Collapse of Funding Deal for Scottish Nature Restoration

A significant funding initiative aimed at raising £100 million for nature restoration projects in Scotland has collapsed without notification to the Scottish Parliament. The investment firm Aberdeen withdrew from its partnership with NatureScot late last year, a decision that was not disclosed to lawmakers when Labour MSP Rhoda Grant inquired about the status of the nature investment partnership. Scottish National Party (SNP) Agriculture Minister Jim Fairlie stated that NatureScot was still engaging with various investors but did not confirm the withdrawal of Aberdeen. Sources indicate that Aberdeen's exit was due to concerns over insufficient returns on investment, which became apparent by December 2025.

The Guardian

Initially unveiled in early 2023 by former Scottish Greens minister Lorna Slater, the nature investment partnership aimed to generate up to £2 billion in private financing for extensive environmental projects, including the planting of millions of native trees and the restoration of degraded peatlands. The partnership was expected to fund 185,000 hectares (457,000 acres) of new woodland, potentially sequestering approximately 28 million tonnes of CO2 over 30 years. However, skepticism from conservation and finance experts regarding the viability of such investments led to the early collapse of the original funding arrangements with Hampden & Co, Palladium, and Lombard Odier.

The Guardian

Experts have pointed out that the funding model, which relies heavily on private financing, is fundamentally flawed. Many pension funds and banks are reluctant to invest in nature recovery projects due to the low, long-term, and uncertain returns. The UK government’s national wealth fund had previously offered £50 million in funding but has since withdrawn its offer following Aberdeen's exit. Tom Gegg, a nature finance expert, highlighted the disparity between available public funding and the projected costs of nature restoration in Scotland, estimating a gap of approximately £6.6 billion by 2040. He suggested that state-owned investment banks should assume responsibility for funding these essential projects.

The Guardian

The lack of transparency surrounding the collapse of the funding deal has drawn criticism from various quarters. Jackie Baillie, Scottish Labour’s deputy leader, has called for an urgent explanation from the government, suggesting that the SNP may have concealed the project's failure to avoid political embarrassment ahead of upcoming elections. Laurie Macfarlane, co-director of Future Economy Scotland, emphasized the need for coordinated public investment in nature restoration, stating, “Restoring woodlands and peatlands is crucial to Scotland’s net zero pathway, yet there is no credible plan for how targets will be delivered.”

The Guardian

• “It looks a lot like Jim Fairlie and the SNP kept the collapse of this project under wraps to spare their government embarrassment ahead of an election,” — Jackie Baillie, Deputy Leader, Scottish Labour

The Guardian

• “Growing trees is a very slow way to make money.” — Tom Gegg, Nature Finance Expert

The Guardian

• “It is time to face the facts: nature is a public good, and meeting targets will require coordinated public investment.” — Laurie Macfarlane, Co-director, Future Economy Scotland

The Guardian

The situation underscores the urgent need for a reassessment of funding strategies for nature restoration in Scotland, as reliance on private investment appears increasingly untenable.

The Guardian