Climate focus for new Investment Bank, but no ethical standards yet
Lawmakers in the Scottish Parliament made changes to the Scottish National Investment Bank Bill today that require it to finance climate action and a just transition, which would shift the economy away from fossil fuels. Additionally, environmental and social outcomes have now been prioritised alongside economic growth. (1)
However, MSPs on the Economy, Energy and Fair Work Committee failed to set minimum ethical standards for projects the Bank lends to, leaving the door open for the Bank to invest in climate-wrecking and unsustainable companies.
Friends of the Earth Scotland Campaigner Ric Lander commented,
“The breakdown of our climate is destroying lives and whole communities right now, and this won’t change until countries like ours prioritise finance for climate action and green jobs over dirty fossil fuels.”
“The Scottish National Investment Bank can play an important part in financing a just transition to a zero-carbon economy. It is great that MSPs backed amendments that make that a legal requirement on the Bank.
“However without a credible ethical investment framework in law, Scottish citizens will rightly remain concerned that their new public bank could invest in fossil fuel extraction, illegal logging, plastic production and other projects that will push up climate emissions.
“Before the Bill finally passes MSPs and the Scottish Government must do what they can to commit Scotland’s new public bank to be totally fossil free, following the example set by the Irish Sovereign Wealth Fund and the European Investment Bank.”
Last week the European Investment Bank, the world’s largest public investor, stated it was phasing out investments in fossil fuels. In 2018, the Irish Parliament approved a Bill to make the Irish Sovereign Wealth fund divest from fossil fuels. (2)
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’. (3)
The next stage for the Bill is a vote by the full Scottish Parliament and debate of further amendments, expected later this year.
Notes to Editors
(1) Scottish National Investment Bank Bill was heard at Stage 2 on Tuesday 19 November 2019 by the Economy, Energy and Fair Work Committee. Following amendments the revised Bill gives the Bank the following “ancillary objectives”:
* “promote environmental wellbeing, and in particular, support the transitions required to meet the net-zero emissions target (as defined in section A1 of the Climate Change (Scotland) Act 2009) and circular economy initiatives under section 35(13) of that Act” (Amendments 4 and 4A)
* “promoting the just transition principles (as defined in section 35C of the Climate Change (Scotland) Act 2009)” (Amendment 26)
* “contributing to the achievement of the Scottish Government’s economic, social and environmental policy objectives.” (Amendment 58)
Amendments 33, 20 and 38 and 39 to include ethical investment in the Bill all fell.
Friends of the Earth Scotland’s briefing for MSPs ahead of the debate is available at: https://foe.scot/resource/scottish-national-investment-bank-stage-2-briefing/
Friends of the Earth Scotland has long campaigned for banking reform, including proposing a Scottish National Investment Bank in 2016. Thousands of our supporters have joined calls for the SNIB to finance the Just Transition to a zero-carbon economy in Scotland.
(2) European Investment Bank phasing out fossil fuels: https://www.bbc.co.uk/news/business-50427873
The Irish Sovereign Wealth Fund committed to divest from fossil fuels in 2018: https://www.theguardian.com/environment/2018/jul/12/ireland-becomes-worlds-first-country-to-divest-from-fossil-fuels
(3) 23 MSPs have pledged the following: “I pledge to support the Scottish Government and Parliament divesting from fossil fuels and investing in a just transition to a zero carbon economy over an appropriate time-scale.” See list of signatories: https://foe.scot/campaign/divestment/commitments/
(4) 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.