and reward our employees charitable efforts. Continue to distribute charity funding at a local level. 4 5

The Ocado Foundation The Ocado Foundation Carrier bag funds We ve been asking our customers to hand back plastic carrier bags since 2007, when we first began recycling them. We recycle these (and any other carrier bags handed back to us) into new Ocado bags. In 2015, the Single Use Carrier Bag Charge legislation aimed to reduce bag littering and resulting damage to wildlife. At the time, we launched our Bag Buy Back scheme; for every plastic bag our customers hand back to us for recycling, they receive 5p. (That includes any plastic bag, not just Ocado ones.) We believe our Bag Buy Back scheme operates within the spirit of the legislation to incentivise recycling, and reduce littering. In our 2016/17 reporting period, 128,388,732 plastic bags were issued to customers, generating net proceeds of 5,349,532 from the charge. Happily, 97% of plastic bags were handed back for recycling by our customers. We use the remainder of the funds 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 go to environmental causes, such as supporting work to help tackle littering. Here are some of the projects we ve invested in to date. 5.34m in proceeds from plastic bag charge in 2016/17 97% of bags handed back for recycling WRAP partnership In 2016, we partnered with the Waste and Resources Action Programme charity (WRAP) which works with governments, communities and organisations to improve resource efficiency. We ve pledged 500,000 taken from the proceeds of the Carrier Bag Charge, for recycling education projects to be spent over a five year period. Last year, primary schools across the UK were invited to take part in the Recycle Now campaign. Participating schools gave pupils recycling challenge sheets to fill in with their families at home. Schools with the highest percentage of pupils taking part won a range of prizes; the winning school received 1,000 cash, plus an exciting assembly with Cbeebies presenter Maddie Moate and Captain Busta, the character fronting the national Wastebuster education programme for primary schools in England. Although schools represent a small percentage of the overall waste generated in the UK, they house 100% of tomorrow s population. Our hope is that by educating and inspiring children to recycle today we are helping to secure a more sustainable future. Katy Newnham, Wastebuster 6 7

The Ocado Foundation The Ocado Foundation Recycle Week UK In addition to our partnership with WRAP working with UK primary schools, last September we supported Recycle Week. 2017 s theme Recycling It s Worth It, helped people discover what happens to household items we recycle, such as how shampoo bottles can be transformed into football shirts. We tied in with the activity by sponsoring communications for the food waste day during Recycle Week. This campaign helped families learn how much energy can be generated by recycling food waste, such as banana peels and eggshells, through a video shared on social media channels. Wednesday s activity reached more than 370,000 people, and the competition run alongside had over 560 entrants. In total, Recycle Week reached more than 3.5 million people. Cool vans As you may have read in Pillar 4: Eating Well, we ve partnered with a number of food banks and food charities around our spokes and CFCs. This forms part of our goal to make sure that no edible food goes to waste on our watch. We have a responsibility to make sure that the fresh food we donate stays safe to eat, so this year, we set about donating refrigerated transport to our charity partners who needed it most. We call this our cool vans project. We pay for the leasing, maintenance, tax and insurance on our charity partners behalf, they just have to pay for their fuel. We also give cool van drivers our Driver Risk Management training (read more about that in Pillar 1: Education), to help keep them safe on the road. In 2017, we ve donated five cool vans, to the delight of our charity partners. It s helped them to help more people, and increased our volume of food donations. As the Single Use Carrier Bag levy is focused on reducing waste and increasing sustainability, we think this is an appropriate use of the funds we ve collected. We partnered with Ocado over a decade ago and in this time they have helped to ensure we have ample produce to distribute across the community. We are extremely grateful to Ocado for the donation of a refrigerated food van and we know just how much of a difference it will make for our new outreach programme, ensuring we can distribute fresh food to those who need it most. Wendy Lewington, CEO of DENS CleanupUK This charity helps people combat litter in their local area. The majority of CleanupUK s projects focus on deprived areas; through helping people restore a sense of community and pride in their surroundings, there are often holistic benefits. People report that their communities feel safer, more welcoming, and friendlier after engaging with the projects. We got in touch after we heard about their Beautiful Boroughs project, which focused on deprived areas in 10 boroughs in east and north London. We decided to partner with them for five years, and donated money from the Single Use Carrier Bag charge to help them reach their funding target. The money we ve donated has enabled them to launch 40 additional litter picking groups, and extend the Beautiful Boroughs project to include Islington. 8 9

The Ocado Foundation The Ocado Foundation Cleanup UK continued... CleanupUK have just recruited a Project Coordinator to start work on the Beautiful Birmingham Project. She will focus on three of the most deprived areas in Birmingham, setting up and coordinating litter-picking groups. They have also newly appointed a Project Manager, who oversees two existing Project Coordinator roles in London, and litter-picking projects across CleanupUK. Funding for these new roles comes in part from our donations. We re excited to continue to support their projects. Next year we hope to involve Ocado employees in setting up litter-picking groups around our sites. There are plans for a local clean up around our delivery spoke in Dagenham in March, in line with the Great British Spring Clean. Delivered to date 200,000 donated to WRAP. 65,000 donated to CleanupUK. 30,000 donated to Recycle Week. 150,000 spent on the cool vans. Future goals Work with CleanupUK to target grot-spots nationwide. Invest a further 300,000 in our partnership with WRAP. Continue to explore ways to invest Carrier Bag Funds in waste and recycling projects. Ocado s generous financial support has enabled CleanupUK to continue to develop its work in the deprived areas of London and to expand to the deprived areas of Birmingham. We are now able to work with more people and achieve much greater impact. We know that our work makes a difference because we have been evaluating the Beautiful Boroughs Project for three years and our evaluations consistently show that the practical results of our work are stronger, cleaner and more connected communities in which people feel empowered and active. Ocado is CleanupUK s first significant corporate supporter and occupies a very special position in CleanupUK s family. I am looking forward to achieving great things in partnership with our wonderful new friends at Ocado. George Monck, Chief Executive, CleanupUK 10 11