Natural Capital Market Framework

Footnotes

1 Natural capital is the renewable and non-renewable stocks of natural assets, including geology, soil, air, water and plants and animals that combine to yield a flow of benefits to people. Adopting a natural capital approach enables us to understand the role of our natural environment, alongside its intrinsic value, as an asset that underpins our economy and society.

2 Publication of Scotland Natural Capital Accounts: 2023 - gov.scot (www.gov.scot)

3 Home - UK Woodland Carbon Code

4 Peatland Code | IUCN UK Peatland Programme (iucn-uk-peatlandprogramme.org)

5 Private Investment Natural Capital: PINC@gov.scot

6 Investor Panel: Mobilising international capital to finance the transition to Net Zero

7 Investor Panel - Scottish Government Response to Investor Panel Recommendations (www.gov.scot)

8 Green industrial strategy - gov.scot (www.gov.scot)

9 Climate change: Scottish National Adaptation Plan 2024-2029 - gov.scot (www.gov.scot)

10 Supporting woodland creation in Scotland with Gresham House Forestry Fund I Scottish National Investment Bank (thebank.scot)

11 The main ‘currency’ of carbon markets is carbon units, whereby one carbon unit corresponds to one tonne of CO2 equivalent. Woodland Carbon Units (WCU) and Peatland Carbon Units (PCU) are issued at verification, and therefore the associated carbon is guaranteed to have been sequestered or emissions prevented. When WCUs and PCUs are “retired”, the owner of these units can state that they have offset the corresponding mass of CO2 equivalent. Landowners can also retire their own units, without selling (assigning) them to another party, and therefore offset their own emissions directly (insetting). Businesses can only use PC and WCC credits to offset their land based emissions from activities within the UK

12 Sources: IUCN (August 2024) and WCC interim summary statistics (July 2024). Further information regarding PC and WCC projects is publicly available on the UK Land Carbon Registry Note: the time periods of the sources above are very similar, but not identical. This will have a minor impact on the comparison.

13 Pending Issuance Units (PIUs) are issued at project validation. Carbon has not been sequestered or emissions prevented at this point, and PIUs when sold (assigned) represent an advance purchase of a WCU or PCU. PIUs cannot be included in a company’s Net Greenhouse Gas Emissions Report.

14 Additionality is a fundamental requirement of any high-integrity natural capital market. Additionality is change that would not have occurred in the absence of management actions, measured relative to the baseline.

15 For financial additionality tests: The financial feasibility test for the PC states that projects shall have a maximum level of non-carbon income of 85% of the project’s restoration and management costs over the project duration. This non-carbon income could be public grant funding or other private income. The remaining minimum 15% shall come from carbon finance The WCC has an ‘investment test’ to demonstrate that, over the project duration, without carbon finance, woodland creation is either: a) not the most economically or financially attractive option for that area of land b) not economically or financially viable on that land at all

16 Peatland ACTION | NatureScot

17 Mansion House 2023 - GOV.UK (www.gov.uk)

18 Biodiversity: draft planning guidance - gov.scot (www.gov.scot)

19 ISO - Certification

20 ICROA | Accrediting Best Practice in Carbon Offsetting

21 The Core Carbon Principles | ICVCM

22 The Taskforce on Nature-related Financial Disclosures (tnfd.global)

23 Home - CreditNature

24 Leven, Scotland - Landscape Enterprise Networks

25 #FIRNS Edinburgh Garden City Programme – Water of Leith Catchment | The National Lottery Heritage Fund

26240514-River-Catchment-Restoration-Project-Overview.pdf (fms.scot)

27 The Eddleston Water Project – Tweed Forum

28 Climate change: Scottish National Adaptation Plan 2024-2029 - gov.scot (www.gov.scot)

29 Climate Ready Clyde | Building a more resilient, prosperous and fairer Glasgow City Region

30 Home - Highland Adapts

31 Nature Investment Partnership: FAQs | NatureScot

32 Wild Heart Expansion Project – Tweed Forum

33 Principles for Responsible Investment in Natural Capital - gov.scot (www.gov.scot)

34 Management of land for carbon includes increasing carbon sequestration (trees, hedgerows, saltmarshes) and reduction of emissions, such as peatland restoration or improved soil management.

35 Forestry and Land Management (Scotland) Act 2018 (legislation.gov.uk)

36 UK Forestry Standard.

37 Scotland's Forestry Strategy 2019–2029 - gov.scot (www.gov.scot)

38 Scottish Land Rights and Responsibilities Statement 2022 - gov.scot (www.gov.scot)

39 Scottish Forestry - Integrating Trees Network

40 Cairngorms Connect | Home

41 Habitat Map of Scotland | Scotland's environment web

42 Peat restoration planning tool - Cairngorms National Park Authority

43 Land Reform (Scotland) Bill | Scottish Parliament Website

44 Developing a Landscape Scale Natural Capital Tool for Scotland | NatureScot

45 Nature Networks Tool | NatureScot

46 Green Finance Initiative - The Flow Country The Flow Country

47 Engaging communities in decisions relating to land - Land reform - gov.scot (www.gov.scot)

48 Forestry and Land Management (Scotland) Act 2018 (legislation.gov.uk)

49 The UK Forestry Standard (publishing.service.gov.uk)

50 Nature Markets - Overarching Principles and Framework (bsigroup.com)

51 Guidance on Engaging Communities in Decisions Relating to Land (www.gov.scot)

52 Delivering Community Benefits from Land (landcommission.gov.scot)

53 Scottish Land Rights and Responsibilities Statement 2022 - gov.scot (www.gov.scot)

54 Community Climate Adaptation Routemap - Adaptation Scotland

55 Dreel Burn project

56 Delivering Community Benefits from Land (landcommission.gov.scot)

57 Responsible Natural Capital and Carbon Management - Good Practice - Our work - Scottish Land Commission

58 Contact us - Useful links - Footer - Scottish Land Commission

59 Holistic Plug-in' Community Benefits Standard for UK Nature Credits. (natcert.earth)

60 The Solway Coast and Marine Project (SCAMP) Launches Community Collaborations in Stranraer, Annan and Wigtown - Solway Firth Partnership

61 Scottish Natural Capital Accounts: 2023 - gov.scot (www.gov.scot)

62 Assessing the cumulative and cross-sector economic benefits of investment in natural capital in Scotland (www.gov.scot)

63 Principles for Responsible Investment - PDF file (unpri.org)

64 Just transition - Climate change - gov.scot (www.gov.scot)

65 Fair Work First Criteria: What It Means In Practice - Fair Work First guidance - gov.scot (www.gov.scot)

66 Scottish Land Rights and Responsibilities Statement 2022 - gov.scot (www.gov.scot)

67 Nature Markets - Overarching Principles and Framework (bsigroup.com)

68 Donate - Scottish Marine Environmental Enhancement Fund (smeef.scot)

69 Nature Markets - Overarching Principles and Framework (bsigroup.com)

70 Case study: High-Integrity Marine Natural Capital Markets (thecrownestate.co.uk)

71 The Model CHP for the Scottish Government and Associated Public Authorities Sector in Scotland - Word Template (landcommission.gov.scot)

72 Responsible Natural Capital and Carbon Management - Good Practice - Our work - Scottish Land Commission

73 Land Reform (Scotland) Bill | Scottish Parliament Website

74 2. Register your project - UK Woodland Carbon Code

75 Agricultural Reform Route Map (ruralpayments.org)

76 Current examples of advice provided can be found online: Peatland Advice

77 Forest Carbon | FIRNS project | Unlocking peatland restoration on crofting and common grazing land, part 2