The Co-op has pledged around £1 million a year for “entrepreneurs, startups and groups” to work on cutting greenhouse gas emissions.
Up to 10 projects will be chosen for this year’s Carbon Innovation Fund, which offers grants of up to £100,000 each.
Applications have already opened and close on December 10.
The new scheme is being partly funded by profits from the Co-op’s compostable plastic bags, with the Co-op Foundation charity providing the rest.
The retailer is also creating a “funding stream” within its Local Community Fund for local groups “dedicated to helping the environment”.
Thousands of community organisations will share a predicted £3 million from the programme every year.
Co-op Food chief executive Jo Whitfield said: “It is clear investment is critical to building a greener, healthier and more prosperous future.
“Both the new Carbon Innovation Fund and our new commitment through our Local Community Fund will give us strong and impactful opportunities to make a difference.”
The news comes ten days after the UN’s climate conference, Cop26, concluded in Glasgow.