Scotland's rewilding revolution — can nature recovery and rural prosperity coexist?

How can investors balance the financial opportunities to be made from rewilding projects with the economic sustainability of rural communities? By Peter Ranscombe.

Scotland’s fight against climate change is reaching a tipping point. Investment is needed to plant the trees and restore the peatbogs that will absorb greenhouse gases such as carbon dioxide from the atmosphere and soak up the increase in unpredictable heavy rain to lessen flood risks.

But who’s going to pay for it? Politicians and environmentalists highlight the need for pension funds, insurers and other large institutions to invest in rewilding projects.

Yet there were no takers last year when investment was sought by Highlands Rewilding, a business that issued bonds in 2020 and 2021 to buy Bunloit Estate on the western shores of Loch Ness and Beldorney Estate in Aberdeenshire, to increase biodiversity and capture carbon. The company needed the investment to refinance part of a £12 million loan from the UK Infrastructure Bank, since rebranded as the National Wealth Fund, which it used to buy Tayvallich Estate in Mid-Argyll in 2023.

Instead, the company sold Beldorney earlier this year to Grant Gordon – part of the family that owns whisky giant William Grant & Sons, maker of Glenfiddich single malt and blends including Famous Grouse and Grant’s – and the new Deveron Wildland charity. More than half of Tayvallich has also been sold to its local community, including the Barrahormid Trust and the Tayvallich Initiative, with Highlands Rewilding continuing to manage the land.

“We are pushing the envelope,” points out Jeremy Leggett, Highlands Rewilding’s founder and chief executive. “We are a frontier player, we have licence from our shareholders to take a bit of a risk, and we went for it.

“We got close with a few pension funds, and I think we persuaded a number of ‘heads of nature investing’. They’ve all got ‘heads of nature investing’ – trouble is, they’re not doing any nature investing. They’re all looking at each other, waiting to see who goes first. Then your business plan comes before these institutions’ investment committees, which are stacked with conservative people who find it easier to say ‘no’.”

Back to basics for fundraising

Now, Jeremy has returned to the high-net-worth individuals, family offices and other supporters who pumped £11 million into Highlands Rewilding during two previous investment rounds in 2022 and 2023. He’s close to raising his target of £1.5 million for this year and is eyeing a further £6 million next year.

Selling individual farms and houses at Tayvallich to locals or people who want to return home to the area helps to fulfil another plank in Jeremy’s strategy by working in partnership with local communities. Highlands Rewilding’s ‘rural housing burdens’ clause – which means buyers must use the homes as their primary residence – was welcomed by the Tayvallich Initiative.

What needs to change to encourage pension funds and other institutions to invest in rewilding? “There’s a Catch-22 situation – we ask for £5 million but institutions only invest in chunks of £25 million,” Jeremy says. “It’s going to take a big institution to recognise it has a wider responsibility here – there’s no point in having a pension if you don’t have a viable planet to retire to.”

Regulation is also a factor. Jeremy hopes the Scottish Government will link planning permission for infrastructure projects to requirements to improve biodiversity, possibly as early as 2027. “There are big players saying to us, ‘We know we’re going to be required to do this, and we’re minded to jump before we’re pushed’ – so, watch this space.”

On October 29, Jeremy collected the Blue Planet Prize, one of the most prestigious environmental awards, for his work on nature recovery, and used a series of speeches to call for a change in narrative, with leaders focusing on reducing social inequalities through “the lower energy bills, more affordable homes and growing job numbers that would result in increasingly nature-based economies”, rather than “the language of environmental disaster”.

Benefits for local communities

James Nairne, who manages the Northwoods Rewilding Network – a collection of farms, crofts and community woodlands – for rewilding charity Scotland: The Big Picture (SBP), welcomes the Scottish Government’s plans for a voluntary Ecosystem Restoration Code but highlights the need for further statutory regulations to create a market for ‘nature credits’.

“Unless there’s a return on investment or some regulatory requirement for companies to participate, there’s a risk that the nature credit market will be stillborn,” he warns. “There needs to be a greater incentive for corporations to purchase nature credits, so that a functioning market becomes established.”

When it comes to benefits for local communities, James thinks natural capital and rewilding projects could learn from examples in the renewable energy sector, where communities have a direct stake in local wind turbines. In a similar way, local communities should receive a proportion of each nature credit sold from a landholding. “Meaningful community benefit needs to be at the heart of natural capital, and at the heart of all rewilding initiatives,” he adds.

“Individuals can get involved in rewilding at any scale – from a window box or an urban garden through to a croft or a farm – but clearly the best bang for buck for nature recovery can be achieved when rewilding operates at landscape scale. Scotland’s pattern of land ownership is among the most concentrated in Europe, so getting large landowners to embrace ecosystem-led nature restoration is critical to halting biodiversity loss and building climate resilience.”

Burness Paull became one of SBP’s ‘rewilding business partners’ in 2024. Through the partnership, lawyers from across the firm are providing pro bono legal advice to members of the Northwoods Rewilding Network.

Lindsay Wallace, partner and head of sustainability at Burness Paull, says that partnering with the charity was helping the firm to reduce its impact on the environment and fulfil part of its responsible business strategy. “We were encouraged that Scotland: The Big Picture works in partnership with other stakeholders and interest groups on environmental issues – to the benefit of all of those in Scotland, including our employees and clients,” she adds.