This balancing act is a particularly delicate one, given that overly stringent assurance requirements might stunt progress by adding significant costs or complexity, potentially alienating both banks and farmers. And yet, a more relaxed approach to assurance could lead to inaccuracies or even fraud risks. Nevertheless, if the right middle ground could be found, then it could have the potential to unlock green financing in the agricultural economy.

Exploring assurance levels

Our refined use case served as the session’s foundation: In order to access green financing, UK arable farmers must share assurable data on their reduction in fertiliser use with banks. We then prompted the AG to explore different levels of assurance and evaluate their feasibility and desirability. 

High levels of assurance – such as verified historical fertiliser data, third-party audits, and detailed impact assessments – were quickly deemed too costly and impractical for widespread adoption. A mid-level approach, where farmers provide structured, machine-readable data (e.g., in JSON format), emerged as a more balanced option. This method would give banks reliable insights into sustainability efforts while being less burdensome for farmers. 

Practical challenges 

These assurance scenarios led our group to assess some of the more practical challenges that both farmers and banks face when dealing with farm-level data. One AG member emphasised the difficulties farmers face when collecting and reporting data on fertiliser usage, noting the variability in fertiliser usage as a prime example of this. Another member addressed the utility of this data, highlighting that farm-level data should serve a clear purpose. Without a direct link to compliance standards or broader utility, data collection risks becoming redundant—even if farmers are compensated for providing it. 

“The challenge isn’t merely collecting data but knowing which data to collect for specific standards or compliance requirements”. 

A holistic approach 

Ultimately, a more holistic, joined up approach to collecting data from farmers would be key to the success of our use case. This would help to avoid the risk of duplicate or siloed data demands. “There is a need to avoid fragmented efforts that overburden farmers by addressing siloed and repetitive data requests from multiple stakeholders”, noted one member. Ensuring that all members of the agricultural supply chain were involved in future iterations of this work is therefore crucial. Collaboration across the agricultural supply chain from farmers, suppliers, retailers, tech providers, banks and beyond will be needed to create a system that works for everyone.

Equally important for our future work is the development of a Tiered Assurance Framework that establishes baseline data collection methods. Pilots would then be run to test assurance mechanisms, refining based on feedback and scalability challenges as well as working toward global alignment on assurance protocols linked to GHG accounting standards. 

On September 30th we kicked off our first advisory group meeting, bringing together experts spanning the fields of Government, Tech, Environmental NGOs and Research, and Academia.

Connecting Farm Management with Green Financing

Our use-case driven approach serves as a lens to focus our work, with our advisory group meeting offering a collaborative space to refine and test our ideas. The central goal of our use case is to connect Farm Management in the real economy with green financing in the financial economy. Linking the two would mean UK farmers sharing trusted data on their sustainable practices with banks, in return for favourable financing. If successful, the project could bolster the UK’s food security and bring us closer to our net zero targets.

During our advisory group meeting, participants were divided into breakout sessions in which members quickly identified the key stakeholders needed along the value chain. “Retailers and food services have significant influence in shaping sustainable standards in the food industry,” noted one participant. Insurers were also highlighted as key players given their role in de-risking green investments and providing more confidence to financiers.

Practices vs outcomes

As the discussion evolved, members began to draw a distinction between financing sustainable outcomes and financing sustainable practices. Sustainable outcomes focus on achieving measurable environmental goals, such as reducing CO2 emissions. This aligns with frameworks like green bonds and sustainability-linked loans and offers banks a way to meet regulatory requirements and mitigate reputational risks.

One participant from an environmental NGO looked to practice-based financing as the more measurable option of the two, and a potential area of focus. “Practice-based financing might be a better choice as there is seemingly less risk. Banks might be less inclined to lend based on a predicted future outcome such as future CO2 reduction”. What’s more, funding sustainable practices might be more aligned with the value chain transformation aims of this project. If we look elsewhere for comparison, we can see schemes like HSBC’s Sustainable Farming Pathway with LEAF (Linking Environment And Farming) as an example of funding more sustainable practices. The scheme gives farming businesses discounted loan fees for transitioning to more sustainable practices.

Carbon reporting tools

Another piece of this puzzle are the tools that farmers need to collect and manage their sustainability data. Farmers have access to a plethora of carbon accounting tools but these lack a consistent framework, leading the food sector down a path of inconsistent data collection and reporting as one participant points out, “these tools are often not aligned and lack standardisation when it comes to data collection and reporting”.

For farmers to fully leverage green finance, they need better tools to collect and manage their sustainability data, while lenders need reliable, auditable data to assess and verify these practices. But, sharing of sustainable practice data between farm and lender is not well linked up. In some cases the data is shared via email or excel spreadsheets. Therefore, we see a fundamental requirement for a consistent data-sharing infrastructure to ensure traceability and trust in sustainable practices.

“The key challenge is that fragmentation exists between standards, tools and regional governance. Layering standards will only increase complexity, so we must simplify”

Assurance & Provenance

Two key elements in building this trust are assurance and provenance. Assurance refers to the metadata that allows stakeholders to trust a dataset, using machine-readable signals to verify data authenticity. Provenance provides a detailed record of where the data came from, who processed it, and what was done to it. This means that participants cannot deny their involvement in the data’s creation or modification, and it enables full auditability through a Trust Framework. Banks, in particular, are pushing for increased data traceability to establish trust in the supply chain, making this an essential component of our project.

Our next advisory group meeting is set to take place on 25th November. If you, or someone in your network would be a good fit, please sign up here or contact icebreaking@ib1.org for more information.

Icebreaker One is collaborating with Digital Catapult’s Digital Supply Chain Hub to help transform UK manufacturing through data-enabled supply chains. A key component of this work is to address the data governance challenges of information exchange in digital supply chains.

The timeliness of the project is reflected by the fact that supply chain leaders and businesses across the country are grappling with regulatory hurdles, a pressure to decarbonise, and cyber-threats to their operations. Our work will support the development of a robust data sharing governance that builds trust between organisations and produces more efficient, resilient and sustainable supply chains.

Our use-case centric approach in this instance will focus on Food Supply Chains, with the goal of enhancing data transparency, aligning with regulatory frameworks and unlocking green financing for farm management.

Advisory Group

Join our Food Supply Chain Advisory Group

Icebreaker One is convening an Advisory Group of industry experts that accurately represent stakeholders from across the Food Supply Chain. This is also aligned with Digital Catapult’s recognition of the need for collaboration between businesses and technology leaders to mitigate risk in supply chains.

With two virtual meetings, one in September and one in November 2024, the Advisory Group will:

• Represent perspectives, needs and challenges from across the industry
• Help to define and prioritise use cases to focus on
• Connect and collaborate with other stakeholders
• Share insights, learn from others and find solutions to shared problems
• Help to shape a Trust Framework solution

If you are a stakeholder in the Food Supply Chain, we need your input, sign up here to help us make supply chains more efficient, resilient and sustainable. Find the scope here.

Outcomes of project

By focusing on data transparency and alignment with regulatory requirements, the initiative aims to streamline operations, improve decision-making, and build trust between all parties involved in the supply chain—from farmers to retailers. This approach not only aids better management of resources but also supports the implementation of sustainable practices by enabling more efficient use of inputs and reducing waste.

Additionally, by unlocking green financing options, the project can provide the necessary capital for innovations in farm management, such as the adoption of environmentally friendly technologies and practices that further reduce the carbon footprint of the entire supply chain, making it more resilient and sustainable in the face of global challenges like climate change and food security.

The top five priorities to enhance food supply chains through collaboration include:

Data Transparency: Prioritise the openness and accessibility of data across the supply chain to ensure that all stakeholders, from farmers to consumers, have accurate and timely information. This transparency helps in making informed decisions that optimise resources and improve product traceability.

Regulatory Compliance: Ensure all data sharing and supply chain operations align with existing and upcoming regulations, particularly those related to environmental impact, food safety, and data privacy. Compliance reduces legal risks and builds trust with consumers and regulators.

Cybersecurity: Strengthen the security measures around digital data exchanges within the supply chain to protect sensitive information from cyber threats. Robust cybersecurity practices are crucial to maintaining the integrity and confidentiality of supply chain data.

Sustainable Practices: Develop and integrate sustainable practices within the food supply chain to reduce environmental impacts. This includes promoting the efficient use of resources, reducing waste, and enabling green financing for sustainable farm management technologies and practices.

Stakeholder Collaboration: Foster a collaborative environment among all stakeholders in the supply chain. This involves building frameworks for cooperation that enable shared benefits and mutual growth, especially in addressing common challenges like supply chain resilience and sustainability.