Transition finance: Why agri‑food leaders should care now

The UK agri‑food system is under growing pressure to deliver net zero in a way that is both practical and fair. Most businesses already understand the “what” (emissions need to fall) and the “how” (improving farm practices, utilising data, shifting demand for product categories, decarbonising operations and supply chains). The harder question is still the one that comes up in many workstreams: Who will pay for it - and how does money flow to the right places at the right pace?

That gap matters because agri‑food is a high emitting sector, yet it receives a disproportionately low share of climate finance, only 4% (Net Zero Transition Plan for the UK Food System). Finance is repeatedly flagged as a constraint on delivery, especially when the transition must also be a just transition, not one that pushes costs and risks onto farmers and SMEs, which is what organisations like Fair Miles are exploring.

This is where transition finance becomes directly relevant. In simple terms, transition finance is about mobilising capital to help high emitting sectors and companies decarbonise credibly. For agri‑food, it offers a route to move the conversation from ambition to delivery and to do it in ways that investors and lenders can assess and contribute to with confidence.

The Transition Finance Council’s (TFC) new publications are useful because they aim to tackle exactly this credibility and confidence problem: clarifying what credible transition planning and implementation looks like for companies, how finance can plug into sector transition planning, and what policy conditions can unlock flows at scale.

What is the Transition Finance Council?

The Transition Finance Council (the TFC) was co-launched in February 2025 by the UK Government and the City of London Corporation to drive forward the recommendations of the Transition Finance Market Review (TFMR) and position the UK as a global hub for raising and deploying transition finance.

The Transition Finance Council plays a central role as a market convenor, bringing together over 80 senior leaders from across finance, industry, policy and civil society, representing more than 40 institutions.

The TFC’s theory of change sets out how targeted interventions - such as guidelines, tools, pilot projects, and market engagement - can deliver the systemic changes needed to scale credible transition finance in the UK and globally.

In practical terms, the TFC is focused on building a trusted, scalable ecosystem that mobilises capital for the net zero transition at pace and scale.

What has been released?

Outputs	Description	Who is this relevant for?
Transition Finance Guidelines: Exposure draft	Designed to provide a methodology for capital providers to identify, qualify and scale general entity-level transition finance. Exploring the credibility of a real economy entity’s transition ambition, planning, investment and implementation. Also, provides clarity for companies of expectation of capital providers.	Capital providers (lenders, investors), Companies and industry
Sector Transition Plans: The Finance Playbook	This Finance Playbook (the Playbook) provides practical guidance to support this mobilisation of finance for the net zero transition, helping stakeholders understand the role of finance and how it can be effectively integrated into sector transition plans and technology scale-up roadmaps.	Wide range of stakeholders, including; Businesses, Industry, Finance and Government for sector level thinking and guidance
Implementation Handbook	Explores how to apply the Transition Finance Guidelines and the different users and use cases of the Guidelines.	Businesses and Industry
Four policy briefs for scaling transition finance flows	These policy briefs set out four targeted, market-led recommendations to the UK Government to help address gaps in clarity, consistency and market confidence. The briefs recognise how regulators, government and industry all recognise the opportunity and how the policy environment is one of the key levers to unlock capital flows	Relevant to all
Transition Finance Council: Year-end progress report	Provides an overview of key outputs of the Transition Finance Council and the progress made in year 1 and plans for year 2, from framework development to implementation and global engagement.	Relevant to all
A UK Roadmap to Scaling Long-Duration Energy Storage	The Technology Scale-Up Roadmap on Long-Duration Energy Storage (LDES) applies the Playbook’s co-creation and finance integration Principles to a specific emerging technology area.	Useful for all to see practical examples

Here is a link to all of the Transition Finance Council’s publications.

Why these publications matter: Credibility, confidence, and scale

For many agri‑food businesses, the barrier is not a lack of good initiatives. It’s that transition activity is often fragmented, hard to compare, and difficult for capital providers to judge consistently. When investors and lenders can’t tell whether a transition plan is credible or can’t see how ambition becomes delivery – then capital either does not flow or flows too slowly.

The TFC’s package is designed to improve three things the market needs to scale:

Credibility: clearer expectations for what “credible transition” looks like

Comparability: more consistent ways to assess progress and reduce greenwashing risk

Practicality: tools and examples that can be used in real-world financing decisions

Sector transition planning: Linking plans to investable delivery

A recurring weakness of sector transition plans (in any sector) is that they can describe ambition without showing how the plan becomes investable. The TFC sector transition guidance, combined with the Broadway Initiative’s sector transition plan guidance, provides sectors/industries a clearer guide on how to incorporate net zero ambitions and transition finance into a coordinated approach.

This is particularly relevant for agri‑food because of the food system’s complexity, with so many levers sitting across multiple stakeholders throughout the value chain. If finance is not integrated from the outset, plans can become aspirational rather than actionable.

Transition Finance Guidelines (Exposure Draft) explainer

The simple explanation

The Transition Finance Guidelines Exposure Draft is a voluntary guide designed to help capital providers (lenders and investors) answer a practical question:

“Is this company genuinely transitioning - and can we finance it with confidence?”

It focuses on entity level transition finance, which matters because most business finance is general corporate finance (money raised and used across the business), not money ringfenced to one “green project”. The Guidelines therefore look at the credibility of the whole entity’s transition, from ambition, planning, investment and implementation, because that is the level at which most corporate finance is provided. It gives capital providers a more credible way to assess transition at the company level.

The objectives of the guidance is to create legitimacy, scale, transparency and comparability so both sides of the market can move faster with more confidence. The guidance has been designed by the market for the global market, showing the UK global leadership, and has been built to compliment existing internationally frameworks.

How the Guidelines are structured

The guidance provides:

Principles = what must be true for transition finance to be credible

Assessment Factors = what you assess to determine if the Principles are met

It also includes Contextual Factors, to reflect issues that can materially affect credibility depending on sector and context including adaptation and resilience, nature and biodiversity, offsetting.

For agri‑food, those contextual factors are not “nice to haves”. They often shape real delivery feasibility and risk, especially where supply chains depend on nature, soils, water, and resilience to climate impacts.

Why this matters

For business leaders and sustainability teams, the Guidelines can act as a practical tool to get clarity on what capital providers are looking for - what evidence will a lender or investor look for, and where might credibility be challenged?

For the finance industry, it gives a clearer way to connect transition ambition to the kinds of evidence and decision points they need as capital providers.

And for the wider system, it offers a stronger basis to increase confidence that money is flowing to transitions that are meaningful, not just well packaged.

What happens next with the Exposure Draft?

The Transition Finance Guidelines Exposure Draft is being piloted through road‑testing and additional assessment examples, with lessons used to inform a future final publication. In parallel, the TFC plans to expand international engagement to increase alignment on transition finance approaches globally.

The Implementation Handbook: Making the guidance usable

The implementation handbook acknowledges every company’s transition journey is different. It provides different case studies and specific guidance for different asset classes.

In practice, this is important because the same “credibility questions” show up across different types of financing and ownership structures. The Handbook is there to help users interpret the Guidelines and understand how they can be applied in different contexts.

For agri‑food businesses this helps those that are struggling to understand how their unique business and its challenges can use the guidance appropriately, with its recognition that one size does not fit all.

The four policy briefs: What they signal (and why industry should pay attention)?

The four policy briefs from the TFC shows the unlocks at a government and policy level that will strengthen the scale, speed and durability of transition finance. They look at how to allocate, align and activate transition pathways and provide industry with a good understanding of the future direction of transition finance at a top-down level.

For agri‑food businesses, these briefs are useful not only for policy audiences, but also because they indicate the “direction of travel” of the enabling environment that will shape access to capital.

What can businesses and industry do with these outputs?

A clear, practical set of actions:

Use the Exposure Draft as a practical tool
Review how your transition planning aligns with capital providers’ likely expectations, and where evidence is thin or credibility could be questioned.

Strengthen the evidence trail
Connect transition ambition to implementation, investment planning and governance so progress can be assessed, not just described.

Use the policy briefs to anticipate market expectations
The briefs help businesses understand the policy levers being discussed to improve clarity, consistency and market confidence - all of which affect whether capital flows at scale.

What does this mean for the UK agri‑food industry?

The agri‑food industry is a priority focus given that the food system is a high emitting sector that contributes approximately a third of global greenhouse gas emissions.. This was recognised when the Net Zero Council conducted a deep dive on IGD, WRAP and EY’s system transition plan: A Net Zero Transition Plan for the UK Food System. Read our full article describing the deep dive.

These new outputs from the TFC provide an important bridge between the climate transition and finance. There is now an opportunity for the food system to come together as a diverse system to tackle the financial barriers that prevent progress. By adding the financial element into future transition planning, we can begin to address the issue of “who will pay for this?” and ensure the transition is transparently and efficiently implemented.

The mere 4% of climate finance going to the food system must be addressed. This guidance unlocks opportunities for businesses to present themselves as credibly transitioning, attract more dedicated pools of capital and expand and diversify their investor base.

What are the next steps for the TFC?

In September 2025, the TFC and Net Zero Council (NZC) agreed to work together on credible sector transition plans. In March 2026 the TFC’s Policies, Pathways and Governance Working Group formally joined the NZC as a sub group to develop finance plans alongside those sector plans.

The TFC has three objectives going forward:

Internationalisation and alignment, positioning the Transition Finance Guidelines as a globally recognised reference point

Industry road testing and domestic adoption, supporting UK and international financial institutions and corporates to apply the Guidelines in real world financing decisions

Market development and instruments, catalysing investment by working with industry to advance transition-aligned market instruments