Announced at last week’s Nature Finance UK Conference, global investment firm abrdn is joining the Nature Investment Partnership, a groundbreaking initiative to unlock the investment needed to restore Scotland’s natural landscapes. The partnership, launched last year and including Palladium, NatureScot: Scotland’s Nature Agency, and private bank Hampden & Co., is designed to mobilise responsible private capital to help fund an ambitious suite of nature restoration and carbon removal projects.

Local Impact at Scale

One of the most compelling aspects of the partnership is its landscape-scale approach.

Rather than working with isolated sites spread across Scotland, the partnership is taking a place-based approach: setting up clusters of interlinked projects within a small set of key landscapes. The Wild Heart Expansion Project, for instance, focuses on creating and expanding native woodland across neighbouring landholdings in the Ettrick and Tweed valleys.

“This isn’t just about restoring nature on individual parcels of land,” explains Andrew Sutherland, Palladium’s Head of Natural Capital. “It’s about envisioning what these landscapes could look like 25, 50, even 100 years from now and making sure we’re investing in ways that genuinely benefit the local ecosystems and communities.” By working with local land managers, communities and business owners, the partnership will ensure that projects are tailored to the needs and aspirations of each region.

The Nature Investment Partnership also plans to create economic opportunities within these communities. According to Palladium, this local-first approach prioritises working with local contractors that can supply the materials and services that the partnership will need over the coming decades – with the goal of creating new, well paid rural jobs in the nature sector.

“When you focus your work at a landscape level, you create a more predictable pipeline of work in that area, and that means stable, well-paying jobs for local people,” says Sutherland.

NatureScot is helping the Nature Investment Partnership to focus on Scottish landscapes that offer high potential for environmental restoration, and where the agency believes this funding model could work best. NatureScot is also working closely with other organisations that are applying different business models, and is keen to establish additional partnerships to test other approaches.

As the partnership grows, Sutherland envisions that Scotland will see a shift toward nature-based solutions that offer sustainable alternatives to traditional land management options – such as sporting and livestock grazing. abrdn’s involvement strengthens the partnership’s financial base, bringing in the resources needed to pursue these extensive, multi-decade projects.

Integrity in Project Design

As the project development lead, Palladium will ensure that each project meets high standards, from biodiversity uplift to local impact assessments. Meanwhile, NatureScot provides oversight on quality, ensuring that all activities align with Scottish Minister’s guidelines for responsible investment into natural capital.

“NatureScot’s oversight brings an essential layer of accountability,” Sutherland explains. “They make sure our work meets their high standards for what good looks like in nature restoration, which ultimately benefits the land, the environment, and the communities that depend on both.” This will include making sure that any ecosystem services generated by the partnership - such as carbon credits – are only sold to firms that have set a clear plan for reaching Net Zero by 2050, and that are cutting their own greenhouse gas emissions before funding carbon removal projects elsewhere.

The partnership’s emphasis on collaboration with existing land managers, rather than buying land, also sets it apart from traditional investment models.

“We aren’t looking to buy land or push up rural land prices” says Sutherland, “we want to channel this investment into productive rural activities: planting trees and restoring the peatland”.

Patient Capital for Long Term Restoration Projects

A distinctive feature of the Nature Investment Partnership is its focus on ‘patient capital’: long-term investment that acknowledges the extended timeframes needed to restore peatlands and grow native woodlands in Scotland.

“For these projects to succeed, we need investors who aren’t in a rush,” says Sutherland. “The trees will take time to grow, and if someone wants to be in and out within a decade, this isn’t the right fit.”

abrdn’s commitment to realistic returns aligns well with this approach. “abrdn has learned that this is a long-term game,” he adds. “They’re not here for quick profits; they’re here for genuine, responsible impact, and they’re on board with the slower returns that come from true landscape-level conservation efforts”.

“Targeting single digit returns also means that we not making any compromises on quality. We want to set up really exciting, long-lasting woodland and peatland restoration projects”.

The partnership emphasises transparency with investors, providing a more realistic picture of returns and timelines. “We think anyone promising double-digit returns in this sector is probably overselling,” Sutherland claims. “We’re committed to being honest about what this kind of work entails.”

Visit the Nature Investment Partnership website for more information or contact info@thepalladiumgroup.com