Public funding streams that contribute to nature restoration will be designed in a way that they can be matched or blended with private finance or investment. - New ways of using available Peatland Action funding to leverage other sources of finance for peatland restoration will be tested from 2025/26. - New approaches to further increase the level of private investment in woodland creation are being trialled from 2024/25. - Options for blending agricultural support with other sources of finance will be explored as the new framework is developed from 2025.
Objective 5: Invest in nature
Priority Action 25. Establish a values-led, high-integrity market for responsible private investment in natural capital.
Public funding for nature restoration in Scotland is increasingly being designed to work alongside private finance, rather than operating in isolation. Scottish Government policy and programme documents indicate that work is underway to explore how existing funding streams can be used to “blend” or leverage additional private investment into nature restoration.
Within this approach, several specific areas are identified in published policy:
– Peatland ACTION funding is being tested in ways that could help attract additional finance for peatland restoration from 2025/26 onwards.
– New approaches to increasing private investment in woodland creation are being trialled from 2024/25.
– Options for blending agricultural support with other sources of finance are being explored as part of the development of a wider funding framework from 2025 onwards.
These actions are still in development and early testing stages. There is limited published evidence yet showing sustained or large-scale blended finance delivery in practice, or clear outcomes from these approaches.
Blending public and private finance is based on evidence that increasing total investment in nature restoration can help scale up activities such as peatland restoration, woodland creation, and habitat improvement. These actions are well supported as effective ways to improve biodiversity and climate resilience.
If successfully implemented, blended finance could increase the overall scale and pace of restoration work by combining public funding with additional private investment. However, current evidence shows these approaches are still in trial and development phases, and there is limited proof of sustained, system-wide ecological outcomes resulting from blended finance models in Scotland so far. Ecological benefits therefore remain potential rather than demonstrated at scale.
Scottish Government – Nature Restoration Fund
NatureScot – Peatland ACTION programme
Promote the natural capital market framework to foster responsible, values-led private investment in nature while delivering benefits to local communities. It will do this by providing guidance to investors, land managers, and other stakeholders, offering tools and resources to develop sustainable projects.
Publish a Biodiversity Investment Plan for Scotland by the end of 2024 that contains actions to: support a range of finance mechanisms; promote value for money; and develop biodiversity markets in Scotland.
Build on the experience of CivTech Challenge 8.6 with Credit Nature to explore development of new voluntary codes for nature restoration.
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