Facility for Investment Ready Nature in Scotland (FIRNS) - Guidance for applicants
The broad aims and programme outcomes for the Facility for Investment Ready Nature in Scotland are on the FIRNS Aims and Outcomes page.
Over its first two years, FIRNS has served as a catalyst for market innovation, adopting a bottom-up approach to build a more inclusive, effective and high-integrity natural capital market in Scotland. FIRNS Round 3 will seeks to support delivery of the commitments outlined in Scotland’s Natural Capital Market Framework.
Outcomes
For individual projects, there are a series of outcomes which we want projects to help achieve. There are four outcomes, which we expect all projects to contribute towards.
FIRNS funded projects will either aim to:
- Deliver replicable examples and tools to encourage landowners and businesses to use Scotland’s existing voluntary carbon markets: the Woodland Carbon Code and Peatland Code.
OR
- Create reliable ways to invest in Scotland’s nature and biodiversity, preferably using ideas from Scotland’s Natural Capital Market Framework (esp. Section 1: Attracting more high-integrity private investment in Scotland's natural capital pg.8-14) and Biodiversity Strategy and Delivery Plan.
And all projects will be required to:
- Engage meaningfully with communities in project design and delivery, fostering inclusion, and develop effective mechanisms to share benefits where appropriate, thereby supporting a just transition.
- Capture and share learning and best practice to enhance and scale high-integrity natural capital markets.
Applicants should focus on achieving either outcome 1 or 2 alongside outcomes 3 and 4. We encourage you to clearly state why your project meets your chosen FIRNS outcomes strongly in your application.
Grant level
FIRNS is inviting applications for three distinct types of project.
Please note, grant amounts are maximum amounts across the programme. It is anticipated that projects should apply to both NatureScot and the National Lottery Heritage Fund, where eligible, and apply for funding on a 50/50 basis.
- Market and Investment Readiness – grants up to £240,000 – these projects will demonstrate a credible ability to progress through to the latter stages of the investment-ready pipeline to establish legal contracts and secure investment. For example, by advancing their business and financial models to a level of maturity that is ready to meet demand from responsible buyers and investors in values-led, high-integrity natural capital-based markets or securing agreements and legal contracts from investors. These projects are likely to be place-based and/or focused on a particular ecosystem service and are likely to fall within steps 5 to 8 of the Green Finance Institute’s Investment Readiness Toolkit.
- Development Phase – grants up to £80,000 – these projects will assist project developers in the early stages of investment readiness. This grant will help to scope projects, identify and work with buyers and sellers and otherwise progress towards being an investable project. These projects are likely to be place-based and/or focused on a particular ecosystem service and fall within steps 1 to 4 of the Green Finance Institute’s Investment Readiness Toolkit.
- Market Infrastructure – grants up to £100,000 – these projects will create new infrastructure such as codes, standards, delivery mechanisms and resources that support land managers and local communities to access natural capital markets. These projects might not fit into the steps identified in the GFI toolkit or be focused on a specific place or ecosystem service; they will however address an identified gap in natural capital markets.
All projects supported in the third round of FIRNS must fit one of these categories and are expected to begin in June 2025 can run until 31 March 2026.
Building from experience and learning from FIRNS Round 1 and 2, FIRNS will prioritise projects that demonstrate the greatest momentum and potential for delivering meaningful impact in support of the aims of the Natural Capital Market Framework. To help achieve this, FIRNS Round 3 will prioritise Market and Investment Readiness projects. However, we still welcome applications for Development Phase projects that support the development of an investment-ready pipeline of projects and Market Infrastructure projects that support increased access to natural capital markets.
Who can apply
For eligibility, grant applicants may be:
- Constituted organisations, including registered charities and trusts, and constituted community groups
- Public bodies, including central government executive agencies, non-departmental public bodies, local authorities and national park authorities
- Private individuals and companies (within Heritage Fund eligibility criteria)
- Academic institutions
- Community interest companies and community benefit companies
We encourage private individuals and companies to explore partnership with other eligible groups, if possible.
Where applications are received from partnerships or organisations working collaboratively, a lead applicant must be identified. If successful, the lead applicant will be required to accept the Terms and Conditions of the Funding Offer, provide overall project updates and claim funds on behalf of all project partners. We will ask you to tell us how the project partnership will be managed in your project proposals.
What types of projects will FIRNS fund
This is a non-exhaustive list of possible project types based on the content of Scotland’s Natural Capital Market Framework. FIRNS proposals could include nature finance focussed projects that:
- Strengthen and expand the Woodland Carbon Code (WCC) and Peatland Code (PC)
- Support the development of robust and credible pathways for private investment in nature restoration and biodiversity.
- Advance integrated land use practices
- Improve the delivery of community benefit from land
- Support the creation of landscape scale opportunities
- Facilitate and promote investments by Scottish businesses and industries, including energy transmission companies, in Scotland’s natural capital
- Enable the development of investable projects or project portfolios
- Support climate adaptation
- Explore the opportunity of private investment in publicly owned land
- Support the participation of land managers in natural capital markets
- Contribute to nature restoration priorities in local or regional development plans.
You can also find examples of the types of projects funded through FIRNS Round 1 and Round 2.
What the grants can pay for (eligible and ineligible expenditure)
FIRNS can fund up to 100% of eligible costs, typically split 50/50 between applications to NatureScot and the Heritage Fund. Additional partnership funding and/or in-kind contributions can be included and will increase the value for money assessment of your proposal.
Specific costs that are eligible include:
- The salaries of staff working on the project.
- Training of staff working on the project to help them gain a better understanding of natural capital markets and the needs of potential investors.
- Specialist (commercial, legal, financial, engagement) consultancy and technical expertise to:
- Engage with communities in the design and implementation of proposals, including the costs of supporting communities and building their capacity to engage meaningfully.
- Design and structure a business model that will produce revenue or cost savings.
- Provide mentorship and training in the development of investment-ready proposals.
- Appraise revenue generation approaches (including some degree of market testing/research).
- Appraise potential investment and associated repayment terms.
- Conduct financial modelling.
- Guide structuring investment and raising capital.
- Guide the establishment of suitable legal and other necessary structures to manage income generation, external investment, repayment processes and agreements and project governance.
- Guide and conduct investor due diligence requirements.
- Identify and engage with potential investors and buyers.
- Engage landowners and develop legal agreements.
- Developing marketing and sales promotion strategies and materials to allow you to confidently approach potential investors, where a strong rationale for their role in the advancement of the project can be given.
- Evaluation and impact measurement: eligible costs may include investments in creating theories of change, impact management, data collection, analysis, and reporting.
- Consideration of how the revenue generating aspects of the proposal will be carried out and managed on an ongoing basis.
- Organising or attending promotion or demonstration events aimed at finding suitable investors.
- Costs for the production of shareable outputs and templates that allow learning to be shared from the project and successful models to be scaled and replicated.
- Third sector organisations can claim full cost recovery on a portion of their organisational overheads (such as those related to day to day running costs, insurance, or routine accommodation) in respect of staff working on the project, in addition to salaries.
- Baselining survey costs: these can be covered only as a small part of a larger project with a clear pathway to attracting private investment.
- Securing consents: these are only eligible if you can clearly show that these will make your proposal significantly more likely to succeed in attracting buyers and/or investors.
The grant cannot pay for:
- Capital spending, such as physical works, buying or leasing land or equipment
- Costs already covered through other funding
- Costs incurred before you’re awarded the grant
- Meeting your own legal obligations (except related to designing and structuring an investment model)
- Paid-for lobbying, which means using the grant to fund lobbying (through an external firm or in-house staff) to influence Parliament, government or political activity, or trying to influence legislative or regulatory action
- Using the grant to directly allow one part of government to challenge another on topics unrelated to the agreed purpose of the grant
- Expenses, such as for gifts or entertaining, specifically aimed at influencing government policy or investors
- Input VAT reclaimable by the grant recipient from HMRC
- Fines, charges or dividends
- Payments for activities of a political or wholly religious nature
Contingency – if you encounter unexpected costs, there will be a process in place to assess this
Fair Work First
Fair Work First - requirements of the Fair Work First Policy relating to the real Living Wage and channels for Effective Voice
Fair Work First is the Scottish Government's flagship policy for driving high quality and fair work across the labour market in Scotland. This is increasingly being implemented by applying fair work criteria to grants, other funding and contracts being awarded across the public sector, where relevant to do so.
- We are introducing two elements of the Fair Work First policy for all new funding offers issued from 1 July 2023. These are: for employees to receive at least the Real Living Wage; and for workers to be provided with appropriate channels for effective voice.
Further information can be found in Fair Work First – Guidance for funding applicants.
In exceptional circumstances, if an applicant cannot afford the real Living Wage (rLW) there is potential to increase the grant to meet the rLW. Should you have any concerns regarding this, you should contact us at [email protected] or contact your Funding Officer at the earliest opportunity. We may consider measures to ensure the Fair Work First requirements remain proportionate and this will be considered by NatureScot on a case by case basis.
Funding recipients must provide evidence that they comply with the Fair Work First Policy by completing a Fair Work First – employer declaration form.