Tesco and NatWest launch discounted sustainable finance scheme for farmers

The scheme will be facilitated by Lombard, the UK's largest asset funder and a division of NatWest.

The collaborative project aims to support 1,500 farmers associated with Tesco to adopt sustainable farming practices by facilitating access to targeted finance.

Farmers will be supported to adopt solar panels, wind turbines, biomass boilers, LED lighting, battery storage and combined heat and power systems.

The voluntary programme, which has been developed in collaboration with input from farmers, specifically extends to participants in Tesco’s Sustainable Farming Groups focusing on beef, lamb and dairy production.

Research conducted by the retailer has found that more than 50% of its farmers want to implement changes to decrease the environmental footprint of their businesses, but face challenges in accessing financial support for necessary investments.

Transitioning to sustainable farming practices often necessitates upfront investments in equipment, presenting a barrier to adoption.

Tesco Group’s chief commercial officer Ashwin Prasad said: “We know a lot of our farmers are looking at ways to reduce costs on farm and move to renewable sources of energy at the same time, which is why we’re delighted to be partnering with NatWest in offering our green finance initiative.

“The food industry has a clear role to play in ensuring we maintain food security while also helping to protect the environment, and we hope innovative programmes like this will play a crucial part in achieving this.”

The scheme will be facilitated by Lombard, the UK’s largest asset funder and a division of NatWest.

The farmers will also be able to use Lombard’s asset knowledge and sector expertise to support the transition towards decarbonising their farms.

NatWest Group’s head of consumer industries Peter Huish said: “At NatWest, we recognise the multiple challenges faced today by farmers, including the cost of transitioning to lower emissions practices.

“We strongly believe that to deliver a more sustainable future, partnering with leading UK consumer companies such as Tesco, and their supply chains, will be critical.”

In 2022, the banking giant launched a £1.25bn lending package for farmers, taking its total lending capacity to the agricultural sector to £6.7bn. NatWest Group has pledged to provide £100bn of climate and sustainable funding and financing by the end of 2025.

The lack of funding is a challenge experienced by farmers across the nation, beyond Tesco’s network. The Landworkers Alliance, representing thousands of farmers and foresters across the UK, has this week launched a campaign urging the UK Government to double its agriculture budget.