News

Asda sets up ESG-geared incentive for suppliers

By Bethan Grylls

- Last updated on GMT

Asda launches a new sustainability-linked feature to its existing Supply Chain Finance programme with the help of HSBC UK. Credit: Asda
Asda launches a new sustainability-linked feature to its existing Supply Chain Finance programme with the help of HSBC UK. Credit: Asda
The new Asda scheme will be tacked on to the supermarket’s existing Supply Chain Finance programme.

Launching in January 2025, the scheme will offer more than 250 Asda suppliers access to three tiers of enhanced rates of financing.

This new voluntary feature will be linked to Asda’s existing Supply Chain Finance programme, developed in partnership with HSBC, which its suppliers already have access to.

Access to each of the three tiers will be based on suppliers disclosing their ESG performance data, establishing commitments and taking action on shared sustainability goals.

The retailer will use EcoVadis’ data platform to score performance, with those who meet KPIs and share their data rewarded with enhanced rates.

Particular focus will be paid for decarbonisation, but the scheme will also take into account other areas of ESG, such as social initiatives.

The supermarket’s largest suppliers – those accountable for around 80% of its product carbon emissions – are already asked to share sustainability data through the EcoVadis assessment platform.

Commenting on the news, Asda’s chief financial officer, Michael Gleeson said the new scheme represents a crucial step in the retailer’s own decarbonisation and ESG journey, with supplier engagement a must.

With roots dating back to a Yorkshire family business in the 1920s, Asda has grown into a major retailer, employing over 150k people, and serving circa 16m customers each week across 1,200+ UK locations and online.

“We’re pleased to continue our long-term partnership with Asda to support its sustainability ambitions,” ​added Vivek Ramachandran, global head of GTS at HSBC.

“By incentivising suppliers to share ESG data and improve their sustainability performance, this financing solution encourages transparency and helps to drive better ESG practices in Asda’s global supply chain.”

Asda has assured 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. Suppliers will also continue to receive payment within 14 working days as part of the supply chain finance programme.

In other news, Food Manufacture shares the latest movers and shakers - read our September appointment round-up.

Related news

Show more

Follow us

Featured Jobs

View more

Webinars

Food Manufacture Podcast

Listen to the Food Manufacture podcast