Nature Investment Partnership - Frequently asked questions

Our natural capital provides the essential services that make our lives possible and worthwhile: food, water, energy, medicines, building materials, recreation, flood resilience, pollination, carbon sequestration, and resilience to the increasing impacts of climate change.

Historically, natural capital has often been overlooked in decision-making, leading to the degradation and sometimes even loss of our natural assets, reducing their ability to provide the benefits that underpin our society and economy. As part of Scotland’s National Strategy for Economic Transformation (NSET), to support a wellbeing economy, the Scottish Government is committed to developing a values-led, high-integrity market that promotes responsible private investment in natural capital.

The Scottish Government already invests a significant amount of public money to maintain and enhance our natural capital, including investment in the creation of woodlands, the restoration of peatlands, and the protection of biodiversity. However, no government can meet the scale of the challenge alone. It is a public and private responsibility.

• principle 1: investment that delivers integrated land use;
• principle 2: investment that demonstrates engagement and collaboration;
• principle 3: investment that delivers public, private and community benefit;
• principle 4: investment that is ethical and values led;
• principle 5: investment that is of high environmental integrity;
• principle 6: investment that supports diverse and productive land ownership.

In the FAQs below we explain how the work of the NIP will support projects that deliver against these principles.

Projects that we support will create a rich mosaic of woodland, peatland and other habitats with a range of land uses, including farming, recreation and tourism. Such projects are 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. 

Approaches like agroforestry can blend food production with woodland cover, and sporting activity can still occur in and around woodland, or on restored peatland. This is not about wholesale land use change or ‘rewilding’– it’s a more nuanced approach that protects existing jobs and land use, while diversifying rural businesses and creating new jobs alongside these.

This will deliver both the principles in the Natural Capital Markets Framework and the Land Use Strategy.

The NIP is a group of natural capital experts, facilitated by NatureScot, that provides knowledge, insight and connections to aid the emergence of Scottish natural capital markets. We have been working together since 2023 to try and bring new and innovative approaches to the emerging market.

The NIP works directly with those working across Scottish natural capital - both on ‘sell’ side (project developers, farmers, estates and landscape-based community groups) and ‘buy’ side (companies and investors) – meaning that action is grounded in real-world experience.

The core NIP members are NatureScot, Hampden Bank and Aberdeen Investments. We also work with a range of local partners and other experts in the nature finance sector.  In 2026 we will broaden the NIP membership so that we can harness wider expertise, projects and funding streams from across the growing Scottish natural capital sector.  We already work with local partners such as the Tweed Forum, Flow Country Partnership, Alliance for Scotland’s Rainforest and others to explore solutions that work in different contexts

Roles of NIP members

NatureScot – alignment with Scottish Government policies, integrity and design of the best outcomes for nature

Hampden – debt finance, financial sector expertise and knowledge of the land market in Scotland

Aberdeen Investments – equity investment and debt finance, knowledge of the investment sector and carbon market

If managed properly, restoring nature will not only help put Scotland on the path to meeting its climate and nature commitments, but also yield rewards in terms of a just transition and bringing economic benefits to communities. 

Both public and responsible private investment in Scotland’s natural capital will be essential to meet the pace and scale of the challenge of delivering on our climate change and biodiversity targets and wider land use policy objectives.

Leveraging responsible private investment will be vital and Scotland will need to position itself accordingly in order to trade in nascent, but growing, natural capital markets. 

The Scottish Government is committed to ensuring these markets are values-led and high-integrity. The vision for this is set out in Scotland's Natural Capital Market Framework (2024)

These markets, and the projects that supply them, will help to restore Scotland’s nature and grow its natural capital, providing beneficial ecosystem services, economic and social benefits, and contributing to Scotland’s prosperity. They will also create good quality jobs, support a diverse and robust indigenous supply chain and directly benefit local communities including through financial contributions, opportunities for business and increasing wellbeing. 

Scotland is a landscape rich in woodland, peatland and other habitats - for example, 70% of the UK’s peatland and 46% of its woodland is in Scotland. Crucially, Scotland offers immense potential for the creation of more woodland, more biodiverse habitats and the restoration of huge tracts of peatland. Scotland is already a leader when it comes to planting woodland to generate carbon credits. For example, of a total 24.1 million Woodland Carbon units currently on the UK Woodland Carbon Registry (2026) 18.4 million will come from Scottish projects. 

Scotland’s natural capital, its landscapes and its local knowledge and skills means that it is well placed to become a world-leader in nature-based solutions. Tapping into diverse sources of funding including private finance from investors, banks and companies, is therefore crucial in helping Scotland to realise the benefits for nature and people that its natural capital presents.

At a global level, the development of nature markets has been slow but with notable positive forward steps including the growth in demand and prices achieved for high-quality carbon credits, and the emergence of both compliance and voluntary biodiversity units. Capital is engaging where revenues are clear and risks are better understood, for example through nature‑based carbon, blended public–private structures and long‑term corporate offtake agreements. 

In early 2026, the NIP convened leading Scottish businesses, the majority of whom are planning to engage with Scottish nature projects at scale in the coming period. With large buyers just starting to enter the market, NIP sees the potential for growth and the need to ensure a pipeline of high quality projects to serve this customer base. Likewise, investors and banks continue to seek ways to enter the market but routes in remain fragmented. This is a problem that NIP is working to solve. By convening both project developers and funders/investors, NIP hopes to reduce the friction between ‘sell’ and ‘buy’ sides to unlock finance flows faster.

There is a growing pipeline of investment ready Scottish nature projects, many of which are showcased on the Nature Finance Exchange. These cover a range of nature interventions and delivery of differing ecosystem services across varied Scottish locations.

For example the NIP has supported the development of  the Wild Heart Expansion Project in the Scottish Borders which seeks to support woodland expansion, and is working with the Flow Country Partnership to find ways to finance peatland restoration.

Please contact [email protected] if you have landscape scale projects that are seeking investment.

Projects need to deliver genuine and long-lasting community benefit. We  follow guidance from the Scottish Land Commission – particularly regarding approaches to delivering community benefits from natural capital projects. 

Investment opportunities are 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 needed to meet our climate change targets, so investment in private land is needed too.

NIP supported projects are not about acquiring land, or changing ownership, it’s about working with existing owners. Projects need to follow Scottish Land Commission advice approaches to community benefit.

No, this is about investing in nature restoration with existing land managers, regardless of tenure.

Investors engage with projects to generate a return on their capital over time, and this return is the reason why they are able to take the initial risk of investing. NIP supported projects are structured so that they don’t just deliver returns to investors but also deliver benefits to land managers and local communities. In line with the interim principles on natural capital investment, NIP requires that projects deliver significant and lasting community benefit. Land managers will also derive an income from projects, providing long term security for rural businesses and supporting jobs. The best projects will also create new jobs and deliver benefits for nature, the local economy and tourism. 

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. 

If you are looking for investment for your own project, please contact: [email protected]. Projects need to be large, scalable and in locations with a good pathway to delivery on the ground.

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.  Projects still need to meet the existing criteria for grant schemes.

NatureScot will not handle any funds - investments will go straight to projects. Our role is to support the growth of Scottish natural capital markets and to make sure we get the best outcomes for people and nature. We may test this approach on NatureScot land and are still exploring the options to do so.

There is rapidly growing interest from UK companies in paying for the carbon removal services provided by woodlands and peatlands. The number of projects that have been validated under the UK’s woodland carbon code, for example, has increased from 187 in 2019 to over 500 in 2023.

Landowners generally combine existing government grants, to pay for tree planting costs, with revenues from selling carbon credits to generate a return. To help reach Scotland’s ambitious woodland planting and peatland restoration goals, our pilot project is exploring whether investment from the private sector can be harnessed to help landowners fund the up front costs of creating new woodland, or restoring peatland, in exchange for a share of the profits from carbon market sales.

If we can achieve this, we will be able to scale up woodland creation and peatland restoration well beyond what is possible using taxpayer funding alone. We are developing a new investment model which will allow multiple land managers to collaborate at landscape scale. This will reduce costs and generate multiple benefits for communities and nature.