Asda has introduced a new sustainability-linked supply chain finance programme in collaboration with Lloyds, offering UK suppliers preferential payment terms and financing rates based on their sustainability performance. This initiative is designed to encourage suppliers to voluntarily share their sustainability data and demonstrate progress against key performance indicators, thereby qualifying for the most competitive financing available. Suppliers who choose not to participate will continue on their existing terms without any disruption.
Michael Gleeson, Chief Financial Officer at Asda, emphasised the importance of supporting suppliers in making sustainable changes, stating that the new finance scheme with Lloyds strengthens Asda’s commitment to its environmental, social, and governance (ESG) ambitions. The scheme is seen as a practical approach to fostering a more resilient and responsible supply chain.
EcoVadis, a global platform known for its sustainability ratings, has been tasked with independently assessing suppliers’ environmental, social, and ethical practices. This assessment will determine the tiered structure of the finance scheme, ensuring that suppliers with superior sustainability credentials receive the best terms.
The programme is an extension of Asda’s 2024 finance initiatives, which first introduced sustainability-linked supply chain finance with another bank. Both efforts aim to integrate sustainability standards into procurement and financing, with a particular focus on decarbonisation and social responsibility.
Aled Patchett, Managing Director and Head of Consumer at Lloyds, expressed pride in supporting Asda’s efforts to enhance supply chain resilience, noting that the programme’s transition to reward sustainability efforts will further support British businesses and assist Asda in meeting its own ESG objectives.
Suppliers meeting the criteria can begin accessing the scheme from October. Asda already requires its largest suppliers, who account for approximately 80% of its product carbon emissions, to submit sustainability data through EcoVadis.
