Sir Terry Leahy has renewed his call for the government to offer more incentives to companies to adopt green initiatives.

Speaking as Tesco announced a £25m investment in a Sustainable Consumption Institute at the University of Manchester, the Tesco boss said he continued to be frustrated by the slow pace of change.

"Business rates only reward empty properties, not a green building," he said. "They should be used to incentivise green buildings."

It still took far too long to get planning permission for green installations like turbines, he said, urging the government to simplify the planning process.

He said he was pleased with the progress the company had made since announcing a raft of environmental pledges in January. But he remained concerned that green technology to help it achieve its targets was not yet "ready, reliable and at the right price" - and said this was another area where the government could help with by offering incentives.

"Taxes and regulations are not changing fast enough to achieve this [improvement in technology]," he said.

Sir Terry reiterated Tesco's intention to label all products with their carbon footprint. However, he warned that it was likely to be spring before the first labels were seen. The "sheer complexity" of the science meant the initiative was taking a long time to develop and it could be years before emissions for all products had been calculated.

Highlighting the carbon footprint of products would allow Tesco to offer low-carbon products alongside conventional lines, he said, adding that the five-year investment in the Sustainable Consumption Institute demonstrated its commitment to tackling environmental issues.

"It will address some of the most pressing questions such as how to empower customers to buy green lines."

The institute will co-ordinate a range of research projects evaluating new technologies, comparing how different store formats and shopping channels encourage greener shopping habits and assessing different types of packaging. "The results of this research will be there for all to share," said Sir Terry. "The problems of climate change are too complex for one organisation to gain advantage."

The Grocer has organised a conference on green issues.