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Scottish National Investment Bank

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Policy Core Brief

Details Project Name Scotland’s National Investment Bank – Scottish Government Project Lead Paul Bradley Start Date 1st October 2018 Completion Date 31st October 2018 Background The Programme for Government 2017-18 committed to establish a Scottish National Investment Bank. An Implementation Plan was published in February 2018 setting out a strategic blueprint for the Bank as an institution. The Government accepted the Implementation Plan’s 21 recommendations and that approach was endorsed by the Parliament in May 2018.

This consultation will focus on the Bank’s objectives, purpose and governance, as well as its relationship with Ministers and stakeholders. These issues amongst others will inform further conversations with key stakeholders and responses to the consultation will help to shape the Bank’s Articles of Association and what is set out in the draft Bill and accompanying documents. The Bill will be brought forward in early 2019. Matching SCVO Policy Objectives Third sector voice (Promote): Ensuring the third sector policy voice is heard and creates change in society and public services; Developing and promoting a new narrative that repositions the third sector in Scotland ⎯ Promoting Sustainable Development Goals as a framework for sustainable finance. ⎯ Promoting open government to deliver appropriate governance, sector representation and financial transparency ⎯ Promoting equalities (Inc. gender), low-carbon economy and human rights approach. Third sector futures (Develop): Supporting sector to adapt to the shifts in the future landscape ⎯ Developing opportunities for new forms of finance ⎯ Developing third sector approach to gender, just transition and new funding models. Foundations of policy approach - values Sustainability Capital lending criteria that seeks to progress the Sustainable Development Goals and can be tracked through indicators and outcomes. Equalities Finance that seeks to address entrenched inequality in Scottish economy, recognising marginalised groups & gender-competency. Wellbeing Ethical financing that does not only measure performance on economic growth but also national and regional wellbeing. Openness A strong banking institution where the public understand where money flows and why financing decisions have been taken. Policy Vision To establish in the minds of Government and enterprise the view that at National Investment Bank should promote sustainable finance that can accelerate the transition to a zero-carbon economy where the benefits are realised across all groups in Scottish society. Policy Goals

1

Objectives & Vision: Sustainable Development Goals as a framework for SNIB investment 2 Climate change: SNIB Investments are focused on Just Transition to Zero-Carbon Economy 3 Inequalities: Humanising national investment through gendered approach 3 Decent Work: Investment aligned with projects that adhere to fair work 4 Aligned with the principles of financial transparency with third sector involvement Deliverables Delivered by Key activity Deliverable Completion date Paul Research and policy approach Next steps agreed internally and shared with those involved w/c 1st October Paul First draft response Next steps agreed internally and shared with those involved w/c 1st October Paul Listening to sector stakeholders Next steps agreed and fed back to group w/c 8th October Paul Input from SCVO team Email sent to key groups. Follow-up where necessary. Deadline end of w/c 8th October Paul Second draft response First draft of blog ready to be shared with equal bite team w/c 8th October Paul Listening to sector stakeholders Statements received by Students’ Association w/c 15th October Paul Final draft response First draft of blog ready to be shared with equal bite team w/c 23rd October Stakeholders Stakeholder Role Engagement and communication Policy/PA Team Participants Policy approach on SNIB Third Force News Participants Article on SNIB Communications Participants Social/Blog on SNIB Anna Fowlie

Sign-off response E




















Scottish Government consultation on the Scottish National Investment Bank

SCVO response to Scottish Government

04 October 2018 This version is first draft

Our position

Our response

SCVO welcomes the opportunity to respond to this consultation, and wishes to contribute the following:

Objectives, purpose and vision

n all of its activities has been pivotal in setting the tone for the development of the sector.

The Scottish National Investment Bank provides the opportunity for Scotland to establish itself as a global leader in moving to a modern economy built on sustainable finance to accelerate the transition to a zero-carbon economy where the benefits are realised across all groups in Scottish society. We advocate an approach that will lead to a mission-led SNIB focused on providing the capital required support the Just Transition towards equality, wellbeing and sustainability throughout the regions of Scotland whilst adhering to international standards of financial transparency.

The Scottish Governmen Policy Core Brief

Details Project Name Scotland’s National Investment Bank – Scottish Government Project Lead Paul Bradley Start Date 1st October 2018 Completion Date 31st October 2018 Background The Programme for Government 2017-18 committed to establish a Scottish National Investment Bank. An Implementation Plan was published in February 2018 setting out a strategic blueprint for the Bank as an institution. The Government accepted the Implementation Plan’s 21 recommendations and that approach was endorsed by the Parliament in May 2018.

This consultation will focus on the Bank’s objectives, purpose and governance, as well as its relationship with Ministers and stakeholders. These issues amongst others will inform further conversations with key stakeholders and responses to the consultation will help to shape the Bank’s Articles of Association and what is set out in the draft Bill and accompanying documents. The Bill will be brought forward in early 2019. Matching SCVO Policy Objectives Third sector voice (Promote): Ensuring the third sector policy voice is heard and creates change in society and public services; Developing and promoting a new narrative that repositions the third sector in Scotland ⎯ Promoting Sustainable Development Goals as a framework for sustainable finance. ⎯ Promoting open government to deliver appropriate governance, sector representation and financial transparency ⎯ Promoting equalities (Inc. gender), low-carbon economy and human rights approach. Third sector futures (Develop): Supporting sector to adapt to the shifts in the future landscape ⎯ Developing opportunities for new forms of finance ⎯ Developing third sector approach to gender, just transition and new funding models. Foundations of policy approach - values Sustainability Capital lending criteria that seeks to progress the Sustainable Development Goals and can be tracked through indicators and outcomes. Equalities Finance that seeks to address entrenched inequality in Scottish economy, recognising marginalised groups & gender-competency. Wellbeing Ethical financing that does not only measure performance on economic growth but also national and regional wellbeing. Openness A strong banking institution where the public understand where money flows and why financing decisions have been taken. Policy Vision To establish in the minds of Government and enterprise the view that at National Investment Bank should promote sustainable finance that can accelerate the transition to a zero-carbon economy where the benefits are realised across all groups in Scottish society. Policy Goals

1

Objectives & Vision: Sustainable Development Goals as a framework for SNIB investment 2 Climate change: SNIB Investments are focused on Just Transition to Zero-Carbon Economy 3 Inequalities: Humanising national investment through gendered approach 3 Decent Work: Investment aligned with projects that adhere to fair work 4 Aligned with the principles of financial transparency with third sector involvement Deliverables Delivered by Key activity Deliverable Completion date Paul Research and policy approach Next steps agreed internally and shared with those involved w/c 1st October Paul First draft response Next steps agreed internally and shared with those involved w/c 1st October Paul Listening to sector stakeholders Next steps agreed and fed back to group w/c 8th October Paul Input from SCVO team Email sent to key groups. Follow-up where necessary. Deadline end of w/c 8th October Paul Second draft response First draft of blog ready to be shared with equal bite team w/c 8th October Paul Listening to sector stakeholders Statements received by Students’ Association w/c 15th October Paul Final draft response First draft of blog ready to be shared with equal bite team w/c 23rd October Stakeholders Stakeholder Role Engagement and communication Policy/PA Team Participants Policy approach on SNIB Third Force News Participants Article on SNIB Communications Participants Social/Blog on SNIB Anna Fowlie

Sign-off response E




















Scottish Government consultation on the Scottish National Investment Bank

SCVO response to Scottish Government

04 October 2018 This version is first draft

Our position

Our response

SCVO welcomes the opportunity to respond to this consultation, and wishes to contribute the following:

Objectives, purpose and vision

n all of its activities has been pivotal in setting the tone for the development of the sector.

The Scottish National Investment Bank provides the opportunity for Scotland to establish itself as a global leader in moving to a modern economy built on sustainable finance to accelerate the transition to a zero-carbon economy where the benefits are realised across all groups in Scottish society. We advocate an approach that will lead to a mission-led SNIB focused on providing the capital required support the Just Transition towards equality, wellbeing and sustainability throughout the regions of Scotland whilst adhering to international standards of financial transparency.

The Scottish Government’s proposals for the bank’s objectives do not mention inequalities and carbon emissions, which we feel should be written into these objectives. Decarbonising the economy, promoting wellbeing and reducing inequalities should be the main focus of the bank. However, it is unclear how the wider societal aims of advancing wellbeing and a sustainable, inclusive society will be fulfilled when economic growth is seen as the long-term aim of the bank that will act wholly commercially in the investment life-cycle.

For the Scottish economy to truly become sustainable, we need the field of Scottish finance to commit to change and embed sustainability into strategy and operations. The bank should draw on local experience in the field of sustainable finance to adopt lending criteria outcomes and indicators that ensure that the flow of investments link to key public policies that support a sustainable Scotland.

Investment houses such as Aberdeen Standard are already moving towards funds that underpin the UN Sustainable Development Goals, which range from gender equality, to peace, justice and strong institutions, education and reduced inequalities. The Scottish Government has also recently aligned its National Performance Framework with the SDGs. This provides an ideal eco-system for the bank to adopt objectives and a vision that ensures all investments contribute towards the SDGs, whilst maintaining its independence from the Scottish Government as a wholly commercial bank. This approach would also address concerns relating to commercially viable projects from an economic growth perspective that undermine the values of sustainability, wellbeing and equality.

Transitioning to Zero-Carbon

We welcome the proposal for decarbonising the economy as one of three missions of the bank and call for the bank to commit to financing only those projects that clearly intend to contribute to the transition to a zero-carbon economy. By aligning lending criteria to the Sustainable Development Goals, the integrity of the bank is strengthened through contributing to the Scottish Government’s climate reduction plans and the forthcoming Just Transition Commission.

We support the proposal to integrate existing infrastructure funds – such as the Building Scotland Fund – into the bank to simplify and enable all future national infrastructure projects on housing, heating, electricity and transport to help build Scotland’s zero-carbon economy. Activity of the bank should be part of a joined up economic strategy that puts tackling climate change and reducing inequalities at its heart and anticipate the future direction that will be set by the Just Transition Commission.

Providing finance for transformational technologies to reduce carbon emissions should be a key mission of the bank, as too should the financing of community specific projects that often require small amounts of finance but struggle to find the funds. For example, The Scottish Government’s vision for a mostly decarbonised heat sector by 2050 could be supported by financing micro and community power generation to support the rapid move away from natural gas heating and subsequently boost local energy economies. This would support the bank’s objective of regional cohesion. Other areas include increasing wind power, investing in sustainable public transport and investing in the renewables manufacturing industry to support the decline in jobs in North Sea oil.

Equalities competent

Reducing inequalities is at the heart of the Sustainable Development Goals, and the National Investment Bank’s governance and lending criteria must support a move to financing projects that reflect Scotland’s diversity and are genuinely based on tackling the inequalities in Scotland’s’ economy. It is essential that the Bank adopts a mind-set that delivers new opportunities for groups that evidence shows have less capital and lift the constraints on realising the full potential of those marginalised from existing arrangements.

A key test of whether the bank can fulfil this equalities mission will be how it supports gender equality, a key priority of the Scottish Government and a specific UN Sustainable Development Goal based on clear and mounting global evidence that gender equality is good for sustainable growth. Engender Scotland, the Scottish Women's Budget Group, Close the Gap, and Women's Enterprise Scotland, have produced seven principles which we support and are vital for creating a gender-competent national investment bank. It is vital that the government works closely with key stakeholders to ensure the right governance framework is legislated for to address the priority areas and persisting gaps in gender equality across Scotland’s economy.

Inclusive labour market

Lending criteria of the bank should contribute to a shift in our approach towards person-centred and human rights based labour market that genuinely help individuals into sustainable and meaningful employment. We advocate this approach to empower people to participate in society as articulated by the SDG on good and productive employment.

The bank should commit to financing only those projects that pay the living wage, support those living in deprived areas and offer training opportunities that support the wider societal aim of social inclusion. This approach would uphold people’s rights to equality of opportunity, inclusion and accessibility in Scotland’s labour market. 

An equalities competent National Investment Bank rests on an appetite to shift our approach to valuing the contribution each of us can make to Scottish society beyond what is viewed as regular employment. Scotland’s National Investment Bank should contribute to a strategic and better connected Scottish approach to supporting all people to participate in a society that is personalised to what they need and what they can offer, from long-term care and child care to volunteering. Innovative and creative investment in this infrastructure is crucial for Scotland’s growth and wellbeing.

Open governance

Scotland’s National Investment Bank needs to position itself so that it works with people and communities to remove the barriers and structures that prevent a just transition to a sustainable Scottish economy. The highest levels of transparency and governance must be a part of this approach and build on the Scottish Government’s commitment to financial transparency in its Open Government Action Plan. The National Investment Bank must adopt participative and open governance to make sure the benefits are realised across all groups in Scottish society. Not only should the Bank’s governing body include representation from civil society, it must involve those that are traditionally marginalised from financial decision making. This should also apply to the composition of the Advisory Group that will contribute to the development of the Bank. It is vital that An open lending process for the Bank is paramount for articulating a clear view of why certain lending decisions are made. Straightforward, transparent and accessible presentation of this information could lead to more support of public spending in Scotland and result in greater confidence and trust in the Scottish Government’s £2 billion in funding in will provide over the next ten years. This should also cover how public funding has been spent by recipients of capital and the evaluation of its success. Enabling people and communities to participate in this process is key to adopting an impact assessment with integrity. omes and indicators that ensure that the flow of investments link to key public policies that support a sustainable Scotland.

Investment houses such as Aberdeen Standard are already moving towards funds that underpin the UN Sustainable Development Goals, which range from gender equality, to peace, justice and strong institutions, education and reduced inequalities. The Scottish Government has also recently aligned its National Performance Framework with the SDGs. This provides an ideal eco-system for the bank to adopt objectives and a vision that ensures all investments contribute towards the SDGs, whilst maintaining its independence from the Scottish Government as a wholly commercial bank. This approach would also address concerns relating to commercially viable projects from an economic growth perspective that undermine the values of sustainability, wellbeing and equality.

Transitioning to Zero-Carbon

We welcome the proposal for decarbonising the economy as one of three missions of the bank and call for the bank to commit to financing only those projects that clearly intend to contribute to the transition to a zero-carbon economy. By aligning lending criteria to the Sustainable Development Goals, the integrity of the bank is strengthened through contributing to the Scottish Government’s climate reduction plans and the forthcoming Just Transition Commission.

We support the proposal to integrate existing infrastructure funds – such as the Building Scotland Fund – into the bank to simplify and enable all future national infrastructure projects on housing, heating, electricity and transport to help build Scotland’s zero-carbon economy. Activity of the bank should be part of a joined up economic strategy that puts tackling climate change and reducing inequalities at its heart and anticipate the future direction that will be set by the Just Transition Commission.

Providing finance for transformational technologies to reduce carbon emissions should be a key mission of the bank, as too should the financing of community specific projects that often require small amounts of finance but struggle to find the funds. For example, The Scottish Government’s vision for a mostly decarbonised heat sector by 2050 could be supported by financing micro and community power generation to support the rapid move away from natural gas heating and subsequently boost local energy economies. This would support the bank’s objective of regional cohesion. Other areas include increasing wind power, investing in sustainable public transport and investing in the renewables manufacturing industry to support the decline in jobs in North Sea oil.

Equalities competent

Reducing inequalities is at the heart of the Sustainable Development Goals, and the National Investment Bank’s governance and lending criteria must support a move to financing projects that reflect Scotland’s diversity and are genuinely based on tackling the inequalities in Scotland’s’ economy. It is essential that the Bank adopts a mind-set that delivers new opportunities for groups that evidence shows have less capital and lift the constraints on realising the full potential of those marginalised from existing arrangements.

A key test of whether the bank can fulfil this equalities mission will be how it supports gender equality, a key priority of the Scottish Government and a specific UN Sustainable Development Goal based on clear and mounting global evidence that gender equality is good for sustainable growth. Engender Scotland, the Scottish Women's Budget Group, Close the Gap, and Women's Enterprise Scotland, have produced seven principles which we support and are vital for creating a gender-competent national investment bank. It is vital that the government works closely with key stakeholders to ensure the right governance framework is legislated for to address the priority areas and persisting gaps in gender equality across Scotland’s economy.

Inclusive labour market

Lending criteria of the bank should contribute to a shift in our approach towards person-centred and human rights based labour market that genuinely help individuals into sustainable and meaningful employment. We advocate this approach to empower people to participate in society as articulated by the SDG on good and productive employment.

The bank should commit to financing only those projects that pay the living wage, support those living in deprived areas and offer training opportunities that support the wider societal aim of social inclusion. This approach would uphold people’s rights to equality of opportunity, inclusion and accessibility in Scotland’s labour market. 

An equalities competent National Investment Bank rests on an appetite to shift our approach to valuing the contribution each of us can make to Scottish society beyond what is viewed as regular employment. Scotland’s National Investment Bank should contribute to a strategic and better connected Scottish approach to supporting all people to participate in a society that is personalised to what they need and what they can offer, from long-term care and child care to volunteering. Innovative and creative investment in this infrastructure is crucial for Scotland’s growth and wellbeing.

Open governance

Scotland’s National Investment Bank needs to position itself so that it works with people and communities to remove the barriers and structures that prevent a just transition to a sustainable Scottish economy. The highest levels of transparency and governance must be a part of this approach and build on the Scottish Government’s commitment to financial transparency in its Open Government Action Plan. The National Investment Bank must adopt participative and open governance to make sure the benefits are realised across all groups in Scottish society. Not only should the Bank’s governing body include representation from civil society, it must involve those that are traditionally marginalised from financial decision making. This should also apply to the composition of the Advisory Group that will contribute to the development of the Bank. It is vital that An open lending process for the Bank is paramount for articulating a clear view of why certain lending decisions are made. Straightforward, transparent and accessible presentation of this information could lead to more support of public spending in Scotland and result in greater confidence and trust in the Scottish Government’s £2 billion in funding in will provide over the next ten years. This should also cover how public funding has been spent by recipients of capital and the evaluation of its success. Enabling people and communities to participate in this process is key to adopting an impact assessment with integrity.

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