Asda is looking to incentivise its suppliers to progress their sustainability goals with the launch of a new finance scheme.
As part of the new scheme, which Asda has created in conjunction with Lloyds, the retailer will provide access to preferential rates for numerous suppliers on a tiered basis, dependent on sustainability performance against a range of KPIs.
The most preferential rates and payment terms will be offered to Asda’s suppliers that are performing strongly against their sustainability KPIs and sharing sustainability data with the retailer.
It has appointed global sustainability ratings platform provider Ecovadis to work with suppliers, with the aim of assessing and improving their environmental, social, and ethical performance.
The new scheme will replace Asda’s existing platform, which it launched in 2024 with HSBC UK. Asda said the Ecovadis scoring would help to embed strong sustainability practices throughout the retailer’s supply chain, with a particular focus on decarbonisation and social initiatives.
“Supporting our suppliers in making meaningful, sustainable changes is central to our wider ESG ambitions,” said Asda CFO Michael Gleeson.
“Through our new supply chain finance scheme with Lloyds, we’re strengthening that commitment – offering competitive financing that rewards progress and encourages transparency across our supply base.
“It’s a practical way to support our suppliers in making sustainable changes to their business, while building a more resilient and responsible supply chain for the future.”
Lloyds MD and head of consumer Aled Patchett added: “We’re proud to have supported Asda for many years in its work to build further resilience in its supply chain. Our existing programme has successfully supported suppliers over the years and converting it to reward sustainability efforts will not only deepen support for British businesses, it will also support Asda in meeting its own ESG ambitions.”
Asda already asks its biggest suppliers, which account for 80% of its product carbon emissions to share their sustainability data through the Ecovadis platform. Suppliers who meet the preferred criteria will be able to start benefiting from the new scheme from October, it said. However, it also pointed out that the scheme was voluntary and suppliers that did not engage would remain on current payment terms and default rates.
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