Tesco and NatWest have launched a ‘green finance’ scheme to support the retailer’s farmers switch to renewable energy.
The discounted climate and sustainable – or green finance – scheme is offered to 1,500 of Tesco’s farmers, providing them with preferential rates on finance to help them move to renewable energy sources. The money can be used for installing solar panels and wind turbines, or fossil fuel-free heating or cooling systems, such as heat pumps.
Farmers who are part of Tesco’s ‘Sustainable Farming Groups’ for beef, lamb, and dairy are able to take part in the scheme, and gain access to Tesco preferred suppliers, with potential volume discounts offered on renewable energy assets.
Tesco said there is demand from its farmers to introduce more sustainable farming methods, but they need financial support because the move to renewables often involves prohibitive up-front costs.
Now, via Lombard, an asset funder which is part of NatWest, Tesco farmers will have access to green finance. The full list of assets included through the new partnership cover solar panels, wind turbines, biomass boilers, LED lighting, battery storage and combined heat and power systems.
Tesco’s Sustainable Farming Groups are led by the retailer’s suppliers, farmers and Tesco staff – and they aim to drive improvements in efficiency, environmental performance (including carbon foot-printing), and farm animal welfare.
Should the green finance scheme prove popular, Tesco said there is potential for it to be made available to more of Tesco’s farmers in the future.
Ashwin Prasad, Tesco Group chief commercial officer, 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.”
Dave Jones, the chairman of Tesco’s Sustainable Dairy Group, commented: “It’s great to see so many fellow dairy farmers considering more sustainable production methods like installing renewable energy technology on farm.
“However, accessing financial support for significant projects like this remains a barrier for many farmers. That’s why it’s great to see Tesco and NatWest joining forces to offer financial assistance that could help us install the new technology we need, and reduce farm emissions in the process.”
Peter Huish, head of consumer industries at NatWest Group, added: “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.”
The UK’s supermarket chains are taking action in supporting farmers become more sustainable. Last month, Morrisons announced the launch of its Sustainable Farm Network which aims to help farmers in the grocery supply chain accelerate towards net zero farming.
Meanwhile, Co-op said in January it would financially reward sustainable farming practices in its beef supply chain via a new scheme set up in partnership with supplier, Dunbia.
[Image credit: Tesco]
