Asda Unveils Sustainable Supply Chain Finance Program, Promising to Reward Genuine Progress

Asda has launched a new sustainability-linked supply chain finance scheme in partnership with Lloyds Banking Group. The retailer is converting its existing program to give domestic suppliers access to preferential rates tied directly to their sustainability performance.

Through this initiative, suppliers will be encouraged to share sustainability data, commit to measurable goals, and take steps toward achieving them. In return, they will receive enhanced financial terms, including better rates and faster payments.

The scheme works on a tiered basis. Those suppliers that demonstrate strong performance against key sustainability indicators and are willing to provide data will benefit from the most competitive terms available.

To ensure credibility, Asda has brought in EcoVadis, a leading global sustainability ratings platform. EcoVadis will help evaluate suppliers’ environmental, social, and ethical performance across the value chain. Their assessments will play a key role in determining how preferential terms are awarded.

This move builds on Asda’s earlier partnership with another bank in 2024, which marked its first sustainability-linked enhancement to the supply chain finance scheme. As with that arrangement, EcoVadis scoring is central to embedding stronger sustainability practices, particularly in areas such as decarbonization and social responsibility.

Michael Gleeson, Chief Financial Officer 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.”

The introduction of this second sustainability-linked programme underscores Asda’s long-term commitment to supporting its supply chain in transitioning toward more sustainable business models. Suppliers who meet the criteria can start accessing the benefits as early as October. For those who choose not to participate, existing payment terms and rates will remain in effect, ensuring no disruption to operations.

Currently, Asda already requires its largest suppliers, who are responsible for about 80 percent of the retailer’s product-related carbon emissions, to disclose sustainability data through the EcoVadis platform. This latest initiative extends that expectation while creating tangible financial incentives for suppliers across the network to take action.