How does restoring over-grazed land back to wild meadow, or revitalising a largely ruined rainforest, turn into a profitable investment opportunity? The answer is not straightforward. 

For Dr Jeremy Leggett, who heads up Highlands Rewilding, much of the answer to the future profitability of large-scale rewilding schemes hinges on support from the Scottish and Westminster governments for projects that encourage biodiversity in areas that have been affected by poor land management. 

Government funding on a scale that will be attractive to investors is not yet a certainty, so this constitutes a risk. However, Leggett points out that whatever uncertainty currently exists, it has not stopped Highlands Rewilding from successfully completing a major crowd-funding exercise. The project, which originally had a fund-raising target of £500,000, has just closed with almost 800 individual investors raising approximately £1.18 million. 

The minimum investment for individuals to participate in the crowdfunding campaign was £50, which made it accessible for anyone with an interest in rewilding. This is a long-term investment and those participating become co-owners of the land. 

In addition, according to Leggett, Highlands Rewilding has been able to raise nearly £8 million of equity funding. He and his team are keen to encourage forward-looking institutions and pension funds to see rewilding projects as viable long-term investment opportunities. 

The success of these fund-raising efforts has allowed Highlands Rewilding to purchase the Tayvallich Estate. The aim here is to restore over-grazed lands and revitalise one of Scotland’s few remaining natural rainforests. 

This is the third significant estate that Leggett and his team have acquired. Their first project involved the Bunloit Estate, which was bought in February 2020. Next, the team took ownership of the Beldorney Estate, which has over-grazed pastures and coniferous plantations, along with some broadleaf woods along the River Deveron. 

“These two estates, along with the recently acquired Tayvallich estate, will be a powerhouse for Scottish nature recovery,” Leggett says. 

The hugely ambitious aim driving Highlands Rewilding as an enterprise is for the organisation to become a global leader in the restoration of ruined natural habitats worldwide. According to Leggett, some $20 billion worth of projects will need to be activated around the world in the next ten years. If this can be achieved it will have a major impact in the global struggle against climate change, he says. 

The fledgeling rewilding industry will be providing significant investment opportunities in the years ahead for both individual investors and institutions, he notes. These three projects represent what Leggett calls “a beacon of hope” for the Montreal Global Biodiversity Treaty, which was signed in December 2022 by more than 200 governments around the world.

He believes that the three Scottish projects, extended more widely, have the potential to revitalise whole swathes of the country while bringing jobs and prosperity to local communities. “Rewilding has the potential to help Scotland to achieve its ambitious net zero targets,” he says. 

Nick Gaskell, a sustainability analyst with investment managers abrdn, points out that the carbon market provides a reasonable way for investors in rewilding and other climate-positive projects to get a return. 

“Investors that focus on providing primary capital to finance nature-based projects that produce a positive climate impact should be able to make a return by selling verified credits associated with the project.” 

To make a return these credits would be sold in the voluntary carbon market and would eventually retire by the end-buyer of the credit, who will make an offset claim. This ability to make a return provides the economic incentive for the primary investor to get the climate-positive project underway.

Gaskell adds: “Importantly, the carbon reporting of this impact should be very clear. For example, the primary investor should be allowed to report their positive climate impact. However, once they have sold the carbon credit they cannot then net the emissions impact against their own emissions. This would result in double counting of the impact. 

“If an investor is purchasing secondary credits (carbon credits from a project that has already delivered a climate impact) our view is that a return cannot be made along with claiming a climate impact because in this case, the investor is effectively just a speculator. A positive climate claim can be made if the investor is purchasing a secondary credit and retiring the credit, but in this situation no return is made.”

Gaskell points out that abrdn looked at the potential benefits from the Far Ralia project in Inverness-shire. Far Ralia is a unique, landscape-scale habitat restoration project that combines both woodland creation and peatland restoration. The native woodland creation element of the project has been designed with minimum intervention in mind. This means that the woodland will not be cut down for at least 100 years.

“The results showed that the plans we have put in place would take the site from below the UK average on the biodiversity intactness index to over 90 per cent and close to the pristine natural state,” says Gaskell. “This is pretty powerful and shows that private finance can have a positive impact and a financial return – but it is a longer-term investment – because nature takes time.”