The Scottish Government and NatureScot, working in partnership with the National Lottery Heritage Fund, have announced a grant scheme to support projects that shape and grow the use of private investment and market-based mechanisms to finance the restoration of Scotland’s nature. Through the Facility for Investment Ready Nature in Scotland (FIRNS), grants of up to £240,000 will be offered to organisations and partnerships to help develop a viable business case and financial model, to attract investment in projects that can restore and improve the natural environment.
If managed properly, restoring of our environment and 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.
The Green Finance Institute estimates that between £15 billion and £27 billion, in addition to current public funding, is needed over the next 10 years to restore nature across Scotland. Much of this will have to come from the private sector. Whilst this remains an ambitious target, restoring and protecting naturally functioning ecosystems has repeatedly been shown to provide cost-effective and durable solutions that often provide better value than grey technology and engineering.
Leveraging responsible private investment will be vital and Scotland will need to position itself accordingly in order to trade in nascent, but rapidly growing, natural capital markets.
The Scottish Government is committed to ensuring these markets are values-led and high-integrity*, as set out in our Interim Principles for Responsible Investment in Natural Capital. These markets, and the projects that supply them, will 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.
Delivered by NatureScot in collaboration with The Scottish Government and in partnership with the National Lottery Heritage Fund, FIRNS will provide grant support alongside a “gateway phase” of activities that engages with project developers and helps them develop an understanding of how to work with/in emerging environmental markets and how to attract investment. FIRNS will help selected projects to bridge the gap between the conceptual idea and the investment ready proposition capable of attracting private capital and finance.
FIRNS will support the development of natural capital markets in two broad ways. Firstly, by creating a pipeline of investible projects that is ready to meet demand from responsible buyers and investors in values-led, high-integrity natural capital-based markets. FIRNS grants will help pay for the costs of the development of business and governance models for nature-based projects seeking to attract buyers and investors.
Secondly, FIRNS will help in the development of supportive elements needed for the success of natural capital markets. FIRNS' grants in this case will pay towards the costs of exploring and developing natural capital market infrastructure such as codes, standards and aggregating mechanisms.
FIRNS will benefit market development, by instilling confidence amongst developers and investors through developing a track-record, creating new models of ‘business as usual’ by demonstrating what does and does not work and through the sharing of new knowledge and approaches that subsequent projects can adopt and adapt.
Minister for Environment and Land Reform Mairi McAllan said:
“The Scottish Government has already significantly increased public investment in nature restoration through, for example, our £65 million Nature Restoration Fund.
“But public investment can’t do it alone. The finance gap for nature in Scotland for the next decade has been estimated to be £20 billion - that’s why we are working to find ways to bridge this finance gap through leveraging responsible private finance.
“The Facility for Investment Ready Nature in Scotland programme will enable swifter, easier and scaled up development of nature-based investable projects across the country. It has the potential to grow natural capital markets that reach across rural, urban, terrestrial and marine settings, and to support a wide variety of natural assets and ecosystem services.”
NatureScot’s Director of Green Economy Robbie Kernahan said:
“Scotland’s nature is in crisis: its unique habitats and ecosystems will only continue providing the benefits to our wellbeing if we act now to value it and invest in it. The new Facility for Investment Ready Nature in Scotland is a vital opportunity to stimulate that investment and will help us halt nature loss – we must grasp it with both hands.”
Heritage Fund Director for Scotland Caroline Clark said:
“Thanks to money raised by National Lottery players, we are delighted to support this programme which will ensure more of Scotland’s natural capital can be unlocked for the benefit of the environment and communities.
“FIRNS offers an exciting opportunity to explore ways of diversifying income for Scotland’s nature sector and building skills, capacity and resilience for the communities and organisations who are caring for the future of our natural world in a time of immense change.”
*The Scottish Government’s Interim Principles for Responsible Investment in Natural Capital define values-led and high-integrity in terms of delivery of integrated land-use and genuine and meaningful public and community benefits through inclusive engagement and collaboration in projects that are ethical and values-led, demonstrate high environmental integrity and support diverse and productive land ownership.