You can download a word version of the IRNS application form at the foot of the page.
Investment Ready Nature in Scotland (IRNS) aims
The IRNS is a joint initiative between NatureScot, the Esmée Fairbairn Foundation and the National Lottery Heritage Fund Supporting the development of environmental projects in Scotland that:
- align with the Scottish Government’s Interim Principles for Responsible Investment in Natural Capital
- aim to value and monetise ecosystem services derived from the restoration of natural capital assets, in a model that will attract and repay investment or support an investment model that can be scaled up and duplicated elsewhere.
The IRNS shall provide technical assistance grants to project developers to help them:
- to get support from professional advisors to develop their project, address barriers to investment and present an attractive case for potential investors
- to build capability and capacity to attract financial investment into natural environment projects
- to benefit from the shared experience and direct support from other natural environment projects
Grantees of the IRNS will be expected to make any progress and knowledge gained through the fund openly available for the benefit of others. This is to help the development of:
- the natural capital investment sector
- a strong community of practice that will support natural environment projects
- supportive policies and regulations, including alignment with future government funding schemes taking over after the IRNS or on a wider level
Grantees proposals should focus on generating revenue from ecosystem services or on supporting similar types of transactions, rather than focusing only on material goods or commodities1. Examples of relevant ecosystem services that could produce revenue include:
- selling carbon credits from woodland creation or peatland restoration, using the Woodland Carbon Code or Peatland Code
- selling biodiversity units from a habitat bank
- selling ‘catchment services’ (such as improved water quality and natural flood management benefits) resulting from natural environment improvements
- selling climate change mitigation/management services (such as water temperature management, heat island effect mitigation, water storage, etc...)
The IRNS aims at supporting a diverse range of natural assets type restoration, ecosystem services and investment models as well as projects involving a range of organisational contexts i.e. businesses (for-profit organisation through partnerships), land owners, communities, third and public sector organisations. We welcome proposals beyond the examples above, including ones which consider multiple ecosystem services from the same land. Exceptionally, grants may be offered to support the development or refinement of platforms, codes or metrics supporting the development of nature based solution and ecosystem services markets. Projects able to value new ecosystem services or in an innovative way are especially welcome to apply. Successful projects will demonstrate alignment with the Scottish Government’s Interim Principles for Responsible Investment in Natural Capital, in particular creating innovative ways to share benefits between public, private and community interests, contributing to a just transition.
Eligibility criteria (organisational status)
Due to internal constraints, the Investment Ready Nature in Scotland grants can only be paid to a limited set of eligible types of organisations.
Grant applicants may be a:
- not-for-profit organisation*, including charities and non-governmental organisations
- public body*, including local councils and national park authorities
- academic institutions, community interest companies and community benefit companies
*The following are not eligible but those organisations can be partners in bids:
- central government department or one of their executive agencies
- non-departmental public body
- for-profit companies
As show above, some non-eligible organisation types can still be partners in a bid although only eligible organisations will be able to receive the grant funds directly.
Please get in touch with us if you have any doubts around eligibility:
What the grants can pay for (eligible and ineligible expenditure)
The Investment Ready Nature in Scotland grants are to support the development of proposals that aim to make natural capital restoration attractive to potential buyers of ecosystem services and, ultimately, private investment. All costs must be directly associated with developing the investment readiness proposal. When carried out, these must have the potential to deliver outcomes that meet all or most of the fund’s aims.
The grant can fund up to 100% of eligible costs.
Third sector organisations can apply for cost recovery of up to 20% of their staff costs (organisational overheads such as those related to day to day running costs, insurance, or routine accommodation).
Specific costs that are eligible include:
- Internal organisational capacity
- The salaries of staff developing the investment readiness proposals.
- Training of staff developing the investment readiness proposals to better understand the needs and how to approach potential investors.
- Specialist consultancy and technical advice to design and structure an investment model that will produce revenue or cost savings
- commercial appraisal of revenue generation approaches (including some degree of market testing/research)
- commercial and legal appraisal of potential investment and associated repayment terms
- business and financial modelling
- technical support for structuring investment and raising capital
- legal and governance advice, particularly for setting up suitable legal and other necessary structures to manage income generation, external investment, repayment processes and agreements
- investor due diligence requirements
- developing marketing and sales promotion strategies to allow you to confidently approach potential investors and successfully win external investment in your project
- impact measurement, presentation and management (what metrics to choose, how to report them to buyers and investors…). This does not include the development of methodologies or baseline surveys.
- consideration of how the revenue generating aspects of the proposal will be carried out and managed on an ongoing basis.
- The organisation or attendance/registration to promotion or demonstration events aimed at finding suitable investors.
- Activities required as a condition of the grant which contribute to sharing learning and expertise with the natural capital community of practice (we expect around 5 days including preparation and attendance, see last section below).
- Other activities
- We will only fund activities such as securing consents or market research if you can clearly show that these will make your proposal significantly more likely to succeed in attracting buyers and/or investors.
The IRNS will be providing grants ranging from £30,000 to £100,000. While grants awards will not go below the £30,000 floor, the upper limit can potentially be increased if it is proven necessary and if the expected outcomes of the project are deemed worthwhile by the IRNS board.
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
Grant application award procedure
In the application form, applicants will be asked to answer a series of questions around their organisation or partnership as well as the project that will inform the assessment process based on a scoring system referring to a specific set of criteria.
- Initial screening will be conducted by NatureScot based on the eligibility criteria, application documents, alignment with the IRNS aims and NatureScot / Esmée Fairbairn Foundation / National Lottery Heritage Fund values.
- The assessment and scoring (further details below) will also be conducted by NatureScot, possibly with additional help.
- Recommendation for approval will then be conducted by an expert panel composed by individual with relevant expertise from the Scottish Wildlife Trust, the Scottish Environment Protection Agency (SEPA), the Scottish National Investment Bank, and Highlands and Islands Enterprise amongst other.
- Formal approval will then be confirmed by NatureScot, National Lottery Heritage Fund and Esmée Fairbairn Foundation.
Grant application assessment
In addition to general information on the project and the organisation or partnership behind it, the application will consist of six set of questions focusing on different areas. Each group of questions will be assessed according to a set of criteria that are clearly detailed on the Assessment: questions and selection criteria section of the website.
For each set of questions you will have a total of 500 words to provide a concise answer that will address as many of criteria as possible. The answer can include bullet points, as well as appendices for reference such as tables, data sheets, maps, graphics, etc...
Each group of question will be awarded a final score amounting to the average of the scores obtained on each individual criteria.
The sum of these final scores will determine the overall score of the project.
The IRNS do not expect projects to be able to provide detailed answers to all these questions and covering all the criteria, but bids should start thinking around these themes and at least provide rough estimates about the potential impact of the project.
Assessment: questions and selection criteria
In addition to general questions around the project and the organisation/partnership behind, applicants will be required to answer the following six groups of questions (500 words maximum per answer; bullet point lists are acceptable, as well as appendices including tables, data sheets, maps, graphics and illustrations used as references). Each group of questions will be awarded a final score amounting to the average of the scores obtained on each individual selection criteria as detailed below. Each selection criteria will be graded from 0 to 3 as follows:
0: does not show any evidence of meeting criteria
1: shows only weak evidence of meeting criteria
2: shows acceptable evidence of meeting criteria and any negative evidence is weighed out by good evidence
3: shows strong evidence of meeting criteria
The project will then receive a total score that will be the sum of final scores of each group of questions.
In answering all questions keep in mind that the assessment process is design to favour projects that are the most aligned with the Scottish Government’s Interim Principles for Responsible Investment in Natural Capital and is not solely based on the ability of a project to generate revenues from ecosystem services or value for private investors.
1. About you
Please provide a summary of the organisation/partnership – its origin, major delivery milestones, and experience of working strategically, innovating and influencing.
- Strength of the organisation/partnership in terms of past experience in delivering similar projects or experience of its current members in that field
2. The innovation and the business model
Describe how the project will help realise and monetise the benefits provided by natural capital and how the model will be scalable and replicable. Who are the stakeholders and who have you identified as potential buyers of the ecosystem services delivered and how confident are you that they will be interested? What are your expectations of private investment to fund the natural capital restoration (i.e. at what stage of the project, how will revenue streams be used to repay them, what scale of private finance could be mobilised through the proposed intervention). Does the project integrate ESG criteria to attract buyers or investors? (i.e are you delivering ESG compatible metrics to either investors or buyers?)
- The proposal demonstrates clear thinking about the future business model
- The proposal considers positive and negative impacts across all four capitals (natural, social, economic, human)
- Does the project explicitly promote ESG integration as per the UN Principles for Responsible Investment?
- The proposal demonstrates clear and practical thinking about the buyers of ecosystem services
- The business model is replicable and scalable
- The targeted market in terms of buyer of ecosystem services is large (national vs regional vs local)
3. Environmental Impact
Demonstrate how your project will have a direct positive environmental impact, and explain any potential additional indirect benefits. What indicators will you be using to monitor this impact? Describe any potential trade-offs and how these will be managed.
- There is an holistic assessment of the environmental impact (i.e. not focussing or measuring solely carbon, but also biodiversity and other benefits) and the project aims at maximising it
- Is the project protecting or restoring a habitat that is widespread in Scotland and in a state that would allow the project to be replicated/scaled up easily?
- Does the proposal recognise potential trade-offs and present options to manage them?
4. Monitoring and impact
What project management methods will be applied, how will you measure the progress of IRNS funded work and what milestones and KPIs will you use to measure progress and success? In terms of green washing what are the risks that you foresee and how do you plan on mitigating these? What are the main other risks you have identified and how will you manage these?
- The IRNS-funded work will have an effective project management plan
- The selected milestones and KPIs are appropriate and take a multi-capital approach to measuring impact and success
- The project will rely on recognised codes (i.e. Woodland Carbon Code, Peatland Code, Gold Standard…) or make us of approved frameworks or scientifically backed methodologies to measure impact
- Is the risk of green washing clearly identified and appropriate measures will be taken to minimise it?
- How relevant are the risks identified and how adapted are the envisioned mitigation measures?
5. Engagement and just transition
How does the project take into account communities’ interests, involvement and share benefits with them (economic, environmental, and social). For instance what level of engagement will you seek from stakeholders and partners (co-design, participation, involvement, consultation)? Is the project supported by any other organisation, community, public body, Agency, University, NGO …?
- The proposal has identified all of the relevant stakeholders (including public bodies, local communities, NGOs, etc…)
- Is the project well supported by other organisations?
- Does the project actively involve local communities, including tenants, and give them opportunities to influence decisions about land and land use change, in line with the Scottish Government’s Guidance on Engaging Communities in Decisions Relating to Land?
- Is there practical consideration of how to share benefits between public, private and community interests e.g. shared ownership, sharing future increases in land and ecosystem services values, business opportunities, Community Wealth Building?
- The proposal recognises and responds to local circumstances, acknowledging the suitability of land for particular uses and seeks to protect and enhance existing natural capital
- Has the applicant considered whether ownership of land is necessary or if management agreements or other forms of collaboration/partnership with communities can deliver the required outcomes and wider social and economic benefit?
6. Value for money
How will the IRNS grant help you move to investment readiness? (Consider the GFI pathway).
What inputs (hiring, training, and contracting) are you buying? How will they help you to progress? Will the project be able to credibly demonstrate investor returns and how likely is it that the project will secure private investment? Will the project have a transformational impact and directly enable or support the development of other natural capital projects in Scotland?
Would the project require additional funding support to leverage in private finance?
- Does the project bring good value for public money in terms of delivering high quality and relevant outputs, costs savings, and environmental impact?
- Will the project enable to leverage a substantial amount of private funding in relation to the potential public funding required?
- Will the project support the natural capital project pipeline in Scotland?