Scotland is a natural home for green finance and working together with the City, we can achieve our net zero ambitions, says Chris Hayward
With COP29 just over a month away, attention is turning back to the progress the UK has made towards its net zero targets. The City of London has been at the forefront of the green finance revolution, and it’s encouraging to see Scotland also making significant strides in becoming a leader in sustainable finance.
A recent report by the Scottish Taskforce for Green and Sustainable Financial Services highlights Scotland’s potential as a natural home for green and sustainable finance, supported by its strong foundations — an ecosystem of businesses, energy and technical experts and specialist firms across various sectors. It was fitting that Scotland hosted COP26, the ‘Finance COP’, where critical steps were taken to deploy financial resources to combat climate change.
The report outlines key and timely recommendations, including the further development of the annual Green Finance Summit to attract more investors and the possibility of establishing an industry-led green and sustainable finance institute.
This will be a key theme of my visit this week as I travel to Edinburgh and Dundee. Like London, Scotland is a major financial hub, and Edinburgh, in particular, is a world leader in fintech —boasting one of the largest fintech clusters in Europe with over 220 firms. By combining the technological capabilities of our cities, we can drive forward a greener future.
In order to drive forward that greener future, the Square Mile has committed to achieving net zero carbon emissions from its own operations by 2025 and across its investments and supply chain by 2040.
A critical element of creating a sustainable future is retrofitting existing buildings rather than constructing new ones, as demolishing structures releases far more carbon. In our role as planning authority, we take a holistic carbon reduction approach and have introduced carbon options guidance, which requires developers to explore the lowest-carbon options for any new scheme.
Last year in the City, we approved 17 major retrofit planning applications, and we hope to see this number grow. Retrofitting buildings in the City of London will save tens of thousands of tons of carbon. Just three years ago, major retrofit applications accounted for 8 per cent of the total; last year, they made up more than half. Sustainable, flexible office spaces, like those that attracted major firms such as HSBC, are crucial to creating a future-fit business environment. We are eager to share our experiences with our Scottish colleagues.
Shared ambitions
Our shared ambitions are reflected in the partnership agreement between the Scottish Government and the City of London Corporation, which I was honoured to sign alongside the First Minister at this year’s Burns Night celebration.
Collaboration is essential to driving meaningful change. Partnerships between businesses and government, particularly at the local level, are key.
This partnership aims to strengthen our collective green and sustainable financial services, foster the exchange of best practices and, most importantly, drive more investment into the economy. Scotland already attracts the highest amount of foreign direct investment outside of London, employing more than 10,000 people in financial and professional services sectors.
Attracting foreign investment is a priority for the government, as shown by the upcoming International Investment Summit later this month.
By focusing on partnerships, exchanging best practices, and building sustainably, we can deliver retrofit projects at scale, ensuring our cities remain vibrant, resilient, and sustainable for the future.
Chris Hayward is policy chairman at the City of London Corporation