Virgin Money has launched a new £200m fund to support farmers transition to net zero, by offering lower cost loans that can be used to invest in changes which reduce emissions.
According the bank, 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 net zero.
Loans are available with 0% arrangement fees when a farmer completes a carbon audit and is borrowing over £50,000 to invest in emission reducing initiatives.
These could include renewable energy, energy efficiency initiatives or activities that reduce greenhouse gases.
In a survey by Virgin Money of its farmer customers, 72% said they wanted to see specialist banking products tailored towards sustainability, and 82% said that reducing climate emissions was important to improving their sustainability.
It also revealed that the marketplace is helping to drive the pace of change, with almost a quarter (22%) of farms 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, just over one third (35%) of farming businesses have completed a carbon audit.
Brian Richardson, head of agriculture at Virgin Money said: "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 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 also partnered with Carbon Metrics, a consultancy which aims to help farms understand emissions management and auditing more easily.