Introduction
Climate change and its impacts are already being felt globally. The rising temperatures, shifting rainfall patterns, periods of drought, mean sea level rise and wildfires we are seeing today will occur more frequently in the future, becoming progressively more complex and disruptive.
In Scotland, over the last 30 years, we have seen average temperatures rise by 0.5⁰C, with the 10 warmest years on record having occurred since 1997 – four of which were in the last decade (2014, 2020, 2022, 2023). We have seen an increase in rainfall, with Scottish winters becoming 5% wetter; sea levels around the Scottish coast have increased by up to 3cm each decade.
The challenge presented by climate change – both today and in the future – emphasises that we must not only better understand the impact the climate is having on us, the way we work and live, but also the impact that we are having on the climate.
The Scottish National Investment Bank (The Bank) is a mission-led impact investor. Our missions have been set to address three grand challenges facing Scotland – the climate emergency, place-based opportunity, and how we harness innovative industries.
In 2023 we published our first Carbon Management Plan (CMP) which set out how we measure and report emissions associated with both our operations and our portfolio. Our CMP sets out our pathway towards net zero for our operations.
Through our CMP we are seeking to be transparent with regards to our portfolio emissions, acknowledging that it is unrealistic that our portfolio will ever be 100% net zero. While our investments are chosen to enable a transition in Scotland’s wider economy, our growth trajectory means it is likely that the aggregate emissions of our own investment portfolio will continue to increase. This is based on a reflection that, as a development bank, our investment is often in either heavy industries to enable a just transition through their changing role in the supply chain or developing technologies, or in companies who are scaling up their operations and outputs with the Bank’s investment acting as a catalyst for growth.
For example, our investments in ports and harbours will be carbon intensive through the heavy requirement of concrete and steel. These investments will, however, provide critical infrastructure necessary to support the offshore renewable wind sector and decommissioning of oil and gas, thereby creating the long-term impact for Scotland in support of net zero.
With this in mind, we acknowledge for any business to truly get to net zero, they must understand their impact on the climate, prioritise reducing emissions, and then ensure the environmental integrity of any offsets used to become net zero.
This document represents our first dedicated report highlighting how we are aligning with the recommendations and framework of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (“TCFD”). The portfolio emissions figures contained within this report are for the calendar year 2022.
