Lloyds Banking Group and Wildfarmed have launched the Food & Nature Resilience Fund, a new mechanism intended to accelerate the transition of the UK’s three million hectares of arable farmland towards regenerative agriculture.
The fund is designed to pool investment from banks, utility companies, insurers, and other businesses across food and non-food value chains. It will reward farmers for verified improvements in biodiversity, soil health, water quality, and carbon, while keeping land in food production.
Severn Trent, Affinity Water, and AXA XL are among the first organisations committed to the initiative, with further partners expected to follow. The fund is intended to address financial barriers to regenerative practices, which the partners say are cited by 92% of farmers as the main obstacle to change.
Wildfarmed and Lloyds said the model is built around the principle that nature recovery and food production should advance together rather than compete for land use. Unlike some nature finance schemes, the fund is intended to support regenerative practices on productive farmland, allowing farmers to deliver environmental gains without moving land out of agricultural use.
The partners said the fund arrives as the Green Finance Institute, working with input from Defra and HM Treasury, has estimated that ecosystem decline could reduce GDP by 12% over the next decade if nature degradation is not addressed.
Ben Makowiecki, agriculture sustainability director at Lloyds Banking Group, said: “As the UK’s largest agricultural lender, we have a responsibility to support farmers during this transition. By bringing together businesses with a stake in resilient farming, healthy soils, clean water and thriving natural ecosystems, this fund can help set in motion the pace of change needed to scale regenerative agriculture across the UK while creating a more reliable financial model for farmers.
“This partnership builds on our broader support for farmers through our Agricultural Transition Finance proposition, which rewards the adoption of regenerative practices, as well as our established partnership with Soil Association Exchange, with Exchange Market focused on removing carbon from the food supply chain, and the Routes to Regen initiative.”
Wildfarmed said its own research partnerships are used to analyse in-field data and demonstrate outcomes across soil health, biodiversity, water pollution, and carbon. Farming.co.uk reported that University of Bristol research recorded a 79% increase in insect biomass compared with conventionally farmed land, while NIAB found 15 Red List bird species within Wildfarmed fields. A recent survey found 91% of Wildfarmed growers reported a positive impact on wellbeing and job satisfaction.
Andy Cato, co-founder of Wildfarmed, said: “Historically, our food system has priced nature at zero. The consequences of this are everywhere, from food price inflation to the fragility of the ecosystems on which we all depend.”
He added: “Nature and food production are too often seen in opposition, with payment schemes forcing farmers to choose one or the other. Yet a resilient, abundant future depends on nature-rich food-producing land. For many years, it has been an ambition for farmers to be rewarded for delivering nature and resilience whilst growing food, not instead of it. This partnership is a big step forward in making this a reality at scale.”
The fund places nature inside productive agricultural economics rather than treating it as an offset, disclosure line, or philanthropic commitment. By linking payments to measurable improvements in soil, water, biodiversity, and carbon, the model attempts to turn environmental recovery into a revenue stream for farms rather than an uncompensated obligation.
UK farming is already being reshaped by subsidy changes, input costs, weather volatility, trade pressure, and uncertainty around environmental land management. The reopening of Sustainable Farming Incentive funding has given farmers another route into transition support, while trade pressures are deepening farming supply risk across the sector. Private finance will not replace public support, but it can help address the gap where environmental improvements carry upfront cost and delayed financial return.
The involvement of water companies and insurers shows how nature risk extends beyond food supply chains. Water companies have an interest in reducing pollution, improving catchments, and managing treatment costs. Insurers have exposure to flood risk, drought, asset damage, and business interruption. Banks have credit exposure to farms and rural enterprises. Food companies carry supply chain and Scope 3 emissions exposure.
Bringing those interests together could create a broader financial base for regenerative transition, especially where individual farms cannot capture the full economic value of improved soil, cleaner water, lower pollution, and more resilient ecosystems. A catchment that reduces water treatment costs, a soil system that retains more moisture, or a landscape that supports biodiversity can produce benefits across several sectors, not only on the farm that carries out the intervention.
Verification will determine credibility. Nature finance models can lose trust if outcomes are vague, double-counted, or weakly measured. Farmers, investors, and buyers will need clear data on baselines, interventions, results, payments, and ownership of environmental claims. The use of in-field data and research partners gives the fund a starting point, but scaling across millions of hectares will require consistent measurement and practical systems that farms can use without excessive administrative burden.
Commercial viability is equally important. Regenerative practices may reduce some input costs over time, but transition can involve risk, learning, new equipment, specialist advice, and short-term uncertainty. A payment model that rewards verified improvements can help farmers absorb that risk, especially where conventional commodity pricing does not reflect soil health, water quality, biodiversity, or landscape resilience.
The Food & Nature Resilience Fund creates a business model around a long-running policy challenge. Companies exposed to farming landscapes are being asked to pay for resilience before degradation becomes a larger cost. If the model scales, it could provide a template for nature investment that supports food production rather than treating productive land and environmental recovery as competing choices.
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