Tesco partners with NatWest to support sustainable farmers

UK supermarket Tesco has announced a new partnership with NatWest that it claims will provide financial assistance for farmers that want to switch to sustainable farming methods.

The supermarket giant has said that “1,500 Tesco farmers [are] set to benefit from the voluntary scheme, as well as [gain] access to Tesco preferred suppliers, with potential volume discounts offered on assets such as solar panels and heat pumps”.

The scheme is voluntary and has reportedly been designed with farmers’ input. It will allow farmers who are part of Tesco’s Sustainable Farming Groups for beef, lamb and dairy to take part in the scheme, and help them to gain access to Tesco preferred suppliers, with potential volume discounts offered on renewable energy assets.

According to research conducted with Tesco Sustainable Farming Groups, “more than 50 percent of Tesco farmers want to make changes, but need help accessing finance to support them to make the investment”. In fact, Tesco has claimed that moving to more sustainable farming practices “often requires up-front investments in equipment which can create an obstacle”.

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Now, through Lombard, a UK based asset funder and part of NatWest, Tesco farmers will have access to funding solutions, and will be able to utilise Lombard’s asset and sector knowledge to aid them in decarbonising their farms.

Included in the available assets are cover solar panels, wind turbines, biomass boilers, LED lighting, battery storage as well as combined heat and power systems.

“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,” commented Ashwin Prasad, Tesco Group Chief Commercial Officer.

“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 initiative will provide our farmers with the confidence to invest in sustainable farming methods and infrastructure, while also helping us meet our target of reaching net zero across our supply chain by 2050,” continued Prasad.

So far, the retailer has launched several Sustainable Farming Groups including for milk, cheese, beef and lamb, with the first Group being launched back in 2007 to support dairy farmers during periods of economic uncertainty.

Guided by suppliers, farmers, and Tesco colleagues, these groups strive for enhanced efficiency, environmental sustainability (including carbon footprint reduction), and improved farm animal welfare. If successful, there’s potential to extend the scheme to more of Tesco’s farmers down the line.

Previously NatWest has supported Tesco’s farmers through an additional £1.25 billion lending package, which advanced its total lending capacity to the agricultural sector to £6.7 billion.

Also commenting on the scheme, Dave Jones, Chairman of Tesco’s Sustainable Dairy Group outlined the “biggest barrier when trying to install green technology”, sharing: “As TSDG Chairman, 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.”