The Scottish Government’s new Scottish National Investment Bank has begun lending to the private sector despite not yet having confirmed any ethical standards or missions, both of which are required by law.

Its first investment, “MSquared”, provides products to the defence and fossil fuel industries. MSquared’s website states “Our tools have been used in a wide range of sectors, from frontier science to space, defence, oil and gas, healthcare and food and drink.” (1)

In announcing the investment the Scottish Government did not state whether public funds would support the defence or fossil fuel elements of the company’s operations. (2)

The Scottish Government has said the Scottish National Investment Bank will address the climate crisis and invest ethically.

Friends of the Earth Scotland was shown a draft of the Bank’s ethical standards in October 2019 but the document remains unpublished. An ethical policy is required by law, following amendments to the SNIB Bill supported by MSPs in the Spring. Without a publicly available ethical policy checks and balances to ensure the Bank invests for the public good are limited.

The SNIB is also required to have public “missions”, but these have not yet been confirmed.

The Bank’s chair Willie Watt has a background in private finance with no prior experience working for public investment bodies. Questions were raised about the lack of ethical scrutiny for his appointment. (3)

Ric Lander, Friends of the Earth Scotland said:

“The Scottish Government has promised their new public bank will invest ethically to cut climate pollution and provide green jobs. With no ethical standards published and missions not yet approved by Parliament the SNIB appears to be spending cash before it has its house in order.

“Despite lending having begun, we can’t yet say whether the SNIB is an ethical or green bank.

“The public deserves to know where the line is drawn, to know that public money will not fund disastrous projects like Arctic oil drilling, nuclear weapons or fracking.”

“With the economy and people’s lives in such turmoil due to the Coronavirus pandemic, public investment is of critical importance to all our futures.

“The Scottish National Investment Bank could shape our economy to build back better tackling fuel poverty, creating new renewables supply chain jobs, decarbonising our heating and financing zero carbon transport.

“The Scottish Government must evidence investment in zero-carbon companies and publish its ethical standards so the public can trust that the Bank is working for the benefit of people and planet, as it was intended to do.”

Notes to Editors

(1) “Our tools have been used in a wide range of sectors, from frontier science to space, defence, oil and gas, healthcare and food and drink.”

(2) Scottish Government press release

(3) https://www.heraldscotland.com/news/18688479.nicola-sturgeon-signed-off-unregulated-state-bank-appointment-conflict-interest-scandal-exec/