Along Scotland’s Atlantic coastline, fragments of a little known “temperate rainforest” cling to glens and sea lochs, home to lichens, bryophytes, and mosses.

Only about 30,000 hectares of core rainforest remain, scattered along the west coast, and they face mounting pressure from fragmentation, invasive rhododendron and heavy deer grazing. A new partnership led by Argyll and the Isles Coast and Countryside Trust (ACT) on behalf of the Alliance for Scotland’s Rainforest (ASR) set out to test a simple but disruptive question: what role can private capital play in helping to restore and reconnect these valuable yet threatened woodlands at scale?

Backed by the Scottish Government and National Lottery Heritage Fund through the Facility for Investment Ready Nature in Scotland (FIRNS), the project convened a working group with Palladium, Sylvestris Land Management and advisers at Saffery to craft a high integrity pathway for investment.

Armed with a set of new ASR Project Standards and a bespoke Integrity Charter to protect against greenwashing, the team both designed a robust governance structure and explored a business model that could unlock private finance in a market where public funds leave an estimated £500 million funding gap for nature restoration and biodiversity projects in Scotland between now and 2045.

The habitat they aim to protect is as rare as it is beautiful: humid woods where Atlantic mists and mild winters create a hyperoceanic microclimate.
That moisture fuels the living patina of “fuzzy” mosses and lichens that make Scotland’s rainforest as biodiverse and perhaps even rarer than many tropical counterparts. Yet decades of fragmentation and overgrazing have damaged much of the area, rhododendron ponticum smothers a significant extent of remaining sites, while a growing deer population suppresses growth unless managed collaboratively across landholdings.

“We were fortunate to visit the area and meet with some of the key local organisations working to protect Scottish rainforest,” says project developer Ashley Gillan. “It’s one of the most magical experiences you can have, the air is literally filled with life,” she recalls. “Every wall, tree and stone is coated in it. It’s a bit like the Amazon, only in Scotland, and without the mosquitos.”
Unlocking finance at scale to restore this incredible habitat, however, is rather challenging, she adds.

Functioning UK market mechanisms such as the Woodland Carbon Code reward the creation of new habitats and measurable sequestration of carbon, which generates a source of income for landowners. However, safeguarding biodiversity in existing habitats largely lacks a private funding mechanism.
This novel project tested whether it would be possible to secure sufficient funding via the sale of high integrity woodland carbon credits through the UK’s voluntary carbon removals market to expand native woodland and tackle habitat fragmentation, simultaneously fund the restoration and protection of existing rainforest, and provide meaningful contributions to both landowners and the local community.

What’s innovative about it, says Gillan, is how they’re using carbon credits. “The sales generated by planting new woodland won’t just cover the cost of planting it, but will also enable the restoration and protection of additional existing rainforest habitats, plus fair landowner and community payments.”

It’s a tall order, but as they found, not an impossible one.

Using a yearlong feasibility process that included mapping, financial modelling, and multistakeholder design, the project team tested a scalable model that aggregates landholdings to deliver three critical aspects of rainforest restoration and protection: rhododendron population control, coordinated deer management, and long-term sustainable land stewardship.

"While we could demonstrate it is possible to design a robust and realistic governance structure for this complex multi-stakeholder design, making the financial model work was the really challenging element.”

“The reality is that such an ambitious project results in the need to sell high-priced credits, requiring forward thinking buyers and patient investors,” Gillan says. The project advanced a model far enough to clearly understand the ballpark cost for delivering such a project, and the delivery partners are now using this to connect with such prospective funding partners. “Before this, no one knew if a project of this type was feasible,” says Gillan. “Now there’s a blueprint of what it costs, the minimum viable scale, and the offer we can take to landowners and corporates.”

What’s next? Momentum is building, but Gillan is candid. “What this project really needs is one high integrity anchor buyer to demonstrate their commitment to purchasing rainforest credits at scale, and one or more brave landowners willing to go the distance first. Demonstrate it once, and others will hopefully begin to follow.”

In a nature market still finding its feet, that early proof could be the difference between a rare habitat remaining fragmented, or stitching itself back into a living, connected rainforest along Scotland’s shores.