M&S chief defends plans for group to become world's most sustainable retailer

Sir Stuart said plans for the retailer to become the world's most sustainable retailer by 2015 were "the right thing to do" following the success of an earlier phase of the scheme, called "Plan A".

"We launched Plan A back in 2007, and, fundamentally, that has been so successful that what we decided to do was accelerate phase two of that, which is still called Plan A, but put bigger and tougher targets in," Sir Stuart told BBC Breakfast.

"What we have been able to do, is we have been able to reduce prices, we have been able to increase the wages that we are paying to people in the Indian and African sub-continents, and we have been able to pass on to our customers goods which are sourced in a more ethical way."

"Plan A was launched in 2007 by M&S with 100 commitments in five areas, including climate change, sustainable raw materials, waste and health, and saved 50m in efficiencies," he said.

Under the new phase of the scheme, the company has unveiled 80 new commitments including the conversion of 50 per cent of its food, home and clothing items across 36,000 lines to Plan A status over the next five years.

To achieve the benchmark, each product must have at least one ethical or sustainable quality, such as being made with free-range ingredients.

M&S wants all of its products to comply by 2020 and is encouraging suppliers to put best practice in place.

The company also said it will work with clothing suppliers in Bangladesh, Sri Lanka and India to agree a fair, living wage for workers after a pilot programme in Bangladesh.

Sir Stuart defended the wage being offered to incoming chief executive Marc Bolland, the former Morrisons boss.

"We are paying him a fair wage. We are paying him 975,000 a year, which is a lot of money but it is the sort of wage that a man running a business of this size would command," he said.

"The second part of the controversy, if you like, was the fact that he had some money put aside that he had earned at Morrisons that we had effectively to buy out.

"The third part is, he has got incentives. If he makes his incentives over a three-to-five-year period, the shareholders will be happy, the customers will be happy, the staff will be happy. The business will be doing very well."

His remarks have been made after M&S hit the headlines over boardroom pay this year with the total 15m package offered to Mr Bolland, which includes compensation for share options sacrificed at Morrisons.

Sir Stuart's comments come after major M&S shareholders were reported to have called for him to take a pay cut.

Leading investors want Sir Stuart's 1.13m pay packet to be slashed when Mr Bolland takes over the reins, with one calling for a pay cut of at least 20 per cent, according to newspaper reports.

Investors are said to be pressing for executive pay to reflect the tough economic climate as the economy crawls out of recession.

M&S refused to comment on the pay cut demands although sources close to the retailer said that "notice had been taken" of their concerns.

The high street giant has warned of tough times ahead for shoppers in 2010 despite the retailer's first like-for-like sales growth in more than two years during the the 13 weeks to December 26.

Last year, the group reported a 40 per cent drop in full-year profits, to 604m, and slashed its dividend payment by a third – the first dividend cut since 2000.