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British farmers could benefit from corporate investment to support sustainable agriculture – so long as it is done correctly. The untapped opportunities afforded to... ESG investment is ‘opportunity for farmers’

British farmers could benefit from corporate investment to support sustainable agriculture – so long as it is done correctly.

The untapped opportunities afforded to farmers from environmental, social and governance (ESG) investment were discussed at a special event held at the Judge Business School in Cambridge.

Organised by the Lloyds Banking Group, the “Finance in the Field” debate saw experts from the finance, farming and research sectors discuss how sustainable finance can drive positive change in agriculture.

Lloyds eastern region ambassador Tom Martin said: “The major priorities ESG investors are concerned with are environmental issues linked to carbon emissions, biodiversity, and land/water management. This presents an opportunity for UK farmers.”

Bridging the gap

Mr Martin added: “ESG investment can often seem far removed from farmers’ day-to-day realities. Our role is to advocate for farmers in this transition and make ESG tangible from their perspective, not just in institutional terms.

“We want to bridge the gap, framing ESG not as taking land out of food production, but rather as enhancing productivity, food production, and profitability.”

Practical examples of ESG investment shared by Lloyds Banking Group included supporting the Soil Association Exchange (SAX) programme to help farmers transition to more sustainable systems.

The panel included Helen Avery, director of nature programmes at the Green Finance Institute; and Calum Murray, head of agriculture and food at Innovate UK, the government agency which funds investment in innovation.

New concept

The ESG market is relatively new for agriculture – and the concept is unregulated. The lack of clear and trustworthy information about options for farmers and big companies is also proving to be a barrier to investment.

Lloyds agriculture sustainability director Ben Makowiecki said: “For ESG investment to be practical, the approach needs to be tailored to suit different farm business models, this is where Lloyds is working to expand its support and lending options.

Investment options include our Clean Growth Financing Initiative, which offers fee-free lending for farm businesses to implement sustainable practices that reduce their environmental impact, explained Mr Makowiecki.

“This programme provides on-farm consultancy for 1,000 customers to help farmers access funding mechanisms for introducing sustainable practices, addressing six key areas including carbon, soil health and biodiversity.”

How communities can support local farmers

A rural insurance broker is calling on residents in the east of England to step up their support for local farmers.

Olivia Curl, of Lycetts, issued her appeal during Mental Health Awareness Week. “Farming is not just a business, it’s a way of life that demands resilience in the face of the myriad of evolving challenges,” she said.

“But even the most mentally resilient can struggle under the weight of financial and economic uncertainty. It’s important that residents support the local agricultural sector to help keep their rural communities alive.”

To generate extra income, more than two-thirds (69%) of eastern region farmers have diversified – starting public facing businesses ranging from farm shops, cafes and glamping sites to B&Bs, wedding venues and petting farms.

“Minor changes in shopping habits can make a big difference,” said Ms Curl. “From buying local farm produce to help ensure farmers have a steady income to patronising local restaurants that champion local fare.”

Residents could help support newly diversified farm ventures in other ways too – including by promoting them to friends, family, colleagues and on their social media channels, said Ms Curl.

“Every individual can contribute to this cause. Whether it’s choosing to buy local, spreading the word about rural enterprises or supporting mental health initiatives, your actions can make a profound difference.”