Company Commentary: How Scotland’s Financial Services Industry Can Lead the Green Revolution
For businesses across Scotland it has been a time of upheaval, priorities have shifted and models have adapted under extreme pressure. And yet, through this unprecedented difficulty, there remains an opportunity.
Glasgow had the privilege of hosting world leaders for the COP26 summit in the fall and the scale of the climate challenge we all face has been laid bare. Since the conference, we have waited to see whether two weeks of lively deliberation and discussion would be offset by the light of meaningful and long-term action by governments around the world.
There have been signs of intent that inspire optimism. The Chancellor used his platform at COP26 to announce a series of measures to reposition the UK as the world’s first net zero aligned financial center. This is a welcome intervention that reflects SFE’s clear ambition to make Scotland a global center for green finance, as highlighted in our new strategy released earlier this year.
Scotland has a unique opportunity to be at the forefront of this ambition. Financial services and energy are the two most important sectors in Scotland according to GVA, employing around 375,000 people between them.
We have enviable tools in both sectors; a world-class talent pool supporting a globally recognized business environment supported by a pioneering entrepreneurial spirit. On top of that, we have the capacity of our world-class universities and colleges, and an exceptional professional services ecosystem.
These are extremely powerful ingredients for success and we must all harness them to the fullest if we are to continue to create long-term sustainable growth in the low-carbon economy.
This is particularly compelling for the North East of Scotland, which has the ability to harness 40 years of experience in developing a world-class oil and gas industry and use it to reposition itself as the net zero energy capital of Europe.
The scale of the opportunity for the energy transition is enormous. To take just one example, the Scottish government will announce in January the successful bidders for Scotwind, the commercial offshore wind lease tour. These will generate 11 gigawatts of electricity, including one gigawatt of floating wind power by 2030.
Ports across Scotland, including Aberdeen, will have the opportunity to fabricate, fabricate and maintain the structures to support this massive enterprise which in turn will create billions of pounds of investment and the creation of jobs and sustainable growth. long-term.
Of course, accelerating these types of developments requires unlocking private sector investment and the financial services sector is also at a crossroads in terms of environmental commitments. It faces pressure from customers, shareholders, regulators and the general public to play its role in accelerating a just transition. There is a window of opportunity to seize the initiative and SFE will approach the year with real impetus, seeking precisely to do so with two initial priorities.
First, we aim to bring together leaders from the Scottish energy and financial services sectors for a spring summit. Through collaboration with the energy sector, we can serve as a bridge between the wider industry and Scotland’s natural resources to identify and fund carbon offsetting opportunities. We can align long-term capital pools with green projects to facilitate innovative investment opportunities, and we can pave the way for transparent disclosure on climate risks and alignment of climate requirements and standards. data across the industry.
Second, SFE has proposed to the UK government to create a financial services forum between Scotland and London. This forum would have senior and senior UK civil servants representation reflecting the existing working model we have with the Scottish Government through quarterly meetings of the Financial Services Advisory Board which is to be relaunched in the coming weeks.
These are important steps in our clear desire to work more closely with government for the benefit of our members, the industry in general, and the communities we represent.
This does not mean that we will always agree with the decisions made by the two governments. But, through these forums, we will create a channel of formal and regular dialogue where the views and priorities of industry and government can be shared, discussed and acted upon. The challenges we face are complex and the best approach is to work together on solutions.
High on the agenda for our engagement with the two governments in 2022 will be exploring ways to accelerate Scotland’s leadership role in green finance. Much more work is needed to ensure that we step up our efforts and continue to meet the net zero goals and the next stage of our national economic development must be transformational, taking full advantage of our key industries, assets and markets. our natural resources.
The race for net zero has begun. SFE is determined to put Scotland ahead of the pack.
– Sandy Begbie CBE, Managing Director of Scottish Financial Enterprise (SFE)