Asda launches second sustainability-linked finance scheme with Lloyds

Asda has launched a new sustainability-linked supply chain finance scheme in partnership with Lloyds Bank, aimed at incentivising environmental and social improvements across its supplier base.

The scheme offers tiered access to preferential financing rates, with terms dependent on suppliers’ performance against a range of sustainability key performance indicators (KPIs). Suppliers that perform strongly and share their data will receive the most favourable rates.

Asda has appointed EcoVadis, a global sustainability ratings provider, to support the assessment and improvement of environmental, social and ethical performance across its supply chain. Data from EcoVadis will be used to determine supplier eligibility within the scheme.

This new scheme follows a similar programme launched in 2024 with another banking partner, marking Asda’s first sustainability-linked supply chain finance initiative. Both schemes aim to embed stronger sustainability practices throughout the business, with a particular focus on decarbonisation and social impact.

Asda’s chief financial officer Michael Gleeson 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, managing director 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 meet the criteria will be able to access the scheme from October. Those who do not participate will remain on their current payment terms, with no operational disruption.

Asda already requires its largest suppliers – responsible for around 80% of its product-related carbon emissions – to share sustainability data through EcoVadis.