Asda has received its first external assessment of its ESG strategy by the financial services ratings' agency Sustainable Fitch as part of the business’ ongoing commitment to transparently report on its efforts to achieve its ESG targets.
In the first rating of its kind for the business, Asda received an entity rating of 3 (1 = excellent, 5 = poor) which Sustainable Fitch notes reflects ‘Asda’s progressive effort to integrate ESG considerations into its business strategy’ and provides a solid foundation from which to progress. The business also received an entity score of 54.
An ESG rating is an external assessment of a company’s ESG performance, relative to competitors and the wider industry, and a way for investors and all other interested parties to easily understand a company’s ESG profile, risks, and opportunities.
Sustainable Fitch rates Asda positively on its performance against its existing ESG targets, particularly for the decarbonisation of its operations by 40% since 2015 and for the ongoing efforts to make packaging recyclable. It also views positively the depth and detail of the company’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.
Asda’s social profile is supported by the implementation of sound human and labour rights policies as well as a balanced workforce, with 49% of female representation. Additionally, its actions to increase the share of non high fat, salt and sugar own brand products and improve the food nutrition labelling have also been noted as positive steps taken by the retailer.
It also recognises that the assessment has uncovered opportunities to improve the score, including disclosures on topics not currently reported, which it welcomes and will take into account as its strategy continues to develop. For example, Asda will make disclosures on climate related scenario analysis in its forthcoming accounts for 2023.
Micheal Gleeson, chief financial officer, said: ‘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. 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. 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.’