TESCO is the third largest retailer in the world. Tesco was the first major retailer to introduce carbon labeling on products. Initially established as a grocery retailer in the UK, the company has expanded its business to various countries across the world and its operations include from clothing, electronics, furniture and petrol to books, banking, telecom and software. The phrase "The Tesco Way" coined by its CEO Terry Leahy seeks to hold out to the public the company’s philosophy and values. The company has been in the forefront in its risk management policies, technological innovations such as camera and self-service tills in the retail industry and CSR initiatives over the period of time. The business risk is different from the financial risk in relation to a company. While the financial risk is related to the capital structure and debt, the business risk is related to the economic conditions. The prevailing economic conditions in relation to an industry will affect the different companies differently, based on the relative exposure to the economy, which has been strategically structured by the companies concerned. However, failing to react in tune with the external environment is the greatest risk as it will affect the performance of the companies in the background of liberalization and globalization.
Current Risk Management Process
The company (2010) states “We recognise the value of the ABI [Association of British Insurers] Guidelines on Responsible Investment Disclosure and confirm that, as part of its regular risk assessment procedures, the Board takes account of the significance of SEE [Social, Ethical and Environmental] matters to the business of the Group... and incorporates SEE risks on the Key Risk Register.”