Aberdeen has entered into an agreement to purchase 6,447 validated Pending Issuance Units (PIUs) linked to restoration at Armadale Farm in North Sutherland, becoming the first buyer of units from the project.

“The agreement establishes a direct relationship with a Scottish nature-based project and supports the long-term restoration, monitoring and maintenance of the peatland,” said Aberdeen.

The initiative supports restoration in the Flow Country, which stretches across Caithness and Sutherland and is home to the world’s most intact and extensive blanket bog system.

In 2024, the Flow Country became the first peatland to receive UNESCO World Heritage status, recognising its global significance.

“The units correspond to Aberdeen’s residual Scope 1 and 2 operational emissions for 2023 to 2025,” said the investment giant, which oversees £580 billion of assets.

“They represent expected future carbon benefits and are not verified offsets today. Subject to ongoing monitoring and successful verification under the UK Peatland Code, they are expected to convert into verified Peatland Carbon Units.

“Aberdeen would then have the option to retire those units against its residual operational emissions.

“The purchase is linked to a wider project that has restored more than 690 hectares of peatland at Armadale Farm. Aberdeen’s contribution will provide finance to support the ongoing management of the project.

“Emissions reduction remains Aberdeen Group’s first priority. Having reached its initial interim target in 2025, Aberdeen is now targeting an 85% reduction in Scope 1 and 2 operational emissions by 2030 against a 2018 baseline, alongside its operational net-zero commitment for 2040.

“The units relate only to the comparatively small volume of operational residual emissions Aberdeen has not yet been able to eliminate …

“The purchase forms part of Aberdeen’s broader approach to nature and biodiversity, including supporting the protection and restoration of nature while seeking to avoid negative impacts on people and communities.

“It builds on the company’s existing environmental work by directing private finance towards a locally based project with expected environmental and social benefits.”

Holly O’Donnell, Head of Corporate Environment Strategy at Aberdeen, said: “Peatland restoration offers a practical way to support both climate and nature, while bringing benefits to the communities working to restore these landscapes.

“As a Scottish-headquartered business, we are pleased to support a project in the Flow Country, where the local connection sits alongside the habitat’s global significance.

“Our priority remains reducing our operational emissions. Supporting restoration complements that work; it does not replace it, while enabling us to contribute to the long-term recovery of an important Scottish ecosystem.”

NatureScot’s Head of Operations – North, and spokesperson for the Flow Country Partnership, Graham Neville said: “Responsible investment in nature restoration in order to future-proof against climate risks, while supporting long-term resilience and community benefits, is crucial for Scotland’s economic future.

“Restoring peatland requires long-term commitment, from planning and carrying out the work to monitoring how the landscape recovers. Nature finance from private businesses such as Aberdeen can help sustain that work alongside public funding.

“At Armadale in the Flow Country, collaboration with the landowner and local contractors has helped repair damaged peatland across a substantial area. The project in this internationally important peatland shows how nature restoration can complement a working farm, with benefits for the landscape and local economy by tackling climate change and supporting local employment for local contractors at a traditionally quiet time of year.”

NatureScot’s Director of Green Economy Robbie Kernahan said: “Restoring nature not only offers great rewards for biodiversity, but it tackles the very real climate risks many businesses, farmers and communities are now facing. By working together, the private sector, communities and landowners can help generate these rewards for everyone.

“I’m delighted to see the first purchase of carbon from the Flow Country, which supports high integrity and vital nature restoration funding. We’re working hard to support similar transactions before the end of this financial year, which will build on this example of scaling up the carbon market in Scotland and bringing responsible private finance in to tackle the nature-climate emergency.

“We are grateful for funding from FIRNS and support from the Nature Investment Partnership to make this happen, as we continue to welcome investment in peatland carbon from the Flow Country.”