UK retailer Asda has recently undergone its first external assessment of its ESG strategy by Sustainable Fitch, a financial services ratings agency. Here, Asda received an entity rating of three on a scale where one represents “excellent” and five denotes “poor’. The company also scored 54 as its entity score.
Sustainable Fitch also recognized Asda’s positive performance against existing ESG targets, particularly highlighting the 40% decarbonization of its operations since 2015 and its initiatives to make packaging recyclable.
It also views positively the depth and detail of Asda’s ESG reporting, which is aligned to industry best practice and ESG risk management processes. The disclosure of environmental metrics aligns with good market practice, and the trend in emissions shows sustained reduction across all scopes.
According to Asda, this is a testament to the company’s commitment to transparency and accountability in its ESG ratings.
“We know that the ESG credentials of businesses are increasingly important to investors and customers alike, and improving the transparency around how we are progressing our ESG targets is a key aim for the business,” said Micheal Gleeson, CFO.
“Two years into our new ownership, we are pleased to receive our first independent ESG rating from Sustainable Fitch, and to have achieved a score which shows that we are already in line with the largest retailers in our sector.
Asda: Identifying opportunities for improvement
Outside of its sustainability efforts, the report also identified Asda’s implementation of robust human and labor rights policies and a balanced workforce, which boasts 49% female representation. The company’s efforts in increasing the share of non-high fat, salt, and sugar own-brand products and enhancing food nutrition labeling are also recognized as positive contributions to responsible retailing.
The assessment by Sustainable Fitch also identified areas for improvement, which Asda welcomes and intends to address in its ongoing strategy development. One such area includes making disclosures on climate-related scenario analysis, which Asda plans to include in its forthcoming 2023 accounts.
“We look forward to the opportunity that our continued growth offers us to improve on this score and reassure all of Asda’s stakeholders about our commitment to responsible retailing,” said Gleeson.
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