Virgin Money has launched a new £200m fund to support farmers in their transition to net zero, by offering lower cost loans that can be used to invest in changes which reduce on-farm emissions.
The Agri E Fund is the first fund offered in the UK dedicated to supporting farmers with the investment and carbon audits required to help them achieve their net zero target.
Loans are available with 0% arrangement fees when a farmer completes a carbon audit and is borrowing over £50k to invest in emission reducing initiatives, like renewable energy, energy efficiency initiatives or activities that reduce greenhouse gases.
The agriculture sector has a key part to play in the UK’s transition to a net zero economy. While farming contributes approximately ten per cent of the UK’s carbon emissions, the significant land resource within agriculture provides the opportunity to capture and store carbon over and above the sector’s level of emissions, helping to enable the wider economy to transition to net zero. The sector has set itself the ambitious goal of reaching net zero greenhouse gas emissions across the sector in England and Wales by 20401.
Agriculture is one of Virgin Money’s biggest business sectors which it has supported over many years. In a recent survey2 of its agricultural customers, 72% of respondents said they wanted to see specialist banking products tailored towards sustainability, and 82% said that reducing climate emissions was important to improving their sustainability. The survey also revealed that the marketplace is helping to drive the pace of change, with almost a quarter (22%) of farming businesses saying they had been asked by their own customers to provide evidence of their actions to reduce carbon emissions.
The Agri E Fund also encourages the uptake of carbon audits, which are becoming increasingly important in the agriculture supply chain, by making the completion of one a condition of the loan. A carbon audit produces a comprehensive report on a farm’s carbon outputs, highlighting inefficiencies on the farm and ways to do things differently, both to lower costs and reduce carbon emissions. According to the bank’s survey, only 35% of farming businesses have completed a carbon audit, and Virgin Money has been encouraging customers to undertake a carbon audit so they can start to move towards net zero at an early stage.
Brian Richardson, Head of Agriculture at Virgin Money said: “Farmers need to be proactive in adjusting their businesses to a low carbon future. While many farmers are working towards their net zero targets, we know from our research that there are many who know what they’ve got to do, they just aren’t sure how to go about it. By providing lower cost finance, our new Agri E Fund is providing targeted support to help agri-businesses make the transition and enable investment in reducing and capturing carbon emissions.
“We have a long history of supporting the agriculture sector through periods of change and are committed to working closely with our farming customers to help them on their journey to net zero.”
Virgin Money has partnered with Carbon Metrics, a consultancy which aims to help rural businesses understand emissions management and auditing more easily, to produce an Agriculture Net Zero Report. This guide is a tool to help farmers understand the background to climate change specifically relating to agriculture, what it means for the industry and how they can start to adapt their businesses to meet the challenge and plan their own business journey towards net zero.