Virgin Money launches £200m fund to help farmers achieve net-zero
The need to tackle climate change has become more urgent than ever, and the agricultural industry will play an important role in helping the UK achieve a net-zero economy. 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 that reduce on-farm emissions.
Currently, farming contributes approximately 10% of the country’s carbon emissions – but farmers have the opportunity to make use of their significant land resource to capture and store carbon over and above the sector’s level of emissions, which would help to enable the wider economy to reach net-zero. As a sector, agriculture has set an ambitious goal of reaching net-zero emissions in England and Wales by 2040.
Agriculture is one of Virgin Money’s biggest business sectors and it has supported the industry for several years. In a recent survey 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 change, with nearly a quarter of farming businesses saying they had been asked by their customers to provide evidence of their actions to reduce carbon emissions.
Virgin Money’s Agri E Fund is the first in the UK to offer support to farmers with the investment and carbon audits required to help them achieve their net-zero targets.
Farmers can access loans with 0% arrangement fees when they complete a carbon audit and borrow more than £50k to invest in emission-reducing initiatives such as renewable energy, energy efficiency initiatives or activities that reduce greenhouse gases.
According to Virgin Money’s survey, only 35% of farming businesses have completed a carbon audit - 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. By making the carbon audit a condition of the loan, Virgin Money is encouraging it’s customers to find opportunities 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.”