Green land investment in rural Scotland: social and economic impacts

Executive Summary

Introduction

This report details the main findings of qualitative research commissioned by the Scottish Government to understand the range of potential social and economic impacts from green land investment in rural Scotland. The research has involved six case studies of green land investment across rural Scotland. It has sought to understand the lived experience, as well as the perceptions, hopes and fears, of those who live near to or work on land where green land investment activities are occurring. It has also gathered insights from the green land investor-owners, landowner representatives, and land managers, regarding their motivations and land use plans.

This research has sought to respond to the following questions:

1. What are the different types of “green” land investment activities and the differing motivations of landowners?

2. What are the social and economic impacts of green land investment?

3. How does green land investment affect different groups within communities, e.g. the impact on housing or access to land for housing and land prices, those in local employment, local businesses owners, those in communities and businesses reliant on tourism that could be affected by change of land use in the vicinity, those working on the land including tenanted farmers, small landholdings and rented crofts, tenants in tied housing on rural estates, owner/occupier farmers?

4. What are the potential benefits and / or negative impacts of these types of green land investment activities, for rural communities located close to land under new private ownership?

5. To what extent do private-sector interests support or conflict with the needs of rural communities and their interests, e.g. the responsibilities of rural land ownership, from land rights to agricultural tenancies?

6. What are the wider and long-term implications of changes in rural land use and ownership for rural communities, as a result of new forms of green land investment?

This research addresses the lack of evidence and understanding regarding the wider and long-term implications of green land investment on rural communities and economies in Scotland.

The research was undertaken in three main phases:

(1) A literature and evidence review to develop and verify key concepts and definitions such as ‘green land investment’ and ‘rewilding’.

(2) The identification and selection of six case studies of landholdings where green land investment activities are occurring, and data collection through interviews and workshops with community representatives, farmers/crofters, local business owners, green land investor-owners, landowner representatives, and land managers. Across the six case studies 54 interviews and six workshops with 96 participants were conducted.

(3) Thematic analysis has built understanding of current and likely future social and economic impacts of green land investment.

As this research has utilised a largely qualitative approach, its focus has been on capturing people’s perceptions, opinions, and experiences. This evidence provides valuable insights that help us to understand the range of perceived, potential, and actual social and economic impacts relating to green land investment.

Literature and Evidence Review

There has been a recent increase in land purchases and management by companies seeking to benefit from natural capital investment. Natural capital refers to the habitats and resources that provide social, economic, and environmental benefits to people (Scottish Government, 2021b), and it is the focus of new markets, such as for carbon and biodiversity credits. This changing pattern of landownership and land management has implications for Scottish Government goals of landownership diversification, just transition, net zero, and community wealth building.

A review of academic and grey literature provides a definition of green land investments and the motivations of green land investor-owners. Investor-owner motivations fall along a spectrum rather than into discrete categories. They include: reputational impacts, financial returns, operational impacts, environmental and/or social impacts, and personal drivers. The resulting definition of green land investments used in this report is:

The purchase of, or investment in (directly through shareholding or changing focus of owner investment, or indirectly through intermediary companies) land to undertake nature restoration, regenerative land management or approaches that maintain or enhance natural capital, and/or sequester carbon emissions, differentiated from traditional ownership by the green motivations as a driver rather than a secondary outcome.

Research findings

What are the social and economic impacts of green land investment? What are the potential benefits and / or negative impacts of these types of green land investment activities, for rural communities located close to land under new private ownership?

• Both positive and negative impacts were perceived and realised, dependent on the motivations and activities of investor-owners. This demonstrates the fine balance of potential impacts relating to green land investment activities and the relative importance of how such activities are undertaken (and the agency of local communities), rather than who the green land owner-investor may be.
• Significant benefits included: increased accessibility, transparency, and community engagement with estate activities; investor-owner support for community initiatives and housing provision; and increased tourism activity and employment.
• Critical to the just transition was investor-owner support for education and training opportunities, for example in peatland restoration and forestry.
• Negative impacts included: loss of employment and effects on local service provision (e.g. shops, schools, secondary agricultural services, etc.); decrease of housing availability due to conversion and increased market prices; a perceived increase in risks such as fire due to land management changes; and a lack of community involvement in decision-making.

How does green land investment affect different groups within communities?

• Communities of interest, including local businesses, estate employees, gamekeepers, farmers, and recreational land users are significantly impacted, both positively and negatively, by green land investor-owners.
• Green land investment activities mean that traditional rural jobs are shifting, with implications for the just transition. Across several of the case studies estate employees have been made redundant or reassigned to new roles. Agricultural production and numbers of tenants have declined. These groups expressed a need for long-term stability, for example through security of tenure or support for livelihoods.

Experiences of, opportunities for, and barriers to community-landowner engagement in the context of green land investment

• The type and extent of community engagement varied across case studies, with contrasting community perceptions and landowner attitudes. Our findings demonstrate a spectrum of community-landowner engagement which ranges from perceived good practice to perceived poor practice.
• Good practice includes frequent engagement with communities by green land investor-owners, demonstrable responses to community input by landowners, and the building or existence of personal relationships with stakeholders in the community. Poor practice was generally defined by a lack of community engagement or consultation.
• Across case studies, potential improvements to existing engagement were identified by both community members and green land investor-owners and landowner representatives.
• Insufficient community engagement can reinforce power imbalances between communities and landowners, resulting in community members feeling that they lack agency.

To what extent do private-sector interests support or conflict with the needs of rural communities and their interests, e.g. the responsibilities of rural land ownership, from land rights to agricultural tenancies? What are the wider and long-term implications of changes in rural land use and ownership for rural communities, as a result of new forms of green land investment?

• The qualitative data collected that responds to this research question is based on discussions with participants regarding their hopes and visions for the future. Due to the short-term nature of the research project, it was not possible to verify the actual wider and long-term implications of green land investment activities.
• Community members hoped that green land investment would support sustainable, thriving communities, increase biodiversity, and respond to the climate emergency. In a positive future, recreational access would be maintained and enhanced. Community engagement would increase and include working with landowners.
• Community members feared that investor-owners would not achieve their goals because of perceived financial uncertainty and lack of management experience by investor-owners and/or their representatives. The uncertainty about future management plans created social anxiety among many community members. They also feared that future employment options would be limited, and that there would be limited social benefits from investor-owners’ focus on green activities where profit is a primary concern.

Conclusions

This research illustrates that there is a diversity of green land investor-owner activities and motivations in rural Scotland, including: environmental, financial, social, reputational, operational, and personal. These fall along a spectrum and investor-owners often have multiple and inter-connected motivations. Community members and investor-owners perceived the priority of environmental and financial motivations differently, and some community members felt uninformed about landowner goals.

The social and economic benefits and negative impacts of green land investment are dependent on the case study’s investor-owner. They differ across case studies and investment may impact positively or negatively on the same people, for example, recreational access (increasing or decreasing it) or employment (job provision or loss). Farmers and estate employees are the most affected, for example experiencing employment and livelihood impacts, considered positive for some, and negative for others.

In some case studies, green land investor-owners demonstrated good practice by engaging with communities and responding to their views. However, a critical negative impact across the case studies was the perceived lack of community involvement in land-use decision-making. Participants suggested methods for positive community engagement, including greater transparency of land use and land management plans, with opportunities for community feedback^[1].

Community member participants indicated that there is potential for thriving rural communities if green land investor-owner goals are achieved, but failure would have knock-on impacts for community sustainability and the local environment.

The research findings indicated the following recommendations:

Policy makers should:

1. Consider greater regulation of the natural capital market and to remove barriers to participation by tenant farmers and crofters.

2. Consider ensuring that a proportion of green land investment profits are shared with communities of place that are affected by investment activities, in particular, establishing minimum community benefit payments by windfarm developers.

3. Consider how best to support farming and gamekeeping communities in the just transition.

Green land investors/owners should:

1. Ensure transparency and accountability in land management plans and ownership objectives, and share these with communities.

2. Ensure that landownership, land management and land use changes consider the long-term consequences to rural community sustainability and the just transition.

3. Create opportunities to include community voices on decision-making boards or management committees, and ensure adherence to good practice community engagement^[2].

Rural communities should:

1. Seek opportunities and be supported to engage and work with landowners (both new green land investor-owners, and existing private and public landowners), for example, through inviting investor-owners to regular community meetings.

2. Support landowners to overcome perceived barriers regarding communication and community representation.

Further social research, particularly focused on tracking changes over time using longitudinal techniques, may help to understand the long-term impacts of green land investment in rural Scotland.