Sustainability 2.0Asda’s Environmental Sustainability Targets 2010-2015

Our Public Commitments

Since 2005 we’ve made great strides in reducing our own operational carbon impacts and in fact have reduced our carbon footprint by 11.9% between 2007-2011.

•The Sustainability 2.0 strategy is intended to continue the transformational plan to reduce our operational impacts but crucially accelerate progress reducing the impacts of our supply chain

•Sustainability 2.0 will kick-start this focus on supply chain and products through Sustainable Agriculture, the Sustainable Products Index & the 20m tonnes GHG Reduction Plan

•The key mantra is to reinvest savings or re-engineer products to be more environmentally preferable while making ‘sustainability affordable for all’

CorporateBe the customer champion offering affordable and sustainable products. Champion a common sense approach to carbon reduction whilst helping our customers to reduce their costs and carbon emissionsand so costs.

Overview of strategy

Objective

Return on investment decisions include cost of carbon consideration

Continue reducing our carbon footprint in absolute terms YOY

Stores, depots and supply chain to be resilient to adverse weather patterns from climate change

Target (2005-end 2015)

In effect from Jan 2011

Maintain 10% reduction (absolute) Significant project underway with PwC covering all fresh food supply chain.

Every building has a mitigation plan by end 2015 and 5 product categories by end 2012

11.9% absolute reduction.

Asda is the customer voice on healthy, affordable and sustainable products

From 2011 measured as rise in perception from key stakeholders and customer panels

Consulted our Everyday Experts. Working with the BRC, WWF and BNF.

Achieved by end 2011

In place. Shadow cost to be kept under review.

*absolute reductions, which means that even though we’re growing as a business, the total amount of carbon we produce has gone down since 2005

Products

1. Exp nd exi ting initiatives inc F rm Li ks & e uc tion s hemes by e d 2 15

2015

*absolute reductions, which means that even though we’re growing as a business, the total amount of carbon we produce has gone down since 2005

Objective

Stewardship of Natural Resources - WaterReduce the water in our products to mitigate resource restrictions and costs

Target (2005-end 2015)

Set absolute target in 2011

Achieved by end 2011

Working with Walmart to develop a global reduction target.

Stewardship of Natural Resources - CarbonSupport WMT project to eliminate 20 million metric tonnes of embedded carbon

Global target (absolute) Active member of Walmart project team, particularly on deforestation and livestock.

Support WRAP to deliver sectoral target to reduce carbon impact of packaging (Courtauld 2, Target 1) & continue to develop innovative packaging solutions for Asda products

10% reduction by 2013 (sectoral & absolute)

On target; numbers reported through WRAP.

Continue to reduce the environmental impact of our packagingts

Sustainable Packaging Analysis & Modelling Tool rolled out in 2011

Decision taken not to roll out and plans aligned to WRAP.

Factories making Asda brand domestic goods have energy, waste and water reduction plans

Domestic factories 100% by 2013; imports 100% by 2016

Sustain and Save pilot launched with 2 degrees at start of 2012.

Manage product environmental performance through Sustainable Products Index

20 suppliers with intermediate Index by 2011 & 100% on full Index by 2016

Decision taken not to roll out as projects with The Sustainability Consortium and Product Research Forum have overtaken it.

Stewardship of Natural Resources - Products

Goal 1: Demonstrate use of legal timber and wood pulp in products, packaging and GNFR

Goal 2: Have a positive impact on soil structures supporting our agriculture production

Goal 3: Support R8 group on ecosystems based fisheries management

100% evidenced legal timber by 2013 (absolute)

Deliver practical support to our farmers

To be confirmed

Adopted new Corporate Timber Procurement policy and briefed to suppliers.

Published Simply Sustainable Soils guide in partnership with LEAF.

Reviewing best way to deliver objective with target to be set after review.

*absolute reductions, which means that even though we’re growing as a business, the total amount of carbon we produce has gone down since 2005

*absolute reductions, which means that even though we’re growing as a business, the total amount of carbon we produce has gone down since 2005

Products Objective

Sustainable AgricultureGoal 1: Support farmers & their communities

Target (2005-end 2015)

1.1 Increase products sourced from local suppliers

1.2 Expand existing initiatives inc Farm Links & education schemes

1.3 Improve health & livelihood of women in agricultural communities

Achieved by end 2011

6000 products, from 600 suppliers

Dairy Bus visited 165 schools and 25,000 children. Major sponsor for Open Farm Sunday, 10,000 people have visited farms as a result.

Baselines for African sourced products are being established for women’s contribution and financial benefit.Asda has financially supported two female agricultural PhDs.

Goal 2: Produce more food with less waste & fewer resources

2.1 Reduce fresh food waste & utilise unavoidable waste using sustainable methods by 10% farm to fork

2.2 Invest £99m in perishable supply chain (absolute)

2.3 Deliver program disseminating R&D for beef, pork, lamb, dairy, produce, poultry

Depot to customer numbers reported through WRAP under Courtauld 2. Work underway to establish farm to depot workplan.

Invested £21.6million in 2011

BeefLink, LambLink, DairyLink and PorkLink all launched with leading famers. Trialling new schemes and learnings being fed back into with the rest of the supply base

Goal 3: Sustainably source key agricultural products

3.1 Only use sustainable palm oil in products (oil by end 2014; kernel by end 2015 (absolute)

3.2 Develop sustainable beef programme with clear targets

3.3 Sell only sustainable fish (absolute)

3.4 All of our tuna will come from pole & line or FAD-free sources (Fish Aggregating Devices) by the end of 2014

All of the 16,000 tonnes of palm oil and palm kernel oil used in Asda supports the RSPO scheme.20% is segregated, 80% Green Palm.

Active partner in Walmart Amazon beef project in 2011. Project ongoing in 2012 alongside Asda’s own plans in the UK.

Formally engaged with Sustainable Fish Partnership to review fish stocks at the point they’re landed, and to develop fisheries improvement projects as required.

New target. Worked with Greenpeace and our supplier to develop plans to deliver

Property & Energy

Transport

*absolute reductions, which means that even though we’re growing as a business, the total amount of carbon we produce has gone down since 2005

Objective

Reduce carbon emissions from existing stores, depots and offices

New store model to be more carbon efficient

New depot model to be more carbon efficient

Reduce the negative environmental impact from our refrigeration

Reduce water usage in our buildings

Reduce water usage on construction sites

Target (2005-end 2015)

35% absolute

60% (absolute)

30% (absolute)

8% leakage rate (absolute)

30% (absolute)

Set absolute target in 2011

Achieved by end 2011

28.7% (absolute)

42% (absolute)

11.7%

7.1% leakage rate

5%

Target not yet set due to difficulty in assessing baseline

Objective

Reduce emissions from transportoperations

Target (2005-end 2015)

60% (intensity target vs cases delivered)

Achieved by end 2011

42% (intensity vs cases delivered)

Waste

*absolute reductions, which means that even though we’re growing as a business, the total amount of carbon we produce has gone down since 2005

Objective

All construction waste (defined under site waste management plans) diverted from landfill

Support WRAP to deliver sectoral target to reduce UK household food and drink wastes (Courtauld 2, target 2)

Support WRAP to deliver sectoral target to reduce grocery product and packaging waste in supply chain (Courtauld 2, target 3)

Support the WMT global goal to reduce carrier bag usage by 33% by 2013

Target (2005-end 2015)

100% (absolute) by 2012

4% by 2013 (sectoral)

5% by 2013 (sectoral)

WMT global target (absolute)

Achieved by end 2011

96% (absolute)

Numbers reported through WRAP.

Numbers reported through WRAP.

Reported through Walmart