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

Global drinks company Diageo is undertaking a major environmental initiative, investing up to US$6.5m over five years to restore Scotland's degraded peatlands.

The owner of brands like  Johnnie Walker and Guinness is stepping beyond its usual operations to address the environmental impact of one of its key ingredients.

Peat is responsible for the characteristic smoky flavour found in several Scotch whiskies. While only small quantities are used in production, the peatlands from which it is sourced are vital ecosystems.

According to the WWF, peatlands in the UK store more carbon than all of the country's forests combined, yet it is estimated that 80% of them are in a degraded state, releasing carbon into the atmosphere.

This investment aims to restore up to 3,000 hectares of this important landscape.

Diageo’s strategic investment in Scottish peatlands

In partnership with Caledonian Climate, Diageo will identify and co-fund projects to restore depleted peatlands. The goals of the partnership are to increase carbon storage, enhance biodiversity and improve water management.

Peat, a soil rich in organic matter accumulated over thousands of years, is critical for both the climate and the long-term sustainability of the Scotch whisky industry.

“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.

Ewan explains that peatlands also have an important role in water management, which secures the primary ingredient for Scotch whisky.

He adds: “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.”

Innovations in peat usage for sustainable whisky

Alongside the restoration programme, Diageo is re-evaluating its own use of peat in whisky production. Diageo is trialling new methods in its maltings operations to use peat more efficiently.

Since these trials began in spring 2024, a 5% reduction in peat required per tonne of malted barley has already been achieved.

Further explorations are underway into how peat smoke could be recirculated within maltings.

Diageo is also assessing the potential to use displaced peat from other sectors, such as from construction for electricity infrastructure, for use in Scotch whisky production.

These initiatives are part of a science-based strategy to optimise peat use, with Diageo intending to share its findings with the wider industry.

A collaborative approach to environmental stewardship

The five-year programme will be managed by Caledonian Climate and delivered with a range of partners, including scientific experts, landowners and NGOs. This collaborative approach is designed to accelerate peatland restoration at scale.

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

He adds: “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 practice and share learnings across the sector, advancing our collective understanding of peatland restoration whilst supporting nature recovery, water resilience and climate action.”

The project’s impact on carbon, water and biodiversity will be tracked with support from Wetlands International and other conservation groups.

All projects will prioritise co-funding, combining Diageo’s private investment with public funds like the Scottish Government’s Peatland Action Fund and initiatives with partners including the RSPB.

“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,” explains 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.”