The Scottish Government’s target of planting 36 million trees by 2030 and commitment to funding for peatland restoration, has initiated a growing trend among businesses to invest in Scotland’s natural capital.
In a climate where investors are increasingly wary of the environmental impact of businesses and governments are looking at climate change-related regulation in all sectors, it pays to be proactive in looking for carbon-neutralising solutions.
New approaches to land use
It would seem that previously less-favoured hillside, unproductive and otherwise remote and rural land is an increasingly popular asset for companies and institutional investors looking to offset their carbon footprint. This otherwise ‘difficult’ terrain can be the ideal location for planting native woodland and contributing visibly towards Scotland’s net zero targets.
As well as providing a crucial form of land-based carbon capture essential to improving the environment, responsible forestry can positively impact the survival of Scotland’s native endangered species, from wildcats to capercaillie.
Voluntary standards like the Woodland Carbon Code offer accreditation schemes which allow forestry projects to demonstrate how much carbon dioxide they actually sequester – offering confidence and legitimacy to businesses.
Financial incentives and benefits
Further incentives to invest in Scotland’s forestry industry come in the form of the grants available for the creation and maintenance of new woodland. There are also attractive tax advantages involved in the ownership and management of woodlands: from a generous 100% business property relief (under certain conditions) to exemptions from income and capital gains taxes. The sale of commercial woodland timber can also be highly profitable.
Forestry also seems to be navigating the recent extra challenges of the Covid-19 crisis with more ease than some industries, as the pandemic appears not to have negatively impacted land values, for now.
With the heady combination of tax, cash and environmental incentives in play, Scotland’s forestry industry looks likely to increase in popularity among investors. But this is not the easiest terrain to navigate – given the often complex environmental, financial, legal and land use issues involved.
At Lindsays, we already work with businesses, estate owners, accountants, land agents and others who are highly experienced in this area and can help signpost you through the issues and decisions. We’d be happy to speak to you, offer relevant guidance and make introductions.
