Asda has announced the launch of a new sustainable supply chain finance scheme for UK suppliers.

The scheme, introduced in partnership with Lloyds Bank, is designed to use financial incentives to drive sustainability progress and performance within its supply chain.

Asda said it will provide access to preferential rates for numerous suppliers on a tiered basis which is dependent on sustainability performance against a range of KPIs.

It added that those performing strongly against their sustainability KPIs and sharing their sustainability data will be rewarded with the most preferential terms.

The supermarket chain has also appointed Ecovadis, the global sustainability ratings platform provider, to help it assess supplier environmental, social, and ethical performance across their value chains, with the data used as part of this scheme.

The launch follows a similar initiative with a different bank, which was its first sustainability-linked enhancement for its Supply Chain Finance scheme.

“Supporting our suppliers in making meaningful, sustainable changes is central to our wider ESG ambitions," said Michael Gleeson, chief financial officer, 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."

The move comes as Asda nears the completion of its troubled IT upgrade project six months after its initial deadline.

According to a report by The Sunday Telegraph earlier this month, the retailer has informed staff that it will separate its IT systems from former owner Walmart within weeks.

While Walmart had initially given Asda a deadline of February 2025 to complete what the supermarket previously described as Europe's biggest systems implementation programme, the project has been plagued with setbacks and delays.

Problems included a botched update that resulted in thousands of employees being paid incorrectly, and an incident last August when thousands of customers ordering from its George clothing range were left out of pocket ahead of the new school year.

The digital transformation plans, dubbed 'Project Future', involve the separation of more than 2,500 systems from Walmart.

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