Tesco has pledged £10 million to a new initiative that aims to end land clearance for soy farming in at-risk Brazilian grassland.

The supermarket giant has agreed to contribute the sum to Funding for Soy Farmers in the Cerrado over a five-year period.

The Cerrado covers more than 20% of Brazil and is home to an estimated 2,500 different species of vertebrate and 90,000 different insects.

Despite its ecological importance, only 3% of the landscape is protected by law, according to WWF data, and it is being destroyed faster than the neighbouring Amazon.

The fund aims to incentivise soy farmers to use only existing agricultural land and support the Cerrado to become a verified zero deforestation area for the crop.

Soy is one of the most common ingredients in animal feed, and a large proportion of the soy used in Tesco’s supply chain comes from the Cerrado.

In 2018, the chain published its transition plan to achieving net-zero deforestation in its sourcing of soy by 2025.

Tesco Group’s chief executive Dave Lewis said: “We source much of our soy for animal feed from Brazil and the Cerrado region, so it’s only right we play a leading role in protecting this biodiverse region for future generations.

“The Funding for Soy Farmers in the Cerrado initiative is the first step in safeguarding a huge, biodiverse and carbon-rich area of Brazil, while also allowing farmers to continue to farm soy sustainably.

“This is an important next step in the Cerrado’s sustainability journey, but it will only be truly transformative if more organisations come forward and support it.”

Other companies supporting the initiative include animal feed business Nutreco and international fish farming business Grieg Seafood.

Tanya Steele, chief executive of WWF UK, said: “The Cerrado, like its neighbour the Amazon rainforest, is critical to the survival of our planet but it has never been under greater threat.

“This move from Tesco is a significant step forward for the sector and demonstrates real leadership in the fight to protect precious places like the Cerrado, a unique habitat that is home to nearly five percent of the world’s biodiversity.

“If we don’t protect our forests and precious natural habitats, we lose in the fight against climate change. We urge other businesses, foundations and governments to step up and join the fight.”

Brazil is one of the world’s biggest producers of soy and the country has quadrupled its production in the last 20 years to meet demand.

Environmental groups estimate that between 75% and 90% of the global soy crop is used for animal feed.