Interim Principles for Responsible Investment in Natural Capital

The Scottish Government is committed to developing a values-led, high-integrity market for responsible investment in natural capital, that helps deliver policy goals for economic transformation, climate change and biodiversity, and that provides community benefits and supports a Just Transition.

The following principles set out in more detail our ambition for this developing market.

Investment that delivers integrated land use

• Investment and management decisions should demonstrate consideration of positive and negative impacts across  all four capitals (natural, social, economic, human).
• Carbon management [1] should be integrated with delivery of wider environmental, social and economic outcomes, such as biodiversity improvements, resilience to food supply and natural flood management.
• Investment and management decisions should recognise and respond to local circumstances, acknowledge the suitability of land for particular uses and seek to protect and enhance existing natural capital.

Investment that delivers public, private and community benefit

• Investment in and use of Scotland’s natural capital should create benefits that are shared between public, private and community interests, contributing to a just transition.
• Current investment and future increases in land and ecosystem services value should benefit local communities.
• Investment and management decisions should support Community Wealth Building by reinvesting value in local economies to their long-term benefit.

Investment that demonstrates engagement and collaboration

• Investors and land managers should engage with local communities in decisions about land and land use change, in line with the Scottish Government’s Guidance on Engaging Communities in Decisions Relating to Land.
• When acquiring new land, investors should seek early engagement with relevant local communities to inform future plans and identify opportunities to collaborate in delivering community benefit.
• Investors and land managers should collaborate openly with other landowners and public bodies to contribute to a coherent approach to delivering benefits.

Investment that is ethical and values-led

• Investors should meet the six UN principles for Responsible Investment
• Investment should comply with the values of Scottish Government as set out by our policies on Just Transition, Fair Work , Land Rights & Responsibilities and Global Capital Investment.

Investment that is of high environmental integrity

• Investment in offsetting should not be a replacement for emissions reductions, and should always be made in addition to having plans and demonstrable actions in place to reduce emissions as close to zero as possible, and as part of targets and transition plans aligned with the Paris Agreement.
• Investment in natural capital for carbon management should be both measurable and verifiable, such as through the government-backed Woodland Carbon Code and the Peatland Code.
• When considering investment or trades, stakeholders should seek professional advice and use established Codes and reputable brokers.
• Land owners considering the sale of carbon credits should consider their own current and future carbon management needs before doing so.
• Where rights to or control over carbon or other natural capital are transferred to a third party, this information should be made available in an open and transparent way such as through the UK Carbon Registry.

Investment that supports diverse and productive land ownership

• If seeking to secure carbon units or natural capital value, investors should consider whether ownership of land is necessary. Where possible they should consider opportunities for management agreements and collaboration/partnerships with communities that can deliver wider social and economic benefit.
• When acquiring and/or managing land, investors should have full regard to the Land Rights and Responsibilities Statement and the expectations for responsible practice set out in the Scottish Land Commission’s Land Rights and Responsibilities Protocols.
• Where there are leases or other forms of tenure in place, for example in agricultural tenancies or crofting tenure, investors should identify and engage relevant parties early in decision making and consider opportunities for shared benefit.