
Nature Investment Partnership: FAQs

We are partnering in a pilot project which aims to unlock long-term private investment into expanding native woodlands at landscape scale, creating new jobs and supporting rural communities in Scotland.
Where will the investment happen?
We are piloting the investment model in 4 locations across Scotland. The first is the Wild Heart Expansion Project in the Scottish Borders. In the other locations we are still in the early phases of engaging with land managers and local stakeholders – these locations will be identified in due course. Once the investment model is proven to work, and has been assessed by project partners against the interim principles for responsible investment, the team are interested in other locations in Scotland. Please contact [email protected] if you have landscape scale projects that are seeking investment.
How will communities benefit?
All partners are committed to delivering genuine and long-lasting community benefit from the investment. Partners will be speaking to communities in the project areas to find out what their needs are and to identify the best structure to deliver benefits.
We are following guidance from the Scottish Land Commission – particularly regarding approaches to delivering community benefits from natural capital projects.
How will communities be able to engage and when?
We are designing the engagement process now and there will be multiple opportunities for communities to engage in these projects. The Scottish Land Commission will be advising on this aspect of the project. The project in the South of Scotland is already speaking to communities in the project area.
Why aren't the investors giving all this money to community land owners?
This investment opportunity is available for communities who own land, NGOs and private land managers. There’s not enough community or NGO land in Scotland to deliver all the woodland we need to meet our climate change targets, so we need to invest in private land too.
Will there be opportunities for community ownership?
This project is not about acquiring land, or changing ownership, it’s about working with existing owners. The Scottish Land Commission will be advising on the approach to community benefit.
What types of trees will be planted?
The project aims to plant mixed native woodlands but may include some productive commercial species depending on existing land use and the views of consultees.
Who will pay for the trees?
At the moment, most new woodlands in Scotland are funded through the Forest Grant Scheme which is paid for by the taxpayer. In this new model, we will use an increasing amount of responsible private investment to pay for new woodland, reducing the burden on public finances and increasing the amount of woodland that can be created.
Is this about private investors buying more land?
No, this is about investing in nature restoration with existing land managers.
Is this about 'privatising trees'?
No. The majority of woodland in Scotland is on private land, along with woodland and forests owned by Forestry and Land Scotland, a public agency. Private investment in trees and woodland is not a new thing – private investors have been buying and selling commercial forestry for many years. The Woodland Carbon Code is designed to help bring responsible private investment into woodland creation to help tackle climate change and the investment partnership is responding to that need.
How will this affect existing land uses, like farming?
We envisage a rich mosaic of woodland, peatland and other habitats with a range of land uses, including farming, recreation and tourism. The projects will be designed to complement and work alongside existing land use. For example, the land manager may seek to plant trees on part of a farm, but not the whole area. Indeed, one of our investment partners owns a farm in southern Scotland with 500ha of new woodland planted alongside 2000 ewes.
Approaches like agroforestry can blend food production with woodland cover, and sporting activity can still occur in and around woodland. This is not about wholesale land use change – it’s a more nuanced approach that protects existing jobs and land use, while diversifying rural businesses and creating new jobs alongside these.
Why is NatureScot working with these companies?
NatureScot, and other public agencies, are working to grow responsible private investment in natural capital. This work supports the commitment from Scottish Ministers to grow responsible investment in natural capital, as set out in the National Strategy for Economic Transformation (March 2022). We have been in dialogue with Hampden & Co. following a workshop on climate change, and the ‘Finance for Nature’ event at COP26. They are keen to invest in natural capital in Scotland and wanted to work with us on this. Hampden & Co brought Palladium to the table and NatureScot engaged with abrdn to bring in access to wider capital and investment expertise.
Given the climate change emergency and urgent need to invest in nature, we are working in partnership with these businesses, and look forward to learning about the best ways to bring responsible finance into nature restoration through a new natural capital market. We are also working with other businesses on a range of initiatives and our door is open to other companies and investors – this is not the only opportunity we are working on. We will apply the same due diligence process (which involves background checks and risk analysis) to other businesses and decide who best to work with based on the investment potential and benefits for nature.
Why are we encouraging responsible finance?
We have significantly increased public investment in nature restoration in recent years, through the Nature Restoration Fund and Peatland ACTION funding in particular. However, restoring our natural environment in Scotland requires significant investment. There is simply not enough public money to pay for all of the restoration activity required, nor would it be fair to use public money in this way. That’s why responsible finance is needed to fill the gap.
Who will make money from this?
In line with the interim principles on natural capital investment, this partnership will aim to deliver significant and lasting community benefit from these projects. Land managers will also derive an income from the projects, providing long term security for rural businesses and supporting jobs. We will design the investment in a way that also creates new jobs and delivers benefits for nature, the local economy and tourism. Our investors will also make a return on the investment from the sale of carbon credits.
How is this different to current financing mechanisms?
Currently, projects generally combine existing government grants to pay for tree planting costs, with revenues from selling carbon credits to generate a profit. To help reach Scotland’s ambitious woodland planting and peatland restoration goals, our pilot project is exploring whether increased investment from the private sector can be harnessed to help landowners fund the up front capital costs of creating new woodland, or restoring peatland, in exchange for a share of the profits from carbon market sales.
What about other habitats?
The main focus of the investment is woodland, because of the more mature market for woodland carbon. However, the projects will invest in peatlands and other habitats as well, and will respect existing habitats, such as those that support important populations of birds and other species.
Who will the carbon be sold to?
An ethical framework has been developed to ensure they are legitimate businesses who have credible carbon reduction pathways in place. Carbon credits generated through the UK woodland carbon code can only be ‘retired’ (which means used to offset their emissions) by UK based companies. All carbon credits are tracked on the UK carbon market register. The project will not sell carbon credits to companies whose primary business model is focussed on the extraction fossil fuels.
Isn't this just green washing?
Greenwashing is when companies make claims about their environmental performance that they can’t substantiate. Or, when they use ‘good news’ to try and distract from a lack of progress in addressing negative impacts.
Compensating for unavoidable emissions by funding carbon removals projects, using credible codes and governance processes is different.
Some activities will always generate some carbon emissions – even after action has been taken to reduce emissions as much as possible, with the technologies we have available today. It is these unavoidable emissions that should be compensated for, or ‘offset’, by removing carbon from the atmosphere. Locking up carbon in new forests is an essential component of reaching our climate targets: carbon removal is the ‘net’ in net zero.
Our projects will engage with the voluntary carbon market in a way that sets an example of best practice: we will not enable greenwashing, and we will only work with corporate partners that have set and are delivering on ambitious net zero plans, which must prioritise reducing their own avoidable emissions first. We want to work with companies that are willing to pay prices for carbon credits that represent the true cost of creating woodlands and managing them over the long term.
Is carbon offsetting appropriate in Scotland?
Yes. The Scottish Government’s view is that the main focus of climate change mitigation action should be on reducing greenhouse gas emissions and increasing nature-based carbon sinks here in Scotland. Where relevant, in support of these efforts, ‘offsetting’ through investment in nature-based solutions should be in Scottish projects underpinned by government-backed codes (currently the Woodland Carbon Code and Peatland Code). We believe that it is important that claims around offsetting are done in the right way however – this is why we are only working with companies that have set and are delivering on ambitious net zero plans, which must prioritise reducing their own avoidable emissions first.
How will you quantify and measure success?
The partners will develop a set of key performance indicators including: Area of habitat restored; Carbon emissions savings; Jobs created; Community benefits delivered.
Who makes the decisions?
We will be guided by, and be accountable to, a Project Advisory Board comprising all of the project members and Scottish Forestry.
Why are you focussed on these locations?
We chose these locations (in the Scottish Borders and Atlantic Rainforest) because they offer contrasting circumstances in which to test the investment model, and both have existing initiatives that we can build on. They have a mix of public, private land and environmental NGO owned land, and a range of existing land uses (including farming, sporting estates, and commercial forestry).
Will the investment create new jobs, or lead to job losses?
The investment will create new jobs planting, maintaining, and potentially processing timber from the woodland. The projects will need deer managers and a range of contractors to deliver these projects. Where possible, we will work with local contractors to retain the economic benefits of the project in the local economy and will work with the local community and businesses to explore both short term and long term opportunities.
We want to design investments that deliver long term employment opportunities, building skills and capacity in the local economy. These could include stalkers, rangers, visitor managers, engagement practitioners and specialists involved in ecological monitoring and maintenance.
Our aim is to deliver the investment alongside existing land use, keeping and building on the skills and capacity in local businesses, including farming, sporting and other rural skills. Where land use change leads to changes in the skills and people required, we will support a transition to new roles with appropriate training as part of a just transition to net zero.
Can I get investment for my own project in Scotland?
If you are looking for investment for your own project, please contact: [email protected]. Projects need to be large (thousands of hectares), scalable and in locations with a good pathway to delivery on the ground.
Does the taxpayer pay for this in any way?
We want to demonstrate that private investment, if mobilised in the right way, can deliver strong value for the government and taxpayers. We will not increase grant funding to subsidise investor returns, or take on additional liabilities. Our goal is to use public funding to leverage private investment in a way that helps us to achieve more impact.
Will you use some of the finance yourself to fund projects - as NatureScot also owns land?
NatureScot will not handle any of the funds - the investment will go straight to the projects. Our role is to shape the projects and make sure we get the best outcomes for people and nature. We may explore a pilot project on some of our own land to develop and test the investment concept.
Is this a loan?
Investments into projects may take the form of loans, but they are more likely to take the form of a long term-equity agreement. Patient, risk-sharing capital is best aligned with the timeframes needed to establish mature woodlands and remove carbon. The investment model for each project will also depend on what each land manager needs.