The "Green to the Core" report by government consumer watchdog Consumer Focus awarded an A,B,C, D or E rating to supermarkets as part of a study of how environmentally-friendly they are. This covers areas such as packaging, food sourcing and energy usage.
The report's authors found Asda's performance had fallen significantly since the last report in 2007 and handed the store a D rating.
The report claimed Asda had suffered due to its food sourcing - only a small proportion of its fish derived from sustainable sources. Additionally, only 59% of Asda’s fresh produce comes from the UK, a fall of 7% on 2007, while it has also cut its organic range by 39%.
In response, Asda has described the report as inaccurate and misleading stating it had cut carbon emissions to its stores by 20% since 2005 and had reduced packaging.
The Wal-Mart-owned chain also argued that sourcing certain products from the UK would require artificial environments to grow them in and would thus increase carbon emissions. It also said sourcing overseas helped developing countries.
Asda's poor performance came as both Sainsbury's and Marks & Spencer attained an A-rating, the first time the top rating had been awarded.
Waitrose, which has the highest proportion of home-grown produce, and Tesco, which had showed no progress since 2007, both retained there B and C ratings respectively.
The report's author also said there should be more money-off promotions on seasonal produce as well as recipes using the products to give people ideas.