British supermarket chain Asda has teamed up with Lloyds to launch a new sustainability-linked supply chain finance scheme, which seeks to incentivise suppliers to disclose – and improve – their sustainability performance.
The new scheme will offer UK-based suppliers preferential rates based on sustainability performance, on a tiered basis.
Suppliers that perform strongly against their sustainability KPIs, and commit to sharing their sustainability data, will be rewarded with the most preferential terms, the retailer noted.
Asda has appointed sustainability ratings provider EcoVads to assist with the assessment of supplier performance across environmental, social, and ethical dimensions. This data will then be used to determine financing terms.
‘Meaningful, sustainable changes’
“Supporting our suppliers in making meaningful, sustainable changes is central to our wider ESG ambitions,” commented Michael Gleeson, chief financial officer at Asda. “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.”
The financing scheme with Lloyds follows on from a 2024 partnership between Asda and HSBC, which was the retailer’s first sustainability-linked enhancement for its Supply Chain Finance scheme. This scheme also utilised EcoVadis scoring to foster more sustainable behaviour, with a particular focus on decarbonisation and social initiatives.
Read more: Just 17% of consumers willing to pay a premium for more sustainable products
‘Further resilience’
“We’re proud to have supported Asda for many years in its work to build further resilience in its supply chain,” commented Aled Patchett, MD and head of consumer at Lloyds.
“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.” Read more here.
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