Asda launches sustainable supply chain finance scheme
Asda has partnered with HSBC UK to launch a sustainability-linked enhancement to its Supply Chain Finance scheme, effective from January 2025. The voluntary scheme aims to motivate suppliers to adopt better sustainability practices by offering financial incentives based on their Environmental, Social, and Governance (ESG) performance data. Over 250 suppliers currently using the existing scheme will have access to three tiers of enhanced financing rates. The performance of suppliers will be evaluated by the sustainability data platform EcoVadis, with those demonstrating strong ESG Key Performance Indicators (KPIs) and sharing their sustainability data receiving the most favorable financing terms. The focus of the scoring will be on decarbonization, but it will also consider other ESG aspects, such as social initiatives, to promote the integration of strong ESG practices throughout Asda s supply chain. This initiative builds on Asda s existing Supply Chain Finance program with HSBC UK, which has been in place for over a decade. Asda s largest suppliers, responsible for approximately 80% of its product carbon emissions, are already required to share sustainability data through the EcoVadis assessment platform. Michael Gleeson, Asda s chief financial officer, emphasized the importance of engaging with suppliers to drive progress towards the retailer s decarbonization and ESG targets. Vivek Ramachandran, global head of GTS at HSBC, expressed the bank s commitment to supporting Asda s sustainability ambitions through this financing solution. Suppliers who choose not to participate in the program will continue to receive payments on current terms, with no disruption to existing operations. The supply chain finance program will maintain its standard payment timeline of 14 working days. In summary, Asda and HSBC UK have introduced a sustainability-linked enhancement to their Supply Chain Finance scheme, incentivizing suppliers to improve their ESG performance and fostering transparency and better sustainability practices within Asda s global supply chain.
Source: retailtimes.co.ukPublished on 2024-09-26
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