Asda has unveiled a new sustainability-focused enhancement to its Supply Chain Finance scheme in partnership with HSBC UK. Starting in January 2025, the voluntary programme will offer over 250 suppliers access to three tiers of improved financing rates. Access to each tier will be based on suppliers disclosing their ESG performance data, setting targets, and taking action on shared sustainability goals.
Suppliers’ ESG data will be evaluated by the platform EcoVadis, with those demonstrating strong decarbonisation and other sustainability efforts rewarded with the most favorable financing terms.
Asda already asks its largest suppliers – those accountable for around 80% of its product carbon emissions – to share sustainability data through the EcoVadis assessment platform.
Michael Gleeson, Chief Financial Officer at Asda said, “As we continue to drive progress towards our own decarbonisation and ESG targets, supporting and engaging with suppliers forms a crucial step in this journey. Working with HSBC, we’re not only encouraging greater transparency over sustainability data in our supply chain, but we are able to use competitive financing to incentivise a significant number of suppliers to become more sustainable.”
Vivek Ramachandran, Global Head of GTS at HSBC said, “We’re pleased to continue our long-term partnership with Asda to support its sustainability ambitions. 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.”
Suppliers who opt out of the new scheme will remain on their existing payment terms and rates, with no disruption to their operations. The initiative is supported by multiple funding partners, including Rabobank.
