Why is Diageo Investing US$6.5m into Scottish Peatland?

Diageo is a global leader in premium drinks and to date the company has more than 200 brands that are sold across 180 countries.

This year, however, the company is stepping out of familiar territory and stepping into the world of peatland restoration. 

Diageo is announcing its investment of up to £5m (US$6.5m) over five years to help restore up to 3,000 hectares of degraded peatland across Scotland.

Backing peatland restoration

Partnering with Caledonian Climate, the company aims to identify and co-fund projects that:

• Restore depleted peatlands
• Increase carbon storage
• Enhance biodiversity
• Improve water management in some of Scotland’s most iconic yet fragile landscapes. 

Peat is a type of soil that contains a high amount of dead organic matter that has accumulated over thousands of years, according to Ireland’s Department of Agriculture, Environment and Rural Affairs.

WWF states that “The peatlands in the UK together store more carbon than all of our forests put together but… around 80% of the UK’s peatlands are degraded in some way, leaking climate change emissions out into our atmosphere.”

Peat provides the smoky flavour in several Scotch whiskies and, although only small amounts are used in production, peatlands are vital for carbon capture and water regulation, making their restoration critical for both climate and the long-term sustainability of Scotch whisky.

“Restoring and protecting Scotland’s peatlands is essential to addressing climate change, protecting biodiversity and reducing carbon emissions,” says Ewan Andrew, President of Global Supply and Chief Sustainability Officer at Diageo.

“Peatlands also play an important role in water management, ensuring the sustainability of Scotch whisky’s number one ingredient.

“We are taking a multi-pronged approach to peatlands through restoration and longer-term innovations. 

“Through collective action with other partners and producers, we’ll restore many more times the amount of peat than we will use. 

“This ensures we can maintain the traditional smoky flavour of numerous Scotch whiskies, whilst contributing to the conservation of Scotland's landscapes.”

Cutting peat use through innovation

Alongside this restoration programme, Diageo is updating its approach to peat use in whisky production. 

The company is trialling innovations in its maltings operations to use peat more efficiently, reducing the amount required per tonne of malted barley, with a 5% reduction already achieved since trials began in spring 2024. 

It is also exploring how peat smoke could be recirculated in maltings and assessing the potential to use displaced peat from other sectors, such as construction for electricity infrastructure, in Scotch whisky production. 

These initiatives are part of a science-based strategy to better understand and optimise peat use efficiency, with the intention of sharing findings across the wider industry.

“We're delighted to manage this ambitious investment for Diageo,” says Freddie Ingleby, Managing Director at Caledonian Climate.

“Their collaborative approach, bringing together a range of stakeholders, including scientific experts, landowners, communities and NGOs, will accelerate peatland restoration at scale across Scotland. 

“Taking a science-led approach over the five-year commitment, we'll build on best practices and share learnings across the sector, advancing our collective understanding of peatland restoration whilst supporting nature recovery, water resilience and climate action.”

Scale impact across Scotland

The programme will be managed by Caledonian Climate and delivered in partnership with scientific experts, landowners, local communities, NGOs and other stakeholders to ensure best-practice restoration and robust measurement. 

“Healthy peatlands are extraordinary climate champions, not only capturing carbon that mitigates climate change, but also storing water that helps reduce flooding and alleviate droughts,” says Coenraad Krijger, CEO of Wetlands International. 

“This collaboration with Diageo and Caledonian Climate will invest in solutions that will restore huge amounts of degraded Scottish peatlands for the benefit of people, nature and climate, while inspiring other businesses to follow this example elsewhere in the country and across the globe.”

Impacts will be tracked across carbon, water and biodiversity, supported by a collaboration with Wetlands International and other conservation groups. 

All projects will prioritise collaboration and co-funding, combining private investment with mechanisms such as the Scottish Government’s Peatland Action Fund and supporting initiatives co-funded by other distilleries and partners, including work with the RSPB on the Oa nature reserve on Islay.

• Interested in learning more about this topic? Join us at Sustainability LIVE: The Net Zero Summit in London on 4-5 March 2026 for in-depth discussions on Nature Based Solutions, with leading sustainability experts. Secure your ticket now and save more than £200.