An attempt to let ordinary investors co-own the Cop26 Forest of Hope in Scotland has stalled because the City regulator and crowdfunding platforms view the project as too “high risk” and “speculative”.
Jeremy Leggett, a former Greenpeace director who founded the solar panel pioneer Solarcentury, wants to create a “mass ownership” company that would hold the shares in one of his rewilding estates, Beldorney near Huntly in Aberdeenshire.
The estate is the site selected for the Forest of Hope, where more than 250,000 native broadleaf species will be planted by “citizen rewilders” in woods that will span the length of the River Deveron, with the organisers of the Cop26 innovation zone hoping it will form part of the conference’s legacy.
But the project on the 865-acre estate has been rejected by the crowdfunding services Seedrs and Crowdcube. The Financial Conduct Authority classes such investments as “high risk” and only suitable for sophisticated investors.
Leggett, founder of Highlands Rewilding, said the £2 million share offer to the public was motivated by concerns in Scotland over the recent rise in land purchases by wealthy individuals and companies, who will use the land in carbon-offsetting schemes.
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“What does not sit well in Scotland is individual billionaires or companies . . . buying great tracts of land and operating them from afar.”
A spokeswoman for Crowdcube said: “We don’t work with any firms where the main business is land ownership . . . and we generally avoid project financing as the risk profile is very different to what our investor community, which largely consists of retail investors, would usually see.” Another factor was that land assets were not eligible for investor tax relief initiatives, she said.
Seedrs said that while it supported the project’s objectives “ the company’s desired investment structure wasn’t one that the Seedrs platform supports”.
The FCA said that while it was working to create regulations to enable additional private investment in net zero projects it viewed “investment-based crowdfunding solutions, including land projects, due to the potential for losses, as a high-risk and speculative investment activity.”
Leggett said he would continue to look at ways to offer the shares directly to the public. “It’s a sad thing that such innovative platforms, which have made such a positive impact in retail investment generally, can’t see their way to helping not-so-affluent Scots co-own rewilding land, especially when you consider how fast it is rising in value,” he said. “But Highlands Rewilding is not giving up, and I am cautiously confident that we will find a way to broaden our shareholder base via crowdfunding.”
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Highlands Rewilding anticipates providing a return to its existing investors from rising land values, and revenues from biodiversity-gain and carbon credits, forestry and eco-tourism.
It also wants to create a secondary market for its shares, allowing retail investors to exit if they wish. However, according to Highland Rewilding’s website the shareholder agreement restricts who the shares can be sold to. “[It] specifies that shareholders support the mission of the company and will only sell their shares to those that also support it,” it states.
Leggett has invested £3 million in two Scottish estates from the cash he received for his minority stake in Solarcentury, which was sold for £117.7 million in November 2020. To rewild the Beldorney estate through Highlands Rewilding, he is raising a further £6 million, of which more than £4 million has already been committed.
Leggett said the idea for the Forest of Hope came from Climate Action, a consultancy, which has partnered with Scottish Enterprise, the development agency, to create the Cop26 innovation zone in Glasgow.
“They said ‘You have bought this estate. Plant the Cop26 legacy forest there. Everybody will be inspired’. A local charity, the Cabrach Trust, has picked up the ball and is trying to convene a corridor of planting all the way up the valley. It’s a fantastic amplification of the work we will do on Beldorney.”
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Investor appetite for nature-based solutions to carbon capture that generate returns appears strong. More than £2 million was raised in under 48 hours from 415 people in September by the Dundreggan Rewilding Centre, which expects to open in 2023. Trees for Life, a charity, used a crowdfunding platform operated by Triodos bank to offer the charity bonds, which pay investors 6 per cent interest for nine years.
