Lloyds Publishes Industry-leading Farming Report to help Clients Tackle Climate and Nature Risk

Farming with Nature: Mapping the Growth Opportunity for UK Agriculture is the most comprehensive analysis of its kind, mapping 5.1 million hectares - almost a third of the UK’s farmed land - using geospatial data, on-farm assessments, and new economic insight.

The report also marks the introduction of Lloyds’ Agricultural Transition Finance, a new product launching later this year, designed to support farmers transitioning to more sustainable and regenerative systems.

Following the warmest spring and summer on record, this report pinpoints how farmers can achieve the greatest financial returns while addressing mounting risks from climate change and biodiversity loss.
 

Translating Insight into Impact

The report identifies 1.2 million hectares of UK farmland with the highest potential for habitat creation that can act as carbon stores and boost beneficial species. It also highlights 600,000 hectares ideal for tree and hedge planting to help farms reduce flood risk and soil erosion while improving water retention and biodiversity.

With drought now 70 times more likely due to climate change, managing a farm’s water system has never been more important. The analysis shows 700,000 hectares in drought-prone regions that could benefit from improved water management.

These above-ground insights are already delivering tangible benefits for farming businesses. In a 400-hectare arable system in Warwickshire, farmers could save up to GBP 61,000 (USD 77,470) annually by adopting practices such as cover cropping, diverse rotations, and legume fallows. At a 154-hectare mixed system in Shropshire, rainwater harvesting and a switch to a grass-based regenerative cattle system have saved GBP 30,000 (USD 38,100) by reducing feed costs.
 

New Partnerships and Products to Drive Sustainable Farming

Andrew Walton, Chief Sustainability Officer at Lloyds Banking Group:

"This report marks a major step forward in understanding how farming and nature interact across the UK. Our latest insights show how targeted support can strengthen farming businesses and help restore ecosystems, but challenges remain. As the UK’s largest agricultural finance provider, we’re committed to supporting individual farming businesses that sit at the heart of the UK’s rural economy."

Kilkenny Farm, Gloucestershire UK (Caption: Lloyds Banking Group)

No One-Size-Fits-All Approach

The report combines national and regional opportunities, identifying where specific practices deliver the greatest impacts for farmers and rural businesses. In East Anglia, where water scarcity is a concern, tree planting and cover cropping are recommended. In Scotland, crop rotation and nutrient management enhance soil quality. In Wales, rotational grazing boosts fertility and water quality, while in the South West, improved slurry management and rainwater harvesting strengthen resilience.

Lee Reeves, UK Head of Agriculture at Lloyds Bank:

"Every farm is unique and there’s no one-size-fits-all solution. As the largest provider of finance to the sector, we know that farmers are best placed to decide how to manage their businesses, but key industry partners need to support them. Our new Agricultural Transition Finance loan is designed to help ease cashflow pressures while supporting long-term resilience and positive outcomes for nature and the environment. It’s all part of our commitment to support farmers with data-driven insight, practical advice, and a range of financing options that can help them succeed with more sustainable farming systems."

Michael Strother, Owner of J M Strother and Son, Fowberry Moor Farm, United Kingdom (Caption: Lloyds Banking Group)