Asda's Sustainability & Social Responsibility: Achievements, Goals, Initiatives, Lecture notes of History

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May 2021

Asda Creating

Change for Better

Executive Summary of Full ESG Report

Message from our CEO

At Asda, we have always been proud to be more than just a retailer and to take an active role in the communities we serve, but 2020 and the onset of the Covid-19 pandemic brought that role into the spotlight more than ever before. Alongside other essential workers, we’ve been at the frontline of feeding the nation, operating our stores and home delivery services in the most challenging of circumstances.

Throughout this time, our first priority has been keeping our customers and colleagues safe, but we’ve also played our part in helping wider society. We’ve enabled vulnerable colleagues to stay at home on full pay while recruiting 23,000 temporary team members, supporting local economies. And we’ve worked shoulder to shoulder with our suppliers to give them the certainty they’ve needed

• with clear communication and faster payment terms. Within our communities, we’ve worked closely with our charity partners the Trussell Trust and FareShare to set up e-referral systems for food banks to ensure that surplus food was redistributed to those in need. In January 2021 we partnered with the NHS to establish the first supermarket-based Covid- vaccine centres in our Cape Hill and Watford stores. These are just a few examples of how our amazing colleagues have risen to meet unprecedented challenges, and I’m incredibly proud to say that you will find many more in this, our first ever Asda ESG report.

Whilst this past year has been exceptional, we have not lost sight of our wider environmental, social and governance (ESG) responsibilities – because, even with a thousand plates spinning, doing the right thing is baked into who we are. Through this report, we will share with you how we’re progressing on the key ESG issues that matter to our business and to you, our stakeholders, and where we stand to make the greatest difference.

As we move forward through 2021 and beyond, I am heartened by the resilience we have shown in our response to the pandemic. I would like to thank our colleagues for pulling together and delivering for our customers. Whilst I look forward to putting Covid-19 behind us, I am grateful for the opportunity it has afforded us to show ourselves at our best, and for our colleagues to be recognised in society for the important work they do every day to feed the nation. I also look to the future with even greater confidence that we can adapt to our stakeholders needs, and make greener, healthier and other responsible choices more affordable and accessible to all. As we move forward on our ESG journey, we’ll continue to be transparent about our progress, as we work with our colleagues and partners to create positive change.

I hope you enjoy reading our first ESG report and look forward to hearing your feedback.

“AT ASDA, WE’VE

ALWAYS PUT OUR

CUSTOMERS’

NEEDS FIRST.”

Roger Burnley, Chief Executive Officer, Asda

We are proud of our achievements in providing great customer value whilst driving positive change to tackle climate change, eliminate waste, and protect and restore nature – see some of our key highlights below:

Amount of carbon saved by

suppliers leveraged through

The Asda Sustain and Save

Exchange platform: over

72,000 tonnes^1

98%

Number of all Asda superstores and supermarkets with the ability to donate surplus edible food to charities and food banks.

Percentage of cotton sourced through sustainable schemes

60%

3

Increase in food redistribution

between 2018 and 2019

98%

increase

9,300 4 tonnes^5

since 2018: over

Weight of plastic removed from our own brand packaging

Zero operational waste is sent to landfill

of our timber, paper

and pulp products are

sustainably sourced.^2

Carbon footprint reduction in

2019 compared with 2007

44%

absolute

reduction

ASDA

581

Carbon Nature Waste Value

Eliminating carbon emissions Sourcing and farming

which respects and restores

Elimination of food, product and

packaging waste

Greener choices which save

our customers money

An end-to-end net zero carbon emissions business

A regenerative impact on nature, all food sustainably produced

A zero waste world, where nothing goes in the bin

Carbon-neutral baskets which save our customers money

To achieve our ambitions, we need a clear roadmap with both short-term (2025) and longer-term (2040) goals. Building on our progress, we now intend to accelerate our efforts for greater impact. And we’ll keep you informed of our performance, achievements and challenges along the way.

Our 2040 Vision

Our 2025 goals

COMMITMENT 1

• 50% lower direct GHG emissions

COMMITMENT 2

• Develop measurement of non-direct scope 3 emissions

COMMITMENT 3

• Top 20 commodities sustainably sourced

COMMITMENT 4

• Develop Natural Resource Stewardship programme

COMMITMENT 5

• Zero waste operations*

COMMITMENT 6

• Reduce food waste by 20%

COMMITMENT 7

• Reduce packaging and drive 100% recyclability of what remains

COMMITMENT 8

• Enable Asda customers to shop more sustainably

COMMITMENT 9

• Rapid expansion of cheaper, greener alternatives

• Asda’s definition of zero waste is 90% diversion for landfill and incineration (including energy recovery) or 90% of operational waste reused, redistributed or recycled. I 1. Data is collected by a third party (www.manufacture2030.com) via two methods; directly from suppliers or indirectly through surveys. I 2. Based on extrapolated supplier survey results received relating to the 2020 calendar year. I 3. George estimated total cotton lint footprint submitted to BCI as part of a Walmart global membership umbrella. I 4. That’s food donated to charity, given away to customers and colleagues, commercial redistribution and used for animal feed. I 5. Currently only plastic removal is tracked, with reduction calculated using the previous 12 month sales volume.

Better Planet

Greener At Asda Price: Sustainable choices that save our customers money,

cut our costs and protect our planet.

We’re proud to support thousands of charities and good causes of all sizes across the UK, through fundraising, donations and volunteering. We’re particularly focused on fighting poverty, supporting children in crisis and breast cancer research and support, whilst supporting our local communities during times of crisis and helping them to build long-term resilience.

Grants committed by

Total value of^ Asda Foundation in 2020

community

contributions:

Beneficiaries from Asda’s community contributions

2

£28.5m 1m

£4.5m

£25 million

We’ve donated over

to FareShare and the Trussell Trust since 2018

111.7 million

meals^1 enabled through

financial or in-kind donations

to charity since 2013

250, pieces of equipment provided to Care Home staff during the Covid-19 pandemic

£71m raised for Breast Cancer Charites to date through

Asda Tickled Pink

£26m

raised for BBC Children in Need over the past 21 years

Local Communities

We’re donating to and working with

charities, community groups and local

good causes to support projects that

make our communities a better place

to live.

Fighting Poverty

We’re working in partnership with

FareShare and the Trussell Trust to

create long-term, positive change

Disadvantaged Children

Through our fundraising partnership

with BBC Children in Need,

we provide children and their

families living in crisis with essential

everyday items

Breast Cancer

We work in partnership with leading

charities Breast Cancer Now and

Coppafeel! to fundraise for breast

cancer research and care provision,

whilst delivering behavioural

change campaigns

Over £1million of goods donated by

Asda in 2020 and over £4.5 million

paid out in grants by the Asda

Foundation to thousands of local

charities across the UK

Over £25million donated to our

Fight Hunger Charity Partners since

2018, ultimately enabling over 111

million meals to be provided to

vulnerable people across the UK

Over £26million fundraised over the

past 21 years, supporting tens of

thousands of young people across

the UK

Over £70million fundraised over

the past 25 years, enabling over

500,000 hours of research and

funding in every 5 calls to the Breast

Cancer Now helplin e

1. A meal can be defined as 420g of food, definition from WRAP https://wrap.org.uk/sites/default/files/2020-11/Food-surplus-and-waste-in-the-UK-key-facts-Jan-2020.pdf. I 2. People reached through Asda funded national charity partnership activity, people benefitting from a donation of goods, space and/or time at our stores and people supported by an Asda Foundation grant

Better Communities

Our Community Strategy is focused across 4 key areas and delivered in partnership

with local and national charities

We can only deliver our Creating Change for Better vision if our colleagues feel safe and respected and by upholding the highest standards of honest, ethical conduct across our stores and sourcing operations. Here are some of our key achievements:

We source from 300 local suppliers providing more than 2,000 product lines

Asda supports the Bright Future Programme for survivors of modern slavery,

Over 1,000 colleagues took part in corporately supported Pride events across the UK in 2019

Asda ranking for overall compliance with the Groceries Supplier Code of Practice (GSCOP): 3rd out Asda’s median hourly gender pay gap: of 13 designated retailers.

5.5%

Number of workers in Bangladesh provided with initial basic safety training:

1,596,

Percentage of colleagues responding positively to ‘I am proud to work at Asda’:

77%

3

rd

in our ‘Your Voice’ survey

16,

colleagues

supported to shield at home through the Covid-19 pandemic

alongside 28 charities and another 20 businesses.

Our People strategy is focused on building a business that’s diverse and inclusive, and

creating a safe and supportive environment where colleagues can be themselves and

reach their full potential.

ANTI-CORRUPTION

ANTI-TRUST

CONSUMER PROTECTION

ENVIRONMENTAL

ANTI-MONEY LAUNDERING AND FINANCIAL SERVICES

FOOD SAFETY

HEALTH AND SAFETY

HEALTH AND WELLNESS (OPTICAL AND PHARMACY)

LABOUR AND EMPLOYMENT

LICENCES AND PERMITS

PRIVACY

PRODUCT SAFETY

RESPONSIBLE SOURCING

TRADE

Our comprehensive Ethics and Compliance programme is ensuring we promote a culture

where people do the right thing as a matter of course, including working with our supply

chains to bring about positive change by sourcing responsibly, promoting human rights and

preventing modern slavery

Diversity & Inclusion

We’re building on our

diversity accreditations

(such as Inclusive Employers

Bronze status and being a

Level 2 Disability Confident

Employer) and are working

to increase the number of

female store managers

Health & Wellbeing

We’re continuing to expand

the resources we offer to

colleagues to support their

mental, emotional, physical

and financial wellbeing,

including manager upskilling

Learning &

Development

We’re investing in a wide

variety of opportunities

to help our colleagues

to progress and shape

their careers, including

personalised learning

schedules and virtual-reality

customer service training

Better Business

Our People Strategy Ethics, Compliance and Responsible Sourcing

ESG Area Target Deadline

Our Carbon 2040 Vision: An end to end net-zero carbon emissions business

50% lower direct GHG emissions (Scope 1 & 2), vs a 2015 baseline 2025 Develop measurement of non-direct scope 3 emissions, then set targets to 2025 2025 Our Nature 2040 Vision: A regenerative impact on nature, all food sustainably produced

Our top 20 commodities sustainably sourced 2025

Develop a natural resource stewardship programme 2025

Our Waste 2040 Vision: A zero-waste world, where nothing goes in the bin

Zero-waste operations 2025

Reduce food waste by 20%, vs a 2015 baseline 2025

Reduce packaging and drive 100% recyclability of what remains 2025

Our Value 2040 Vision: Carbon-neutral baskets which save our customers money

Enable Asda customers to shop more sustainably 2025

Rapid expansion of cheaper, greener alternatives 2025

George Sustainability Strategy

Responsibly Sourced Fibres

100% of our cotton for own-brand clothing and soft home textile products will be responsibly sourced 2025 We are committed to sourcing viscose from traceable sources with a low environmental impact 2025 We are committed to sourcing 100% polyester with a minimum of 30% recycled content 2025

Hazardous Waste

We aim to eliminate all hazardous waste being released into the soil, water and air 2025

We will actively participate in the Microfibre Consortium to reduce ocean plastics Ongoing

We aim for all mills to be reporting through Higg index 2022

Packaging

5 0% of hangers will be reused or recycled 2025

30% recycled content in all garment polybags 2025

All George packaging will be 100% recyclable 2025

All primary paper-based packaging from sustainable sources 2025

Our ESG Committments

ESG Area Target Deadline

Supporting Local Communities

Stores to use donations of time, goods and space to support local communities Ongoing Community Champions to allocate grants to community groups (with funding provided by the Asda Foundation) Ongoing

Fighting poverty

Ensure all stores have the ability to donate food by end 2020 (now achieved) 2021 Across 2018-2021 we will donate £20m through our Fight Hunger Create Change partnership to help tackle poverty in the UK

2021

We aim to enable our charity partners to provide an additional 24m meals every year by 2021 2021

Helping disadvantaged children

Building on our 20-year BBC Children in Need partnership, we will support the charity’s efforts to deliver emergency essentials to children and their families in the wake of crisis

Ongoing

Partnering with breast cancer charities to help prevent breast cancer

We will fundraise to help research into a cure and treatments for breast cancer Ongoing We will fundraise to enable provision of breast cancer care and support services Ongoing We will raise awareness and provide better information to help en- courage a culture of self-checking and support prevention efforts Ongoing

PAGE(S) PAGE(S)

1-15 Introduction Chapter 81-82 Health communications

3-4 Full message from our CEO^ 83 Health innovation

5-7 Facts about Asda and our history 84 Value – helping customers to choose healthier options

8-10 ESG prioritisation and trends driving our approach^ 85-86 Healthcare (optical and pharmacy)

11-13 Asda Creating Change for Better and George sustainability strategies^ 87-112 Better Business Chapter

14-15 Our response to Covid-19^ 88 Recent key achievements

16-52 Better Planet Chapter 89 People strategy

18-19 Overarching sustainability strategy 90-94 Diversity and inclusion

17, 20 History of action on sustainability and recent key achievements^ 95 Health and wellbeing

21-22 Carbon footprint^ 96-97 Colleague engagement

23-24 Carbon reduction^ 98 Learning and development

25-27 Nature – sustainably sourced commodities^ 99 Ethics and compliance Strategy

28-29 Nature – resource stewardship (water and oceans, seafood) 100 History of action on human rights

30 Animal welfare^ 101-102 Responsible sourcing and modern slavery

32 Operational waste^ 103-104 George sourcing

33-34 Food waste and redistribution^ 105 Supplier support

35-38 Plastic and packaging waste^ 106 British sourcing

39-40 Middleton sustainability store 107-110 Safety (health and safety, food safety, product safety, data privacy)

41-43 Value - helping customers to shop more sustainably^ 111-112 Ethics and compliance

44-52 General merchandise and George clothing sustainability^ 114-124 Appendix

53-73 Better Communities Chapter 115 Impacts across our value chain

54-55 History of action on community and recent key achievements^ 116 Alignment with the UN sustainable development goals

56-57 Overarching community vision and total 2019 contribution 117-122 Future-facing Asda ESG commitments

58-61 Local community support (community champions, Asda Foundation)^ 123-124 ESG Governance

63-68 Fighting Poverty

69-71 Funding Breast Cancer Research and Support

72-73 Supporting Disadvantaged Children

74-86 Better Lives Chapter

75-77 History of action on health and recent key achievements

78 Vision for health

79-80 Reformulation

Contents Index for the Full Report