Investing in nature: a plan to support investment in biodiversity and climate adaptation in Scotland

Actions

Delivery of the actions contained in this Plan will provide tools to guide investment in biodiversity towards the aims of the SBS. The timescale for this plan matches the Delivery Plan 2024-2030:

Map the opportunity

• We will develop a nature investment prospectus that highlights the larger-scale opportunities for different sources of finance to enhance biodiversity.

Creating capacity

• We aim to address the nature finance skills gap and to create more capacity across sectors to enable access and use of a range of funding and finance sources.

Lead delivery

• We will use public sector skills and land to speed up delivery and demonstrate good practice.

Market Mechanisms

• We will develop an Ecosystem Restoration Code to help scale up responsible private investment in nature.

Act now

• We will facilitate strategic investment opportunities and mechanisms that enable the private sector to deliver immediate and future biodiversity commitments.

Mapping the Opportunity

Scottish Government will work with NatureScot on the development of a nature investment prospectus that highlights the larger-scale opportunities for different sources of finance to enhance biodiversity. In Scotland, there is currently no public-facing overview of the range of suitable biodiversity projects that could be used to promote SBS priorities such as nature networks, OECMs^[6], or peatland restoration projects.

Clearly presented spatial information about a range of biodiversity projects can help make the opportunities for nature investment visible and can guide decisions regarding the use of different types of funding and finance.

In 2025, NatureScot will produce a prospectus of the known landscape scale nature restoration projects in Scotland, informing investors of Scotland’s priority landscape-scale nature restoration projects. The work will also help project developers and agencies identify where there are geographic gaps in nature restoration activity and to generate new projects and partnerships to fill those gaps.

NatureScot will lead on this project, with the support of Scottish Government officials and have already started to build a dataset of projects. The initial phase of work will scope the existing investment landscape and identify milestones and a timeline for deliverables. The second phase will identify a pipeline for longer term investment out to 2045. NatureScot will engage with stakeholders in early 2025 once the dataset and scoping phase are complete.

Creating Capacity

Our National Strategy for Economic Transformation (NSET) focuses on the economic opportunity of restoring nature and investing in our natural capital and land-based economy. To increase the pace and scale of financing nature restoration we need expertise in nature finance as well as implementation and delivery of projects.

The creation of a nature finance skills development programme will result in a more skilled workforce that has the capacity and knowledge to deliver biodiversity projects. This is important for monitoring, reporting and verifying biodiversity restoration linked to investment, which will ensure outcomes are of a high environmental integrity. A report by the New Economic Foundation for the Scottish Government’s Environment Strategy recommended developing green finance skills options to support the economic transformation to net zero and a nature-positive economy.

Scottish Government officials will lead on this project, commencing in 2025, by initially assessing the nature finance skills gap across public and third sectors; followed by identifying a programme and delivery partners for nature finance skills in Scotland.

Leading Delivery

NatureScot are working with officials from Forestry and Land Scotland (FLS) on a project to strengthen the role of publicly owned land in advancing Scotland’s land use policy goals, particularly in addressing climate change and biodiversity. Terrestrial public land, including the Scottish Crown Estate, makes up 11% of Scotland and has an important role to play. This project aims to develop a framework of policies, financial mechanisms, measurement, data, and governance that will collectively accelerate land use policy delivery at the pace and scale needed to significantly contribute to Scotland's climate change and biodiversity targets. A key focus will be on exploring financial mechanisms to support nature-based projects on public land, including opportunities for responsible private investment.

SNAP3 identifies the need to prioritise landscape scale approaches, often centred around a catchment, and to target nature based solutions where they can help reduce climate risks, such as flooding, water scarcity and deteriorating water quality.

NatureScot has recently commissioned the James Hutton Institute and SNIFFER to identify priorities for nature based catchment restoration. Reporting in March 2025 this work will help identify opportunities for businesses and infrastructure providers to invest in catchment restoration, alongside existing public funding streams. Throughout 2025/26 NatureScot will work with other agencies, and in particular SEPA and Scottish Water to prioritise catchments and attract private investment to those with the highest risks to climate change.

Scottish Government officials will lead on the development of this and work with its partners NatureScot and Forestry Land Scotland. The first phase of work will involve a scoping exercise of possible innovative financing mechanisms on public land by end of March 2025. Future work will demonstrate collaborative nature restoration across clusters of public land, working with neighbouring NGO’s, private land holdings, community land holdings and other land tenures.

Market Mechanisms

Currently, the Woodland Carbon Code and Peatland Code support high-integrity private investment in woodland creation and peatland restoration, respectively. However, many other habitats across Scotland lack similar market mechanisms, limiting opportunities for investment in biodiversity and ecosystem restoration.

To address this gap, the Scottish Government will explore the development of an Ecosystem Restoration Code. This code would ensure the high-integrity governance, measurement, reporting, and verification required to help channel responsible private investment into projects that enhance the structure, function, and resilience of ecosystems. By 2026 the Scottish Government aims to have fully tested options for a new ecosystem restoration code, including its objectives, ownership and governance structure, approach to monitoring, reporting and verification, and the process for nature credit issuance. The new code would be co-developed with stakeholders. The work will be informed by the outputs of the recently completed CivTech contract with CreditNature.

Our work to improve market mechanisms aligns with broader market trends, such as the growing influence of initiatives like the Taskforce on Nature-related Financial Disclosures (TNFD). As UK companies increasingly integrate nature-based solutions into their financial disclosure, transition planning, and supply chain management, the demand for voluntary biodiversity and nature markets is expected to rise. An Ecosystem Restoration Code would position Scotland as a leader in ensuring responsible private investment supports sustainable and high-integrity ecosystem restoration projects.

Act Now

Public sector organisations, by virtue of the biodiversity duty, are required to take account of biodiversity in exercising their functions. Some industries also invest in nature as a condition of doing business. For example, some private energy providers deliver biodiversity commitments as part of their corporate responsibility. There is increasing demand for identifying opportunities for high growth sectors to find suitable biodiversity investment opportunities. Scotland’s Private Investment in Natural Capital (PINC) programme will support industries with their investments into natural capital and will work with national and local partners, across both the private and public sector to develop sustainable, efficient processes and connect available funds with a pipeline of high integrity natural capital projects. We will do this by facilitating a process with public sector partners and the energy sector to maximise outcomes and investment into biodiversity to ensure the just transition to net zero benefits nature and communities.

Scottish Government officials will lead on the development of this project, with the first phase starting in 2025 involving working with private energy providers and public sector partners to identify the opportunities for investment.

The SBS identifies a range of conditions for success which need to be in place in order to achieve the Strategic Vision and Outcomes. Those conditions include ensuring sufficient investment, to support delivery of the Actions set out in the Delivery Plan. We will continue to develop the innovative finance mechanisms we have already put in place.

Through the Facility for Investment Ready Nature In Scotland (FIRNS), NatureScot and the National Lottery Heritage Fund have been funding a wide range of innovative finance mechanisms to bring new finance to nature restoration. During 2025/26 NatureScot will continue working with the FIRNS projects that have built a viable route to market to deliver new investment in nature restoration. For example, they will continue to support the first Landscape Enterprise Network in Scotland being developed around Loch Leven in Perth and Kinross, and seek to replicate this approach in other locations once the concept has been proven.