Asda says it must update SBTi-verified emissions targets due to growth

Pictured: Asda's superstore in Stevenage

The supermarket achieved validation from the Science-Based Targets Initiative (SBTi) for its long-term net-zero goal earlier this year. The goal is set for 2040 and, per the SBTi’s Net-Zero Standard for corporates, entails reducing absolute emissions across all scopes by at least 90%.

Asda has also set interim SBTi-verified targets for 2030, including specific aims to reduce greenhouse gases from forests, land and agriculture (FLAG) sources in the supply chain.

Now, in its latest annual ESG report, Asda has confirmed that it will not “progress” the 2040 goal with the SBTi as it stands.

This is due to the exponential growth in Asda’s convenience store footprint, from three ‘Asda Express’ locations at the start of 2023 to almost 500 at present. Asda has acquired most of these locations from EG Group and the Co-op.

Asda will work on new long-term emissions goals for the expanded group operations. It will need better data from its new Asda Express sites to do so. Asda will then make a resubmission to the SBTi.

The 2030 targets will not be affected. This is notable as 52% of Asda’s absolute emissions last year were generated upstream in product supply chains, mainly agriculture.

Asda’s ESG report states that the 2040 target update “does not slow action” to cut emissions from operations.

Decarbonisation projects underway at Asda include switching heavy goods vehicles (HGVs) from diesel to alternative fuels and improving store energy efficiency.

The SBTi is currently reviewing its Net-Zero Standard. More information is due later this month on how it intends to approach businesses unable to deliver the 90% reduction in absolute value chain emissions, like fast-growing firms or those with hard-to-decarbonise supply chains. Offsetting rules could be relaxed following consultations.

Transition plan in the works

Asda is notably planning to publish a net-zero transition plan in detail in 2025, the ESG report confirms. Transition plans go beyond target setting, outlining how targets will be delivered to key stakeholders including investors. ‘Gold Standard’ plans should cover facets such as business models changes, investment in equipment and innovation, and staff skills.

Another key component is measuring climate-related risks and opportunities. Asda already includes climate-related financial data in its ESG reports

The new Labour Government in the UK has pledged to mandate transition plans from all FTSE100 firms and large financial institutions. The previous Tory Government had implemented a ‘comply or explain’ approach with the FCA for large businesses in high-carbon sectors. It had established a Transition Plan Taskforce to develop a ‘Gold Standard’ for all firms, plus more detailed sector-specific guidance.

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