Asda has launched a new supply chain finance scheme with Lloyds Bank, aiming to drive sustainability progress through the use of financial incentives.
The supermarket will provide access to preferential rates for 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 has appointed Ecovadis, the global sustainability ratings platform provider, to help assess and improve its suppliers’ environmental, social, and ethical performance across their value chains. This data will be used as part of the finance scheme.
The new Asda and Lloyds scheme follows the retailer’s 2024 partnership with a separate bank, which was its 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.
“Supporting our suppliers in making meaningful, sustainable changes is central to our wider ESG ambitions,” said 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.”
Aled Patchett, MD and Head of Consumer at Lloyds, added: “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 will be able to take advantage of the scheme from October this year. Asda noted that there will be no operational disruption to existing suppliers in the programme, and those who choose not to engage will remain on current payment terms and default rates.
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