Asda has launched a new sustainability-linked supply chain finance scheme with Lloyds, as the retailer aims to use financial incentives to drive sustainability progress and performance within its supply chain.
Asda will provide access to preferential rates for numerous suppliers on a tiered basis, dependent on sustainability performance against a range of KPIs.
Suppliers performing strongly against their sustainability KPIs and sharing their sustainability data will be rewarded with the most preferential terms.
Asda have appointed Ecovadis, the global sustainability ratings platform provider, to help them assess and improve their supplier’s environmental, social, and ethical performance across their value chains. This data is used as part of this scheme.
The new Asda and Lloyds scheme follows the retailer’s 2024 partnership with a separate bank, which was Asda’s first sustainability-linked enhancement for its Supply Chain Finance scheme. As with the other scheme, the EcoVadis scoring will help to embed strong sustainability practices throughout Asda’s supply chain, with a particular focus on decarbonisation and social initiatives.
The introduction of an additional sustainability-linked supply chain finance programme highlights Asda’s commitment to improving and supporting its supply chain in making sustainable changes to their business.
Michael Gleeson, chief financial oficer at Asda, said: “Supporting our suppliers in making meaningful, sustainable changes is central to our wider ESG ambitions. 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.”
Aled Patchett, MD and head of consumer at Lloyds, said: “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.”
Suppliers who satisfy the criteria are able to benefit from the scheme from as early as October this year. There will be no operational disruption to existing suppliers in the programme. Suppliers who choose not to engage will remain on current payment terms and default rates.
Asda already asks its largest suppliers – those accountable for around 80% of its product carbon emissions – to share sustainability data through the EcoVadis assessment platform.
