In a speech called ‘Green Grocer? Tesco, Carbon and the Consumer’, Tesco CEO Sir Terry Leahy announced that the store will spend £500 million developing a “carbon calorie counter” scheme that will allow environmentally-aware shoppers to develop greener shopping habits.

However, the chain refused to follow the example set by Marks & Spencer’s earlier in the week by making their operation carbon neutral, although they said they will move to reduce emissions. “I felt it inappropriate in an industry that is clearly carbon emitting to speak about carbon neutrality,” Sir Terry said.

Measures announced include cutting the price of low energy light bulbs by half, cutting down on the amount of goods transported by air, giving extra reward card points to those who buy ‘greener’ products, investing £5 million per year to fund research into creating greener products and services, and partnering with Oxford University to set up the Sustainable Consumption Institute, which will analyse the carbon footprint of every Tesco product.

Sir Terry also said that the sheer size of Tesco, and its popularity amongst consumers, would help to change the nation’s spending habits. He said he would make “sustainability a significant, mainstream driver of consumption” from the simple fact that 17 million of us shop with Tesco every week. In addition, there will be a “Kids Carbon Calculator”, intended to encourage interest in environmental consumer issues at a young age.

Environmental organisations welcomed the news, with Greenpeace saying it was a “major step forward”.