Sainsbury’s has pledged to spend £1bn to become a carbon-neutral business by 2040, 10 years ahead of the government’s target for a net-zero economy.

The supermarket chain said the 20-year programme would include cutting its carbon emissions, food waste, plastic packaging and water usage, while increasing recycling, promoting healthy and sustainable eating, and ensuring that its operations are net positive for biodiversity.

Measures planned by the retailer include making its fridges more efficient, increasing the use of alternative and low-carbon fuels among its vehicles, as well as halving its use of plastic packaging by 2025. The retailer is piloting a deposit return scheme in five stores where customers receive a 5p coupon for every plastic bottle they recycle.

Sainsbury’s chief executive, Mike Coupe, said the company was making the investment in order to “transform the way we do business and put environmental impact at the forefront of every decision we make”. He noted the firm had reduced its carbon emissions by 35% over the past 15 years, “despite the footprint of our business increasing by over 40%”.

“We invested £260m in over 3,000 initiatives over the last decade, including the start of our LED lighting programme and refrigeration,” Coupe said.

The grocer also said it would work with its suppliers and ask them to commit to reducing their carbon emissions.

Environmental group Friends of the Earth welcomed the move from Sainsbury’s. “Supermarkets have a huge influence on our personal carbon footprints, so the more they can do to embrace and encourage greener lifestyles, the better for us all,” said Mike Childs, head of policy.

He added: “Encouraging and supporting the switch to a more plant-based diet is particularly important – eating less, but better quality, meat and dairy would be healthier for people and the planet. The influence supermarket chains have over suppliers is also huge – they must use that to encourage better environmental standards while still ensuring a fair deal for farmers.”

Sainsbury’s is not the only supermarket to outline its sustainability goals, but it has set more ambitious targets than some of its rivals. Tesco wants to reach carbon neutrality by 2050 and recently announced that it would remove shrink-wrapped multipacks of tinned food from its stores as part of a drive to reduce its use of plastic packaging.

Meanwhile, German discount chain Aldi announced at the start of 2019 that it would buy carbon credits to offset all emissions from its 870 UK stores and 11 distribution centres. It also said it had worked to reduce emissions by switching to renewable energy, upgrading its fridges and freezers, and reducing fuel consumption in its distribution network.

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Despite these efforts, the retail industry faces many challenges in its bid to do business more sustainably. An academic study found that UK retail food outlets “are responsible for around 3% of total electrical energy consumption and 1% of total greenhouse gas emissions”.

Environmental campaigners have previously criticised supermarkets for running inefficient refrigeration systems. Most shops use open fridges, which are much more energy-hungry than those with doors. The UK’s hundreds of thousands of commercial refrigeration systems make up about 12% of the country’s carbon emissions. Energy bills can account for a third of costs for the typical retailer.

Supermarkets have also been condemned for adding to the UK’s food waste problem by rejecting crops that don’t meet quality standards, or which they don’t need due to fluctuations in demand. Over £1bn of produce intended for UK supermarkets is thrown away or fed to animals every year before leaving farms, according to a 2019 report by Wrap, the waste reduction body.