Securing green finance won’t cost the Earth - Myrtle Dawes
Green finance is regarded as a way of meeting the needs of environmentalism and for-profit business simultaneously while also promising more socially inclusive growth. In theory, this could create a ‘great green multiplier’ effect in which both the economy and the environment gain. More widely, there is a broad recognition that the net zero transition will be the economic opportunity of the 21st century, as highlighted in both Chris Skidmore’s independent review of Net Zero and the UK government’s Green Finance strategy.
At the Net Zero Technology Centre, our vision is for a net zero world powered by technology innovation. Scotland’s great tradition of innovation is alive in the familiar names of Scots whose inventions changed the world: James Watt and Alexander Graham Bell, Alexander Fleming and John Logie Baird. “Scotland invented the modern world!" is our claim to greatness built on generations past: we must now make sure we also invent the future world we want to live in. Countries that can harness the transformative power of innovation will thrive and become magnets for talent and investment, raising their citizens’ quality of life in the process.
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Hide AdWhen combined with leadership in finance as well as distinctive strengths in ESG Asset Management, fintech, energy, pioneering universities and the legacy of hosting COP26 in Glasgow, there is a real opportunity for Scotland to become internationally renowned as a global hub for green finance. The process is already in motion: last year, Edinburgh climbed eight places to reach 14th position in the Z/Yen Global Green Finance Index. London remains number 1, highlighting the UK's global strength as a green finance centre. Now is the time for the UK to build on that leadership.


However, we need not only pioneers to create green technologies but also the right support structure to propel them to commercial success. Net zero investment needs to be urgently catalysed to support green economic growth, which will only be achieved if the government works with the private sector to unlock the markets of tomorrow. Giving investors confidence means providing certainty and consistency in policy, suitable incentives and strategic public investment in the most critical sectors for decarbonisation – including decarbonising hard to abate sectors, turning them from brown to green.
A further necessary condition of success is understanding that developing new technology takes time. While the International Energy Agency estimates that, by 2050, 35 per cent of the projected global greenhouse gas abatement requirements will need to come from new technologies that are currently not commercially available, nascent technology struggles to secure funding and, even when it does, development to commercial readiness can take time. Patient capital is required.
The Scottish Government’s three programmes that underpin its green finance policy – the Scottish National Investment Bank, the Green Investment Portfolio and the Global Capital Investment Plan – provide a good base from which to build further. We also welcome the inclusion of energy transition in the 10-year National Innovation Strategy as one of the four innovation themes on which future activity will focus, acknowledging the existing competitive advantage of this key market.
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Hide AdAt UK government level, its 2023 Green Finance Strategy reports that we are now seeing a step-change in investment, with annual investment in low carbon sectors more than doubling in real terms over the preceding five years. Since 2010, the UK has seen £198 billion of investment into low carbon energy, through a mixture of government funding, private investment and levies on consumer bills. However, decarbonising by 2050 will demand a further change in gear. The global transition to a net zero economy will see trillions of pounds reallocated and invested into new technologies, services and infrastructure.


Scotland could once again be known as one of the most innovative countries in the world, providing solutions to global problems and punching above its weight in leading the transition to net zero. The investment needed is huge, the scale of the challenge daunting, but the opportunity is rich. Our ability to exploit the new Green Industrial Revolution will depend on our readiness to finance it. By rising to the challenge, we can inspire people with positive change – a core value of ours at the Net Zero Technology Centre. Whether we can live up to our ambition remains to be seen: what we now know for sure is that the costs of inaction are significantly higher.
Myrtle Dawes, CEO of the Net Zero Technology Centre
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