Asda Launches Supply Chain Finance Scheme to Encourage Sustainability Data Sharing with Suppliers

Asda, the UK's third-largest grocery retailer, has launched a supply-chain finance scheme with Lloyds to incentivize suppliers to share sustainability data and improve their ESG performance. Suppliers that meet the program's requirements can benefit from preferential financing rates, while those who do not engage will remain on current payment terms. The initiative aims to support Asda's goal of net-zero operations by 2040 and a carbon transition plan aligned with science-based targets to reach net-zero by 2050.

Asda, the UK's third-largest grocery retailer, has introduced a new supply-chain finance scheme in collaboration with Lloyds to incentivize its suppliers to improve their sustainability and share data. The initiative aims to drive sustainability progress and performance within Asda's supply chain, aligning with the retailer's broader ESG ambitions.

The scheme offers suppliers competitive financing rates that reward progress and encourage transparency. Suppliers meeting the program's requirements will have access to preferential rates on a tiered basis, dependent on their sustainability performance against a range of key performance indicators (KPIs). Those who do not engage will remain on current payment terms and default rates.

Asda has partnered with EcoVadis, a sustainability ratings platform, to evaluate the ESG performance of its suppliers. The retailer already asks its largest suppliers, responsible for around 80% of its product carbon emissions, to share sustainability data with EcoVadis. This new initiative expands on these efforts to include a broader range of suppliers.

Michael Gleeson, Asda's CFO, stated that the scheme provides "competitive financing that rewards progress and encourages transparency across our supply base." Lloyds head of consumer Aled Patchett echoed this sentiment, expressing pride in supporting Asda's efforts to build further resilience in its supply chain and meet its ESG goals.

Asda's stated aim is to deliver net-zero operations by 2040 for Scope 1 and 2 emissions and to develop a carbon transition plan aligned with science-based targets to reach net-zero by 2050 for Scope 3 emissions. With 98% of its emissions coming from Scope 3, collaborative efforts with suppliers and partners are imperative.

This new initiative is a significant step towards Asda's sustainability goals, demonstrating the retailer's commitment to driving climate action and promoting sustainable practices within its supply chain.

References:
[1] https://finance.yahoo.com/news/asda-incentivise-suppliers-sustainability-data-144215631.html
[2] https://finance.yahoo.com/news/asda-incentivise-suppliers-share-data-122331404.html