Scottish Nature Restoration Funding Deal Collapses Without MSPs' Knowledge
A funding agreement aimed at raising £100 million from private investors for urgent nature restoration in Scotland has collapsed, with the Scottish parliament not being informed about the failure. The Guardian has exclusively learned that Aberdeen, the investment firm, withdrew from a partnership with the agency NatureScot late last year, halting efforts to secure commercial and private funding for conservation projects.
Ministers Accused of Secrecy Over Collapse
Scottish government ministers did not disclose Aberdeen's withdrawal when Highlands Labour MSP Rhoda Grant tabled a question at Holyrood seeking an update on the nature investment partnership. Jim Fairlie, the Scottish National party agriculture minister, responded only that NatureScot "continues to engage with a range of investors" and that "no private finance has yet been directed through the partnership into on-the-ground projects."
Sources with direct knowledge revealed that Aberdeen pulled out by December last year due to concerns over insufficient returns on investments. In February, NatureScot briefed stakeholders about the withdrawal, but both NatureScot and Aberdeen refused to confirm or deny the move, citing civil service rules that prevent public bodies from commenting on undisclosed policies during election campaigns. Notably, NatureScot's webpage for the partnership still lists Aberdeen as a member.
Political Fallout and Calls for Transparency
Jackie Baillie, Scottish Labour's deputy leader, demanded an urgent explanation, stating, "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. Scotland deserves to know what went wrong and what the consequences will be for the important work of nature restoration." An SNP spokesperson did not deny Aberdeen's withdrawal or whether Fairlie was aware in March, arguing that Grant's question was "generic" and did not name Aberdeen. The spokesperson emphasized that the partnership remains important for delivering private investment into nature restoration.
History of Funding Failures and Model Criticisms
This collapse marks the second time NatureScot's attempts to attract private investors for nature restoration have failed. Initially unveiled in early 2023 by then Scottish Greens minister Lorna Slater, the programme aimed to generate up to £2 billion in private financing for planting native trees and restoring peatland. Slater signed a deal with Hampden & Co, Palladium, and Lombard Odier, but it soon fell apart amid scepticism from experts who noted that returns are too low, long-term, and uncertain for most investors.
NatureScot's model relies on private funders covering costs of planting new forests not subsidised publicly, paying landowners rent, and sharing profits from carbon credits once woodlands mature. Aberdeen stepped in with a more modest £100 million goal, but by September last year, only the UK government's national wealth fund had offered £50 million, which has since been withdrawn due to Aberdeen's exit.
Expert Analysis and Calls for Public Investment
Tom Gegg, a nature finance expert formerly with Palladium, highlighted weaknesses in relying on private financing, estimating a £6.6 billion gap between public funding and restoration costs by 2040. He argued that UK state-owned investment banks should take over, noting, "Growing trees is a very slow way to make money. [If] they invested instead in, say, a windfarm, then once the turbines are built revenues from electricity sales start to roll in fairly quickly."
Laurie Macfarlane, a codirector of Future Economy Scotland, expressed concern over the lack of transparency, stating, "While it's welcome that policymakers are finally waking up to reality, the lack of transparency surrounding this is deeply concerning. Restoring woodlands and peatlands is crucial to Scotland's net zero pathway, yet there is no credible plan for how targets will be delivered. It is time to face the facts: nature is a public good, and meeting targets will require coordinated public investment. We can't afford to waste any more time waiting for private finance that simply isn't going to materialise."
