Net Zero Carbon

Climate change is the defining challenge of our time, it’s happening much more quickly than previously anticipated and it’s impact on our business and suppliers will continue to grow. To grow sustainably, we need to:

• Reduce the impact of our operations and services.

• Reduce the impact of the goods we buy and sell.

• Support our customers to live healthier and lower impact lives.

Taking action in these areas, and monitoring and managing climate risks, helps us build a more resilient business for the long term.

Scope 1 & 2: We are committed to delivering net zero operations by 2040 and have a clear roadmap to get there.

Scope 3: We have developed a carbon transition plan, aligned with science-based targets, to support the delivery of net zero by 2050.

Delivering net zero across our value chain is much more challenging because we have less direct control, and it requires managing much more data. We have a range of programmes underway:

• Taking action to drive reductions in scope 3 emissions

• Improving the quality of accounting

• Collaborating with industry partners to resolve systemic challenges/barriers to delivering reductions

As these work programmes develop, our transition plans will continue to be refined and the data underpinning our reporting will improve and change.

In 2022, we committed to setting a science-based carbon reduction target across all scopes, including setting a specific Forests, Land and Agriculture (FLAG) target. While these targets were submitted and validated in 2024 we did not publish them on the SBTi website.

Our rapid growth into the convenience market means the targets we submitted no longer reflect the footprint of our business. We intend to resubmit new targets for validation once we have completed the integration of data from the acquisition of new sites that now form part of our Asda Express convenience format.

With 98% of our emissions from Scope 3, working collaboratively with suppliers and partners to drive climate action is imperative. Broadly, there are two critical areas for driving action: within supplier production processes and in the products we sell.

Working with our suppliers is key to reducing the impact of our supply base. We ask our suppliers to develop carbon inventories across all scopes and develop aligned reduction plans. But we also need to support progress, to track progress, and it is important we don’t tackle carbon in isolation.

In 2024 we announced a partnership with global sustainability rating company, EcoVadis to improve our visibility of ESG and carbon performance data in our supply base. Through this platform we are aggregating performance data from our largest suppliers, who are accountable for around 80% of supply chain footprint.  

The objective of the EcoVadis rating process is to assess the quality of a company’s sustainability management across four themes: Environment, Labour & Human Rights, Ethics and Sustainable Procurement. The submissions are audited to ensure credible and consistent data. Alongside assessment we request carbon metric and intensity data. Taken together we can quantify and track performance and identify priority areas to work together where needed.  

Many of our suppliers are already taking action and engaging with the platform:  

“We’ve completed EcoVadis assessments for a number of years. It helps us efficiently and succinctly share credible data on our ESG performance with customers and we see uptake from Asda as a strong step forward towards integrating management of supplier sustainability.” Camilla Riddiford, Head of Sustainability Arla Foods. 

Incentives can play an important role in encouraging and supporting action within our supply base. These can range simple conversations, to policy asks and contractual terms, to longer term partnerships & collaboration.

Agriculture is one of the largest areas of impact within our scope 3 footprint. We routinely meet with farmers as part of our farmer working groups to listen and support farmers with the challenges facing their sector as we understand the critical importance of their role. Within many agricultural supply chains, we have longer term partnerships which help support a range of programmes such as researching, trialling, and implementing activity to reduce impact and improve economic stability.

An example of this is our dairy supply chain, where we fund the ARLA customer sustainability programme which supports new research, testing and innovations for potential scaling within areas such as feed additives, herd genetics, biodiversity, fertiliser use etc.

We encourage suppliers to engage in participation with EcoVadis and deliver ambitious carbon reduction targets aligned with our ambitions through incentives like our Sustainable Supply Chain Finance programme developed with HSBC. This programme offers a range of tiered benefits on standard payment terms for suppliers who engage, commit and take action.  

We are proud signatories to the Courtauld Commitment 2030 which has a target to reduce the impact of food sector by 50% by 2030 from a 2015 baseline. This programme brings together organisations across the food industry to reduce the environmental impact of food and drink and helps navigate complex shared challenges.

We also proud to be supporting the IGD food system change leaders programme. This programme of work is collaborating to help understand and navigate barriers to delivering the net zero transition which might require support within public policy.