From the craggy peaks of its tallest mountains to the tranquil waters of its lowest lochs, Scotland is rightly proud of its stunning natural landscape. 

But with the advent of climate change and ever-growing threats to the environment, there are fears some of the country’s greatest natural treasures are at risk.

Now an ambitious new initiative aims to pump £1 billion into Scotland’s environmental assets, by encouraging public bodies, private firms and non-profit entities to invest in schemes such as planting native woodlands and restoring oyster reefs. 

It’s a sophisticated vision based on a simple premise: that investing in nature can generate substantial returns. 

Jo Pike, deputy chief executive of the Scottish Wildlife Trust (SWT), said there was “a growing awareness that investing in nature-based solutions can help us solve some of the biggest problems we’ve got”.

Meanwhile, there is an emerging realisation that “the loss of species, the loss of biodiversity, is equally serious”. 

“With that backdrop, we’ve got urgency there,” Ms Pike added.

The £1 Billion Challenge, or Scottish Conservation Finance Project, is being led by SWT and the Scottish Environment Protection Agency (Sepa) and aims to drive investment into Scotland’s natural assets in ways which will deliver significant environmental, social and economic benefits.

The idea is that investors provide a chunk of cash up front to finance ambitious environmental schemes, on the understanding that they will make money in the long term. 

Those who stand to directly benefit will then pay smaller amounts into the project over a period of time, creating a profit for investors.

Ms Pike explains: “The investors provide the upfront money, and then over time they’re paid back from that cash flow that you’ve secured, negotiated from the people who are going to directly benefit from improved water quality or better flood protection.”

Housebuilders and insurance companies, for example, could pay towards planting woodlands and restoring wetlands in order to reduce the risk of flooding.

A similar scheme in the US called the Forest Resilience Bond, which experts in Scotland are learning from, uses private capital to finance forest restoration in an effort to prevent devastating wildfires, such as those which swept through California last year. 

Ms Pike gave the example of two particular projects which are being examined in Scotland. 

The first would see a vast network of riparian woodlands – or riverbank woodlands – planted throughout the country to help boost biodiversity and protect against flooding. This would also reduce water temperatures, which could be of financial interest to Scotland’s booming whisky industry.

Meanwhile, plans are also being drawn up to transform vacant and derelict land across towns and cities.

Ms Pike said there was “more and more research” highlighting the financial benefits created by urban green spaces for health alone.

She said the £1 Billion Challenge  was at the “cutting-edge” of global ideas about how to tackle environmental threats, and pointed to recent research showing almost one in five British mammal species faces a high risk of extinction. 

The Scottish Conservation Finance Project has been shaped by a range of organisations including Virgin Money, Scottish Natural Heritage, Crown Estate Scotland, Highlands and Islands Enterprise and Scottish Water. 

John Rowan, former group treasurer of Virgin Money, said it should offer “a variety of sustainable investment opportunities”, offering “good diversification opportunities”.