Scotland can become a “true global contender” in the race to capture the economic opportunities from growth in green and sustainable financial services internationally, Kate Forbes has declared.

The Deputy First Minister observed Scotland was “one of the world’s oldest financial centres”, as she underlined the potential for this sector to benefit from “enormous investment that will flow into net-zero projects and assets” at home and abroad.

Ms Forbes was responding to a taskforce report, which will be published today and recommends actions including working with the City of London Corporation to “locate sustainable finance activity to Scotland” and looking at new ways to attract more financial institutions to “build their sustainable and green businesses in Scotland”.

The report, which will be launched by Ms Forbes at the Ethical Finance Global 2024 summit in Edinburgh today, also recommends collaboration across sectors and academia to support the upskilling of Scotland's workforce in sustainable finance.

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David Pitt-Watson, chair of the Scottish taskforce for green and sustainable financial services, flags a “huge opportunity” for Scotland’s financial services industry to “serve the world” and “profound benefit” if this can be seized.

In the Scottish Government’s response to the taskforce’s report, which is also published today, Ms Forbes says: “The recently published green industrial strategy has a clear overarching aim: to help Scotland realise the economic benefits of the global transition to net zero. There are few areas of greater competitive advantage and potential than green and sustainable financial services. Set in this context, it is with particular pleasure and optimism that I welcome the report of Scotland’s taskforce for green and sustainable financial services.”

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She notes the Scottish Government and the Global Ethical Finance Initiative launched the taskforce in 2022 to “examine important questions, such as: ‘How could Scotland’s financial services industry leverage the enormous investment that will flow into net-zero projects and assets, both here and abroad, to build up a green financial services cluster?’, and, ‘How do we maximise the potential for skilled jobs, growth and exports?’”.

Ms Forbes adds: “We knew that Scotland could be a natural home for green and sustainable finance because the foundations are strong - in Scotland, large financial institutions are clustered alongside professional services firms, energy and technical experts, and specialist businesses across a range of disciplines. The world saw in Glasgow [in] 2021 that Scotland had both a progressive energy and climate-change policy at home, and the convening power to deliver real advances on climate finance on the global stage.”

Describing the final report of the taskforce as “impressive”, she declares that it “sets out a framework of recommendations that will help Scotland become a true global contender in the race to capture the economic opportunities that the growth in green and sustainable financial services presents”.

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The report from the taskforce, in which Scottish Financial Enterprise is also involved as an industry partner, makes 31 recommendations on how the public and private sectors can work together to encourage and fund green investments.

It emphasises the Scottish finance industry is particularly well placed to seize the opportunities presented by the “just transition” and identifies four areas for action: policy, promotion, investment and skills.

Ms Forbes, who is also Cabinet Secretary for Economy and Gaelic, said: “This report is a decisive action plan as we seek to make Scotland the natural home for green and sustainable finance.

“The financial services sector is key to delivering the benefits of the just transition and we will use this route map to work together and ensure that Scotland - one of the world’s oldest financial centres - is able to maximise the opportunities ahead of us."

Business and social entrepreneur Mr Pitt-Watson said: “Climate may be the greatest challenge facing humankind. Addressing it will require a huge investment and the services of the finance industry. Finance is a jewel in Scotland’s industrial crown. So not only should there be many opportunities for green investment in Scotland, from wind to housing, there is also a huge opportunity for its financial services industry to serve the world.

“The taskforce has already stimulated a considerable amount of action. And there is so much more to do. This report is a strategy for Scottish finance to play its proper role in addressing the climate challenge.”

Mr Pitt-Watson says in the report: “Finance - quite as much as electricity or battery or wind power - is a critical enabling industry for the just transition.

“Without finance, it is difficult to see how climate change can be addressed. So, this is a huge opportunity for financial institutions which have the appropriate skills to encourage and fund profitable green investments. They can do well by doing good, and we will all prosper. The Scottish finance industry is particularly well placed to seize that opportunity.

“If it can do so, it will be of profound benefit. It will help address humankind’s greatest challenge, it will help build a new infrastructure in Scotland, and of course it will strengthen, focus, and expand the Scottish finance industry itself. This is an industry at which Scotland excels, generating 9.6% of the country’s gross value added, with skilled jobs which pay a third higher than the average wage in Scotland.”