Following their recent discussion paper on delivering community benefits from investment in natural capital, the Scottish Land Commission ("SLC") has published new guidance on 'Delivering Community Benefits from Land'. The guidance aims to "support the development of responsible practice in delivering social and economic benefits to communities from land", including in the context of investment in natural capital.

Discussions around land reform have long been concerned with how the way in which land is used and managed can impact local communities. More recently, focus has turned to the impact that increasing investment in natural capital has on land use and communities amid media reporting on the phenomenon of "green lairds". This focus has resulted in the addition of a new principle to the Scottish Land Rights and Responsibilities Statement ("LRRS"):

“Land ownership, management and use should deliver a wide range of social, environmental, economic and cultural benefits.”

The new guidance expands on the above principle and aims to assist all those with an interest in Scottish land (including not only landowners but land managers, investors, communities, public bodies and professional advisors) to consider how they can best meet the ambitions set out in the LRRS. The guidance is the first of its kind on the subject and clarifies what community benefits are and how they can be delivered.

The guidance complements the existing Interim Principles for Responsible Investment in Natural Capital, which state that “investment in and use of Scotland’s natural capital should create benefits that are shared between public, private and community interests”. The guidance expands on this, considering ways in which investment in natural capital can benefit the local community. It provides the following examples of factors to consider:

  1. Opportunities to provide a financial benefit for communities: In some cases, it can be appropriate for community benefits to take the form of donations or payments made to the community. This can include either a lump sum payment or a community benefit fund paid annually. The guidance points to onshore windfarm projects as an example of natural capital investment which commonly includes the establishment of a community benefit fund.
  2. Providing local investment opportunities: Another increasingly common practice is to provide local stakeholders with an opportunity to invest in natural capital projects. This can also increase the involvement of the community in the project if ownership of shares includes decision-making powers.
  3. Being transparent about finances: The guidance encourages transparency around the financial management of natural capital projects, which should allow all parties to be clear on the costs and planned return of the project and improve trust between parties.
  4. Procuring goods and services locally: The guidance encourages those investing in natural capital to consider whether any of the goods and services required to implement the project might be obtained locally, to help create an "economically and socially sustainable community". This can have the added benefit of reducing transport and accommodation costs, as well as increasing community support of the project.
  5. Creating opportunities for fair work: Investment in natural capital can create significant local employment opportunities and consideration should be given to how these can be made into good quality employment opportunities. The guidance points out that the Scottish Government has started to build fair work requirements into its criteria for organisations receiving public funding.

More generally, the SLC guidance emphasises the need for any approach to be tailored to the particular community's needs rather than advocating for a one size fits all approach. It encourages landowners and managers to go beyond community engagement and consider creative solutions which benefit all parties.