- Tesco and NatWest are offering financial help to farmers who want to switch to sustainable farming methods.
- About 1,500 Tesco farmers will benefit from the program, and they will also have access to Tesco's preferred suppliers and be offered discounts on things like solar panels and heat pumps.
Tesco, the UK's top supermarket, and NatWest, one of the UK's biggest banks for business and farming, have started a discount program for 1,500 of Tesco's farmers. The program gives them special rates on finance to help them switch to sustainable farming methods, including installing renewable energy sources like solar panels and wind turbines, and heating or cooling systems that don't use fossil fuels, like heat pumps.
The program, made with input from farmers, will allow farmers in Tesco's Sustainable Farming Groups for beef, lamb, and dairy to take part and access Tesco's preferred suppliers with potential discounts on renewable energy equipment.
Studies show that over 50% of Tesco farmers want to make changes but need help getting money to support their investment in more sustainable farming practices, which often need upfront money for equipment.
Through Lombard, the UK's biggest asset funder and part of NatWest, Tesco farmers will have access to good funding options and will benefit from Lombard's strong knowledge about assets and the farming sector to help them make their farms more eco-friendly. The new partnership covers solar panels, wind turbines, biomass boilers, LED lighting, battery storage, and power systems.
Tesco has created several Sustainable Farming Groups, like for milk, cheese, beef, and lamb. The first group was set up in 2007 to help dairy farmers during tough economic times.
The groups, led by suppliers, farmers, and Tesco workers, help make farms more efficient, improve environmental performance, and ensure good animal welfare. If the program is popular, it could be offered to more of Tesco's farmers in the future.
Ashwin Prasad, Tesco Group Chief Commercial Officer, said:
“We have long-term, trusted relationships with our farmers and suppliers and are proud supporters of British agriculture. 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 programs like this will play a crucial part in achieving this.
“The initiative will give our farmers the confidence to invest in sustainable farming methods and infrastructure, while also helping us reach our goal of being net zero across our supply chain by 2050.”
Today’s announcement is based on NatWest’s strong dedication to the UK agricultural sector. The bank has previously confirmed an extra £1.25 billion lending package for farmers, increasing its total lending capacity to the agricultural sector to £6.7 billion.
Dave Jones, the Chairman of Tesco’s Sustainable Dairy Group, stated that getting access to finance is the main challenge when trying to use green technology.
“As TSDG Chairman, it is wonderful to see many fellow dairy farmers considering more sustainable production methods like installing renewable energy technology on farm. However, getting financial support for major projects like this remains a challenge for many farmers.
“That’s why it is great to see Tesco and NatWest coming together to offer financial help that could assist us in installing the new technology we need, and reduce farm emissions in the process.”
Peter Huish, Head of Consumer Industries at NatWest Group, stated:
“At NatWest, we understand the various challenges faced today by farmers, including the cost of transitioning to lower emissions practices. This is why we are excited to be introducing Lombard’s partnership with Tesco and its farmers.
“This initiative further contributes to the UK’s climate goals and food security, as well as to NatWest’s pledge to provide £100 billion of climate and sustainable funding and financing by the end of 2025. 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.”
