Highlands Rewilding and the roadmap from silver to gold standard in community-centred nature recovery
Discussion paper for the Scottish Land Commission and Scottish Government
26 September 2024
Dr Jeremy Leggett
Founder and CEO
Highlands Rewilding
This discussion paper is followed by correspondence between Alistair McIntosh and Jeremy Leggett, published in full and shared with permission from Dr McIntosh.
Background
A chain of three fundamental premises underpins this paper. First, biodiversity collapse and climate meltdown are existential threats to a liveable future, at home and abroad, and must be confronted as one of the highest priorities. Second, community-centred nature recovery on a national scale is vital if Scotland is to play a role in stopping and reversing biodiversity collapse and climate meltdown. Third, this cannot be done without private financial institutions such as pension funds investing extremely large sums, which hasn’t happened yet. According to one estimate, national nature recovery in Scotland – a particularly nature-depleted nation – would require nationwide investment of £20 billion by 2030. We are not even in the foothills of such an Everest of a goal.
Highlands Rewilding Ltd is hoping to attract the first financial institutions into the foothills in Scotland, and therefore accelerate the national response to biodiversity collapse and climate meltdown. The purpose of the company is “nature recovery and community prosperity through rewilding taken to scale.” This paper examines the community-prosperity element of that purpose: how it has been achieved to date, and how we intend to fulfil it in the future.
Risk and the frontier
As an entrepreneurial company seeking a market breakthrough, Highlands Rewilding is a conscious risk taker. In particular, the company took out a risky £12 million one-year loan to buy its third estate, Tayvallich. Our core reasoning for doing so was that whilst we already had a good spread of habitats in which to conduct our natural-capital verification science on the Bunloit and Beldorney estates, the addition of the rich collage of habitats on Tayvallich – plus offshore along the 40km of coastline – would add game-changing attractions to our portfolio and proposition.
Some refinancing means that the debt is now owed to UKIB and Top Online Partners, and £11 million of debt remains. The loan has to be repaid by the end of January 2025. The Board of Highlands Rewilding took the decision to take out the loan after checking the opinions of 18 of our 53 founding funders, those with the most high-level business experience. Almost all of these experienced advisors agreed we should go ahead. The common feeling was that the clock is ticking loudly on global biodiversity collapse, meaning Highlands Rewilding should try its hardest, in short order, to break through to scale in the nature-recovery market needed for a liveable future.
Looking back, we see four main reasons why taking out the loan has proved to be the right decision. First, we currently have 30 conversations underway currently with potential big private investors in the company, and it is clear this wouldn’t have happened without the acquisition of Tayvallich. This is because the Tayvallich Estate is uniquely fit for community-centred nature-restoration purpose. With more than a month to go before our current equity round closes [Updated since correspondence to 30th November] we can be reasonably hopeful of landing the few investors we would need from those 30, and any others who may join them in the endgame, in order to hit our target of £25 million for scaling in the UK. (We raised £11 million in equity in our first two rounds). We are grateful to the UK Infrastructure Bank and TopOnline partners for giving us the chance to bring the first private financial institution across the line in Scotland.
Second, because of the emergence of what we call the Nature and Community In Perpetuity model (NCIP). This is a unique model that guarantees a large tract of land will be used only for community-centred nature recovery, essentially forever. 1,300 acres (530 hectares) of Tayvallich Estate are now locked up for this purpose, come what may.
Third, because we have active discussions underway on company-community joint ventures in business, nature-related and otherwise. This is funded by the Scottish government under the FIRNS programme, and is intended to lead to exemplars of company-community enterprise, investable on a for-profit or non-profit basis by a variety of funders.
Fourth, because of the company–community relationship in Tayvallich, as captured in the goodwill agreement of the Memorandum of Understanding (MoU) that Highlands Rewilding and Tayvallich Initiative have signed. The MoU has been welcomed widely across the country as a pioneering development in landowner–community relations. We are now looking to replicate this in discussion with the local communities at Bunloit and Beldorney.
These are the top four successes as things stand. If Highlands Rewilding succeeds in our equity round, or in restructuring our bridging loan to a longer term loan, many other successes become possible.
Debt and the Highlands Rewilding business model
We have four options that can work, alone or in combination, in paying back the loan. The first is to succeed with the equity round. If we can do that by end October, we pay off the debt and have working capital for scaling. Our current skeleton crews on three estates will become full teams, and we can press on with the projects we have in planning jointly with communities. The time constraints arising from the loan payback date evaporate.
The second is land sales that replicate the sale of 1,300 acres of Tayvallich to the Barrahormid Trust under the Nature and Community In Perpetuity (NCIP) model.[1] If we can find more buyers willing to set up Barrahormid-type trusts we will be scaling a unique model that locks land up for community-centric nature recovery, at ever growing scale, essentially forever. This isn’t an either/or with the equity round – we can do both, in principle, and indeed are intent on so doing.
The third involves partnering with landowners who do not want to copy the whole Barrahormid-type arrangement, but who do want to partner with Highlands Rewilding as land manager, for a win–win share of natural capital proceeds. We call this our Operating System Partnerships for Rewilding (OSPREY) model.[2]
The fourth involves bonds: long-term loans that restructure the debt, at lower interest, over a long period. Banks have refused to lend to Highlands Rewilding until we have raised equity – a Catch 22 for us and the prospect of precisely zero risk for them. But other organisations supply bonds, and we are actively investigating them.In the hopefully unlikely eventuality of all the above failing, HRL will have to sell to non-collaborative buyers. We understand that would be extremely concerning for the communities where we work. But in this case, as with the previous options, we will apply Rural Housing Burdens on properties at sale with a covenant that each property will be used as a primary residence. This will leave a legacy locked in to the properties that reactivates generation after generation.
The vital need, in the Highlands Rewilding model, for the company to balance obligations to communities and shareholders
The Highlands Rewilding model is rooted in a quest for ethical profitability on the basis of three premises. First, that many billions of £s will be needed if nature recovery is ever to scale nationwide, as it must if biodiversity collapse is to be reversed. Second, this will mostly have to be patient capital from private financial institutions such as pension funds. Third, for-profit nature-recovery companies have the best chance of attracting that capital, and they will need to be successful and fast growing in order to be attractive to private investors. If these three premises are accepted, then Highlands Rewilding has a case for being worthy of consideration and its model worthy of replication by others.
Highlands Rewilding is rooted in the communities wherein it operates, and is set to become increasingly so in the future. Most of the current team of 34 live in or near the communities wherein we work. Nature recovery absolutely requires a rural workforce. Considering the range of talents in that team today, and the company’s direction of travel, the future Highlands Rewilding will essentially be a company not just staffed from within its local communities, but probably run and governed by stars from those communities.
And crucially, if the company grows to be as big as it could and will have to - if it is to be an industry leader - it will be bringing hundreds of millions of £s into the communities that would have been difficult-to-impossible to raise any other way. This will come from direct investment into the company, natural-capital monetisation by the company, and joint-venture companies between company and community of the kind currently being investigated in the current FIRNS project.
But first, the company has to survive today. And to do that it has to get the balance right between its obligations to its communities and its shareholders. If we downplay the shareholders, then financial institutions, mission-congruent family offices and companies will not invest, and HRL will fail.
Another way of looking at the balance between company and communities is to view Highlands Rewilding as a company that needs to consider two types of community: Community of Place and Community of Interest. Our three Communities of Place number c. 3,600: 300 in Tayvallich, 300 in Haugh of Glass (in which the Beldorney estate sits) and 3,000 in Glen Urquhart (in which the Bunloit estate sits). Our Community of Interest comprises our shareholders, all of whom, by definition, believe in the purpose of Highlands Rewilding. They number 809. There is overlap between the two, with nearly 5% of our shareholders living in our communities.
The Highlands Rewilding approach to the company / community balance in repaying our loan is to give preference to local communities wanting to buy the plots of land we are offering for sale so long as we are able to fulfil our obligations to our 809 shareholders. We have three priority categories of land-sale, and our local communities come first in all of them. (Note that Highlands Rewilding can choose who it sells to; it doesn’t necessarily need to sell to the highest bidder).
Priority One is land sales to buyers prepared to guarantee nature recovery and community prosperity in perpetuity, with Highlands Rewilding partnered as land manager, sharing natural capital proceeds (the NCIP model). For communities, we are hoping that the “in perpetuity” element of the NCIP model will appeal because it safeguards against any shift away from the core purpose of community-centred nature-recovery. For example, it would stop any caucus potentially forming in a community of the future that might wish to sell land to a developer of luxury homes for absentee owners. We are hoping that a lease with Highlands Rewilding will be attractive because most of our teams consist of people living on or near the estates we manage. Their deep and varied skill sets will be known to the communities, and the jobs – often enabling them to apply those skills where they weren’t before - are created by the company. Additionally, the charitable organisation that creates the NCIP would always be able to take the lease away from Highlands Rewilding if we fail to perform well in our community-centred land-management role, just as the Barrahormid Trust can under the Barrahormid lease. (But given the demonstrably deep and broad skill sets of our local employees, we believe we are the best current option for land management of these areas).
Priority Two is land sales to buyers not prepared to give that guarantee, but wanting to partner with Highlands Rewilding as land manager, sharing natural capital proceeds (the OSPREY model). Some communities may favour that model, notwithstanding the absence of the in-perpetuity guarantee.
Priority Three only arises in the unlikely event that all our conversations with private financial institutions fail and none of our NCIP or OSPREY sales offerings find buyers. In that event that the company will be forced to sell land to entities not interested in either of the above, in order to repay debt. Local communities still get first refusal as buyers. Also, in this case, as with the previous priorities, we will apply Rural Housing Burdens on each property at sale with a covenant that each property will be used as a primary residence. This will leave a legacy locked in to the properties that reactivates generation after generation.
The roadmap from silver to gold standard in community-centred nature recovery
Highlands Rewilding has been described as the “silver standard” in land ownership. The gold standard, in this frame of reference, is complete community ownership and control of land. The company recognises a gold standard of full community ownership and control, and that - as currently configured - we are not it. But if one accepts the premise that community-centred nature recovery on a national scale will require investment by private financial institutions in the multiple billions, then it can be argued that – today – “silver-standard” organisations are in a much better place to start that process. For private financial institutions to invest, they will need for-profit models capable of generating returns acceptable to their pension holders and shareholders. They will look to governance that is deeply experienced in the business world. Highlands Rewilding, and for-profit nature-recovery companies like us, can deliver those things. Much as we agree it is critical the gold standard of community ownership becomes part of the norm, all our experience of financial institutions suggest to us that the conditions co not yet exist for such models to attract investment on the scale needed. We hope in time that they will do so.
Looking ahead, we can see a roadmap emerging that can lead from the silver standard to the gold standard. Here is how it would work. With investment from private finance institutions Highlands Rewilding and companies like us will be able to grow fast, fuelled by the working capital we need. That means we will be able hire fast, because nature recovery is labour intensive. We will continue to hire locally, and as we provide more jobs we become more grounded in the local communities where we work.
As Highlands Rewilding and other nature-recovery companies like us become ever more investable, a deep pool of highly skilled nature-focused labour emerges in communities, greatly expanding the pool already there. Because of the pioneering work of the silver-standard companies, community organisations have ever-increasing access to the skills and business models that nature-recovery companies utilise in order to meet the investment-return requirements of private financial institutions. The latter, in turn, find it easier to invest in local enterprises, because they have become familiar with the market, operational models, and workforce they are investing in. And so the tens of millions, and then the hundreds of millions, begin flowing direct to gold-standard organisations.
In this vision, Highlands Rewilding will have achieved our purpose of community-centred nature recovery taken to scale. The company will have succeeded as an intervention appropriate to its time and could wind down and hand over to others – including among our increasingly numerous alumni in local communities - to continue to build a vibrant nature-based rural economy. But more likely, along the way we will have become a global powerhouse in natural-capital data and land-management for rewilding and community prosperity. We would no longer own much land, or even any. We would be a standard-bearer for a new Scottish export industry in data-led nature and community-prosperity services. We would be a company our home country could be proud of.
[1] The Nature and Community in Perpetuity model
The NCIP model entails a buyer of Highlands Rewilding land forming a charity that pledges a mission of community-centred nature-recovery in perpetuity. Highlands Rewilding then manages the land to ensure this happens, under a long-term lease, sharing proceeds from natural-capital monetisation with the charity. In an NCIP relationship, HRL would appraise the land for nature-recovery potential and local-community engagement potential. HRL then conducts baseline surveys with a mix of approaches and technologies to be agreed with the land owner. Centred around the baselining, HRL draws up a holistic land-management plan for discussion and agreement with the land owner. HRL then executes the land-management plan, covering agreed operating costs. HRL and the buyer then share the net proceeds from the management of the estate (carbon credits, biodiversity credits, other natural-capital credits and any agreed nature-based services profits such as timber products, eco-tourism, etc).
We would do so ideally in the ratio already in action with the Barrahormid Trust.
That is two thirds to HRL and one third to the Trust. That ratio serves two purposes: the HRL share allows the company to offer an attractive return to pension funds and other private financial institutions it seeks to bring into the embryonic nature-recovery market, and the Trust share allows it to finance eco-enterprises in the local community, as a means of ever deepening a good relationship between landowner and local community.
In Operating System Partnerships for Rewilding Highlands Rewilding would manage the land for a landowner not wanting to copy the Barrahormid Trust, using the operating system it has developed on three estates since it started up in 2020. Highlands Rewilding would appraise the land for nature-recovery potential and local-community engagement potential. We then conduct baseline surveys with a mix of approaches and technologies to be agreed with the land owner. Centred around the baselining, we draw up a holistic land-management plan for discussion and agreement with the land owner. We then execute the land-management plan, covering agreed operating costs. Highlands Rewilding and the buyer then share the net proceeds from the management of the estate in a win–win ratio, ideally the same as in the NCIP exemplar on Tayvallich.
A conversation between Alistair McIntosh and Jeremy Leggett, published in full and shared with permission from Dr McIntosh.
The discussion paper was originally shared with Alistair on the 26th September, 2024
Dark blue/black = Alastair’s original reply, 30th September, 2024
Dark Green = Jeremy’s reply, 7th October 2024
Light Green = Alistair’s further reply, 8th October, 2024
Dear Jeremy
Thank you for sharing with me your paper on HRL as a roadmap for shifting from the Silver to a Gold standard in community-centred nature recovery and land ownership. I especially appreciate it because our relationship has been a bumpy one coming, as we do, from different places on the questions of land ownership. That, however, is what makes discussion stimulating.
Your 7 pages represents a visionary outlook, one that contains much that I can warmly affirm as well as some serious points over which I remain critical. I would certainly urge you to go ahead and to share the document openly on the HRL website. You may or may not want first to consider some of my comments, and in what follows, the numbers in brackets are to your page numbering.
1. I hugely welcome your embrace of “community-centred nature recovery” (1). This is a massive leap forward for the “rewilding” debate, not just in the UK but worldwide. To integrate natural ecology with human ecology is what the planet needs. The human dimension has often been overlooked by rewilders, but since we are the cause of the planet’s distress the solutions must profoundly involve us, and therefore the work ahead must be both environmental and social.
2. The “how” of achieving that is where we have some differences, but in a pluralistic world it will never be one size fits all. Please therefore do not be discouraged by some of my responses, which may seem sharp.
3. I note your objective of “nature recovery and community prosperity through rewilding taken to scale”, and I welcome your focus on “the community-prosperity element of that purpose” (1). When you and I first spoke courtesy of Ian Callaghan’s introduction back in August 2020, that understanding of the community imperative was not well developed in either your vision, or that of the wider rewilding community of interest. I am thrilled to see that it is so now, and thank you for the leadership that you have contributed in making it so. In that respect, Steve Carver came to see me earlier this year, the newly made prof of rewilding at Leeds Uni. The two of us had had some rough and tumble over the place of communities in nature restoration on Twitter. However, a dram can be the finest lubrication, distillate from the land itself, and Steve too is now very much getting the need for nature and communities to walk hand in hand. I think the reason why there has been a learning curve on this is that not all key players in the debate have been aware that Scotland now has such good case studies of such integration coming about. Langholm, Knoydart, North Harris and Eigg are but a few examples amongst our 500+ land trusts covering very nearly 3% of our land area.
J: Indeed, none of us should be afraid of, or ashamed of, learning curves. I have been trying to go up them all my life, and hope to continue so to do for a while longer. And the whole point about strategy is that it should be organic.
A: That organic structure is how nature, including much of human nature, works. Where respected, it can be an antidote to the realm of virtual reality.
4. I have to admit having indulged in a slight chuckle at your two models – Nature and Community in Perpetuity (NCIP) and the Operating System Partnerships for Rewilding (OSPREY) – (3). I say “chuckle”, because when Donald Trump was asked by ABC in the September 10 presidential debate if he had a plan for health care, he replied, “I have concepts of a plan.” I can see the strength of NCIP an OSPREY in making a pitch to investors. However, it is conceptual to the point of being jargonistic. Such a style may arouse suspicion in communities where arrangements arise in much more organic ways. It is important to be aware that Scotland has a long history of communities being met by a new laird with a masterplan, to which the local response is often a weary “Aye, right”, because they’ve seen it too often before. How can you address that when I can see that you need a cerebral and even jargonised approach when trying to draw investors? I would suggest you acknowledge that you are pitching a conceptual template, but that just as natural ecology is always niche specific in what can work, so the same will apply on the ground with communities. Don’t leave them feeling that they’re being fed into a flow chart, no matter how benignly intentioned. It can be a short step from flow chart to machine.
J: Given that we are essentially testing a premise that “enlightened capitalism” can feed hundreds of millions in pension fund investment into the rural economy in the years ahead, and trying to create a standard bearer for that, I guess a little business jargon is inevitable? I have been surprised at how many profoundly business-literate folk (and indeed experienced) there are in the communities where we work. As for NCIP, I think we managed to explain that in Tayvallich. At their most recent public meeting the community voted overwhlemingly to support Highlands Rewilding in its efforts to replicate the NCIP model first used in the land sale to the Barrahormid Trust.
A: Yes, there is a lot of business savvy in Scottish rural communities. It includes the skills of such as incoming retirees who offer their skills in the service of the communities that they have come to. I think of such as the late John Booth, an Oxbridge scientist who retired to Eigg, who never believed in the principles of land reform (and delighted in baiting me about it in the pub!), but who gave his expertise to mastermind the technical aspects that resulted in Eigg’s world-leading renewables electricity grid. Below, I will reference an interview with Kate Forbes. See what she has to say about learning to have conversations across the garden fence of differences.
5. Your NCIP wisely uses charitable status, as you put it, to guarantee that “a large tract of and will be used only for community-centred nature recovery, essentially forever”. However, “community centred” could mean anything from a patronising traditional landowner dynamic to the authentic and constructive relationship that you seem to have established at Tayvallich. I therefore suggest that you emphasise not just being community centred, but ensuring that communities have the real power of democratically accountable agency.
J: We talk about agency, not consultation, throughout our literature these days. The Tayvallich Estate Local Management Board is the embodiment of it.
A: Yes, and I think back to my VSO training course in 1977 when a wise instructor said that we needed to grow “long green tentacles” in how we would engage with indigenous communities.
6. You outline 4 models for re-financing when UKIB (and Top Online Partners Group Limited?) calls in their outstanding £11 million at the end of January 2025. These range from raising capital or issuing bonds, to various types of sympathetic partnership agreement (OSPREY) (2-3). However, pivotal to these is that your models, except for option 2 as the NCIP model in partnership with the community or a sympathetic charity, are capital-based, and therefore, require a return to investors or as option 3 has it, “a win-win share of natural capital proceeds” (3). This locks the future of communities of place in to both capital as the basis of financing, and natural capital as perhaps the primary source of financing to service capital. Such is a considerably more narrow revenue base than such estates normally enjoy, and even those other options can be space. Moreover, it ties you in to such mechanisms as voluntary carbon pricing, which is currently a stagnant market in the UK as far as I can see, and biodiversity credits, which do not at present exist in Scotland: and both of them incurring the moral philosophical questions incurred by the displacement effects of “offsetting” (i.e. paying for biodiversity loss due to development in one location by a hoped-for increase elsewhere, or the equivalent narrative in carbon offsetting).
J: This is the “can capitalism ever work”, or “does capitalism have a survival instict?” question. I don’t think I know the answer to that for certain. I am merely posing the question, being convinced there is no other way to finance nature-recovery on the scale we need. And I don’t think our model ties us to offsetting. We have a buyers’ charter, and are determined to avoid greenwashers.
A: I am reassured by your uncertainty. Me, likewise. But think twice of “being convinced there is no other way”. I mean, it’s bad enough to channel Donald Trump, but to include ... Mrs Thatcher. (My apologies!).
7. Your default, in the event that none of these 4 models transpires, is understandably enough that the land gets sold on the open market. In such an event, I enthusiastically welcome your commitment to “apply Rural Housing Burdens on tenanted properties” (4 & 5). This would ensure that even if your plans fail on a given estate, you may well be well regarded for having catalysed a shift in a community’s social structuring.
J: Indeed. And for having sold land without profiteering to the community for affordable housing, their biggest concern. And for having locked half the estate into community-centred (agency-explicit!) nature recovery essentially forever. And for the sale of most of the tenanted properties on Tayvallich to the tenants on a non-profiteering basis (underway as we speak).
A: I am very glad to hear that those sales are underway, indeed, one of the Tayvallich team mentioned to me in an email today how happy they are about this. You are doing something very good there. As it happens, this week I am leading the residential programme at Iona Abbey. The theme is climate change and its spiritual dimensions. The 40 people here include a group of a dozen young climate activists from New Zealand (don’t ask how they got here, but I do think that in One World the young need to travel). They are exasperated at how little they can do, but what they can do, like what you say about selling the tenanted houses, is something to affirm. How? I used the story of the woman anointing Jesus with the precious oil. We’re told that it was nard (or spikenard), interestingly, extracted from the root of a plant that was endemic to the foothills of the Himalayas. Therefore I delight in teasing evangelicals, “that Jesus oil was Hindu-Buddhist oil”. The story in Mark 14:3-11 is powerful in activism and other action. It makes three points. 1) Faced with criticism from the teachers of the law, Jesus justifies her action on the grounds that she had done something beautiful; 2) She couldn’t do everything, but he stresses, “she did what she could”; 3) And lastly, he says that this is what she will be remembered for after her passing. Apply all that to enabling community agency.
J: But we are not going to fail, on the strong balance or probabilities. The fundraising is actually going rather well as things stand. All the schandenfreude headlines are going to have to be rewritten.
A: I’d urge modesty on the “we are not going to fail”. Mark 14:8: The ancient Chinese “book of changes”, the I Ching, describes an archetypal constellation that in the Wilhelm-Jung translation is called “the Taming Power of the Small”. It’s about the power of modesty under difficult circumstances, about decorum. “The wind drives across heaven: The image of THE TAMING POWER OF THE SMALL. Thus the superior man refines the outward aspect of his nature.”
8. However, here we get to the crux of the difference between us; or at least, of a difference in balance as to where the thinking of people like me overlaps with that of you and like-minded innovators. You say, “The HRL model is rooted in a quest for ethical profitability [depending on mostly] patient capital from private financial institutions such as pension funds” (4). (I take it that “patient capital” means capital that is prepared to sit dormant for a long time before it realises a justifiable return). You proffer a capital-driven model of land ownership, acquisition, and therefore, control over the land’s use and future. That is, of course, the dominant Western and British model post Clearances, Enclosures and other forms of land colonisation. But such monetarism (in the wide sense of the word) is not the only possible way ahead. In Scotland, most of the players in land reform look towards a politically-driven model. Existing examples already put in to Scottish law are the crofting community right to buy in Part 3 of the Land Reform (Scotland) Act 2003, and the community right to buy for sustainable development that came into force in 2020 (Follow through to legislative links from here.)
J: So am I right in summarising the crux as you being an anti-capitalist and me being someone hopeful (but not certain) that capitalism might prove to have a major role in reversing biodiversity collapse and pumping £hundreds of millions into rural communities whilst giving a fair return to pension holders both in the communities elsewhere?
A: Yes, you are right, but though my approach is more the pluralism of a mixed economy. Moreover, I do not map easily onto a conventional left-right political spectrum. I suspect and hope, neither do you. A couple of days ago an acquaintance published an interview with Scotland’s deputy First Minister, Kate Forbes. She’s of the Isle of Skye. I’d recommend reading what she says. As the former finance minister, she gets for leaning neoliberal. But as she sees it, her underlying aim is service to the vulnerable in the community. She is not popular with some of my activist colleagues because her traditional Highland religion freaks them out. What I think they miss, is that there is a deep ethos in the Highlands and Islands of business people serving the community. The interview is here. I think you might find her speaking both your language and mine on capital and capitalism.
9. There is high pressure in Scotland to take this much further, and I think that the thwarting of the independence aspirations of nearly half of Scotland will only increase that pressure, as it comprises powers within our existing devolved constitutional settlement. How might such shifting of land into community ownership be effected and capital markets, subverted? Approaches that are widely discussed include the introduction of land value taxation and/or a land transfer taxes (with public benefit owners exempt), the proceeds of which could be used to finance further community buyouts and at the same time, exert downward pressures on the market capitalisation of land and therefore, its affordability to communities. Such measures as already exist, or might be intruded by a future Scottish government wishing to assert its radical credentials, would wave into a legislative framework such market spoiling tactics such as we used with Eigg, where a dynamic of “the natives are restless” depressed buyer interest and thus, played the market against itself.
J: I can only empathise with this. I am pretty convinced that if I were a genuine Highlander as opposed to an incomer I would be a passionate nationalist. This opinion is rooted not just in the learning curves of my four years up here full time (and watching the serial disasters in London), but in my reading and learning about the history of the British Empire and its modalities throughout its history.
A: That’s a great learning curve
10. Your proposals accept capitalism as it is but attempt to give it a human face: what I have suggested here, and the slow drift of Scottish legislation, challenges that paradigm, and I would point out therefore that to buy into your framework, whilst good as Silver Standard, does entail buying into the capitalist approach (i.e. driven by the power of private capital, which is not evenly spread across society or between regions in a nation). I am not suggesting that you should be apologetic about that. Your approach is “realism”, mine is more “idealism” as the military would put it. But to be aware of relative positioning is important in scenario planning.
J: I wouldn’t even classify my approach is “realism”. More like “hope.”
A: Fair.
11. While it may be possible that, one day, “HRL will essentially be a company not just staffed from within its local communities, but probably run and governed by stars from those communities” (4), that would only be true if the governance is democratised. If it is not, it would remain a plutocracy of shareholder governance whether benign or otherwise. Forgive me, but I am coming at this from a long history of communities being let down by the professed good initial intentions of individual and corporate private landowners.
J: Well lets see how that plays out, in an evolutionary sense. It wasn’t so long ago that corporates were entirely happy to buy up large tracts of Scotland and try to operate them from afar. My experience is that most of them aren’t any longer. Where is that leading?
A: If so, I don’t think many will lament their departure. If the demand for land falls it will render it more affordable to those who live upon it. Speculative land value adds nothing to its productive utility; quite the contrary. Anent which, did you see Andy Wightman’s blog today? The French government is divesting itself from Scottish forestry land.
12. Thus, as you go on to acknowledge with commendable clarity and honesty, “If we downplay the shareholders, then financial institutions, mission-congruent family offices and companies will not invest, and HRL will fail” (4). There lies the dilemma in the rationale for your approach. And yes, you will likely say, “But we are living in the real world, and time is of the essence, Alastair.” That is why I offer a critique of your position, but not a writing-off of it.
13. I appreciate your recognition of the difference between communities of place and communities of interest (5). Also, I can see that with HRL there is overlap between both. Also, I think that your mention of Bunloit having some 3,000 community stakeholders will be locally appreciated, as will your hope to give local communities first preference if selling land (albeit within the understandable constraint of fulfilling obligations to your 809 shareholders).
14. I note that if a community buyout should lease land back to HRL for management, “communities would always be able to take the lease away from HRL if we fail too perform well in our community-centred land management....” (5). That’s a wise caveat, but one that must be given mutually agreed constitutional teeth. As an aside, in the early days of the Isle of Eigg Trust we were met with justified suspicion by many resident islanders. We had not yet established trust, we had not even any money, just “the concepts of a plan”! The turning point came was 3 months after the Trust’s launch, when we committed to giving the community power of veto over our decisions (see West Highland Free Press report, Item 2 here). Oddly, our power came from giving away power, a question of “servant leadership”. You seem to have already achieved that to an extent with the MoU at Tayvallich. I find it striking and pleasing that I have not heard a single substantive criticism from within the local community as to how you are operating there.
J: That’s it. We have given away “soft power” to the community, in that nothing is going to happen that doesn’t command a spanking community consensus as reflected by the management board required under the MoU. Meanwhile - touch wood - we don’t seem to have put off the conservative financial institutions we must bring into our frontier experiment if Highlands Rewilding is to succeed.
A: What’s interesting, is the power of soft power. It’s that “taming power of the small” again. Early on, I made the point to the Tayvallich community leadership that although an MoU would have few if any legal teeth, the fact that it rests on trust and honour gives it in some ways greater power and, certainly, meaning. That brings the added gift of deepening humanity between the stakeholders.
15. You say: “For private financial institutions to invest, they will need for-profit models capable of generating returns acceptable to their pension holders and shareholders” (6). Here is the nub of the finace-driven model over the politically driven one (which is not to suggest that the political would not also have its unintended consequences). It begs the question as to how the average Scottish estate classed as mainly less favoured area (LFA) land can be competitively profitable, with or without being managed primarily for both nature objectives and to the benefit of stakeholder local resident communities. You may have read the several pages on financial drivers in my Community Land Scotland paper, sections 10 and 12. I have yet to see how the model as you pitched it to shareholders can stack up. This will, understandably, be work in progress, but if it is to comprise “the roadmap form silver to gold” as your paper suggests, it does invite some firm grounding and quantification. At the moment, it comes over as aspirational and this offsets the “realism” of your finance-led approach. If unresolved, such can only sow seeds of concern in local communities, who will understandably fear that the estate may be asset stripped and this, to the detriment of community cohesion and future options. This concern is not alleviated by HRLs 2023 accounts as one financially qualified observer has already privately drawn to my attention. Communities and their advisors do look into such detail, therefore forward planning budgetary transparency is crucial to build wider credibility. I know, from looking back to 1991 when we started the Eigg Trust with just £10 in the bank, and we struggled over such questions in the early years.
J: Well we are going to find out in the months ahead whether the Highlands Rewilding model can survive under fire. Meanwhile there has indeed been some asset stripping ….by us, in favour of the community, as described above in my response to point 7.
A: I can’t comment on Beldorney, but the challenge is to try and extend that model to Bunloit, where there is an awakened desire for it.
16. I come finally to the crux of the paper. It sets out, as just mentioned, to be “the roadmap from silver to gold standard in community-centred nature recovery” (1 & 6-7). I appreciate your adoption of the bronze-silver-gold terminology. However, and tying in with points 7 and 8 above, if I was a community member reading the paper I would want to understand much more about how “the investment-return requirements of private financial institutions” can be squared a dynamic where “tens of millions, and then the hundreds of millions, begin flowing direct to gold-standard organisations” (6). In my ideology – and I concede that it is an ideology just as capitalism is an ideology – the gold standard does not equate with being beholden to investors. Shareholder democracy, including where there is high capital gearing or debt-to-equity ratio, is not the same as community democracy. A shareholder democracy is plutocratic, usually one share one vote, and therefore tends towards being an oligarchy unless the shareholder structure has an exceptionally flat profile with no peaks. However, a community land trust such as defined on pp. 12-14 of the Scottish Land Fund guidance notes is a very different animal. I can see that what your concept paper is outlining is a very good, and perhaps even, exemplary, Silver Standard. But at least in the way that I originally introduced and defined the terminology in Section 9 of my Community Land Scotland paper, it is not the Gold Standard. At least, not unless relationships with financial intuitions were to be accountable through a land trust where a community is accountable unto its own democratic structures. I would therefore urge that you consider toning down the enthusiasm at the end (6 & 7), and that you consider representing what you are doing as a much-needed example of the Silver Standard, without venturing as far as prematurely anticipating the Gold Standard. To do so only makes it look as if you might be over-promising at the risk of under-delivering, and I am sure that such is not your intention.
J: Apropos your definition of gold, who is to say that pension funds won’t start investing in community land trusts, on the road ahead? I can see, for example, church pension funds - under ever tightening pressure to invest in faith-congruent ways - starting the ball rolling. But I’m happy at this point for my definition of gold to be different from yours.
A: The difficulty here is the expected rate of return on investment, and how that squares with the generative capacity of Highland estates. That’s the question that none of us have yet seen HRL adequately answer. HRL is both a market-maker and a market-taker. The very fact we’re discussing this in terms of market paradigms renders me uneasy, just as narratives of a National Health market as distinct from a National Health Service is disturbing. On the definition of the Gold Standard, do please make it clear that you are defining it differently to how I first set it out.
I do hope that my frankness is not offensive to you, and that I have not materially misunderstood your proposal. I hope these comments might be of a little help in refining things.
J: Certainly not. Do you mind if I share this missive with folk I know will be interested? And perhaps if you have one more round of responses, so that we have two apiece, I can publish it on the Highlands Rewilding website (after we have both had a bit of a final edit). If nothing else, it helps map the boundaries of a vital debate.
A: As said above, please do share this missive. I like the expression “map the boundaries” and you will be as aware as much as anyone that this debate will be watched by a wider constituency, including the decorum in which it is held.
Back in 1996 I took my students in human ecology from Edinburgh Uni to County Mayo on a study tour, where our local host was Sister Maureen Lally whose service to the community and way of earning income for the convent was through the agriculture and rural development agency, Teagasc. She introduced me to an American colleague who was also with students on a study tour.
I asked a daft laddie question. “But, what can they learn in Ireland that they couldn’t learn just as well back in the USA?”
Her answer? “How to have a conversation across the garden fence.”
With best wishes,
Alastair.