Scotland’s new Public Bank must be an ethical lender
MSPs will today (21/1/20) have a final vote on a bill to create a new public bank, the Scottish National Investment Bank. Following revisions by MSPs backed by environmental campaigners, the draft Bill requires the new Bank to invest in projects that promote social wellbeing and tackle the climate emergency. Today’s vote will determine whether the Bank will be required to set minimum ethical standards for its investments.
Minimum ethical standards will be crucial to ensuring the Bank is barred from investing in damaging projects such as fossil fuels, and would realise commitments from previous Scottish Government statements that the Bank would be an “ethical investor” and hold to the “principles of equality; transparency; diversity; and inclusion.” Leaving the door open for public money to be locked into polluting or unethical companies could undermine the Bank’s social and environmental objectives.
As well as setting minimum ethical standards, campaigners want to see MSPs vote for changes that require regular information to be published about its investments, common practice in the Norwegian Sovereign Wealth Fund, the European Investment Bank and Highlands and Islands Enterprise. They also demand a clear commitment that the Bank will not invest in fossil fuel projects
Friends of the Earth Scotland Campaigner Ric Lander commented,
“The Scottish National Investment Bank Bill now requires the Bank to target finance towards a just transition away from fossil fuels to help create a zero-carbon economy. That’s good news in the fight against the climate crisis, and a testament to the hard work by campaigners to get these commitments into legislation.
“Minimum ethical standards are essential to allay concerns that the Bank could invest in fossil fuel extraction, deforestation, plastic production and other projects that will push up climate emissions.
“MSPs can vote today to ensure that the Bank sets minimum ethical standards for their lending. As the Bank will be spending public money is only right that standards should be publicly available and open to scrutiny.
“The Scottish Government should also commit the Scottish National Investment Bank to explicitly rule out investing in fossil fuels. In the year that Scotland hosts the crucial UN climate talks, this would send a clear signal that as a country we are committed to transitioning beyond fossil fuels. Any ethical standards that permit lending to the oil industry aren’t worth the paper they’re written on.”
The European Investment Bank, the world’s largest public investor, stated it was phasing out investments in fossil fuels late in 2019. The Irish Parliament approved a Bill in 2018 to make the Irish Sovereign Wealth fund divest from fossil fuels.
If the Bill to create the Bank is passed on Tuesday, the next stage will be to get the Bank up and running, expected later this year.
Read our Briefing for MSPs at Stage 3 of the Scottish National Investment Bank Bill.
- Stage 3 of the Scottish National Investment Bank Bill will be debated on the afternoon of Tuesday 21 January
https://bb.parliament.scot/#20200121
https://www.parliament.scot/parliamentarybusiness/Bills/111153.aspx - Statements from the Scottish Government on the ethical position of the Bank:
Finance Minister Derek Mackay MSP (October 2019): “It will be an ethical investor supporting companies to grow and innovate, mission-focused to help our country transform.” https://www.commonspace.scot/articles/14809/derek-mackay-pledges-scottish-national-investment-bank-will-begin-operations-2020
Scot Gov Scottish National Investment Bank Factsheet “The Scottish Government is committed to ensure that the way the Bank operates – its culture, governance, and approach to businesses and individuals – will define it as an ethical, inclusive and trusted institution. The Bank will hold to the principles of equality; transparency; diversity; and inclusion.” https://www.gov.scot/binaries/content/documents/govscot/publications/factsheet/2019/05/a-national-investment-bank-for-scotland-factsheet/documents/a-national-investment-bank-for-scotland-information/a-national-investment-bank-for-scotland-information/govscot%3Adocument/SNIB%2Bfactsheet.pdf - The European Investment Bank, the world’s largest public investor, stated it was phasing out investments in fossil fuels late in 2019, and in 2018, the Irish Parliament approved a Bill to make the Irish Sovereign Wealth fund divest from fossil fuels.
https://www.bbc.co.uk/news/business-50427873
https://www.theguardian.com/environment/2018/jul/12/ireland-becomes-worlds-first-country-to-divest-from-fossil-fuels - Examples of public investors that publish their investments in full:
* European Investment Bank:
https://www.eib.org/en/efsi/efsi-projects/index.htm?q=&sortColumn=boardDate&sortDir=desc&pageNumber=0&itemPerPage=25&pageable=true&language=EN&defaultLanguage=EN&abstractProject=true&orabstractProject=true&yearFrom=2015&yearTo=2020&orCountries=true&orSectors=true
* Norwegian Sovereign Wealth Fund:
https://www.nbim.no/en/the-fund/holdings/holdings-as-at-31.12.2018/?fullsize=true
* Strathclyde Pension Fund:
https://www.spfo.org.uk/index.aspx?articleid=16962
* Highlands and Islands Enterprise:
https://www.hie.co.uk/about-us/policies-and-publications/our-funding-approvals/ - 23 MSPs from four parties, including former Government Ministers, have now pledged support for fossil free investment as part of the Friends of the Earth Scotland ‘Divest Scotland Campaign’
https://foe.scot/campaign/fossil-fuel-divestment/ - Friends of the Earth Scotland is:
* Scotland’s leading environmental campaigning organisation
* An independent Scottish charity with a network of thousands of supporters and active local groups across Scotland
* Part of the largest grassroots environmental network in the world, uniting over 2 million supporters, 75 national member groups, and some 5,000 local activist groups.