A new public bank for Scotland was formally established yesterday (January 21) and made a legal obligation to have ethical standards for its investments.
MSPs voted for a government amendment which puts a legal obligation on the bank to have a minimum ethical standard for its investment.
They also agreed to changes which will ensure that the bank will finance the transition away from fossil fuels in order to help create a zero-carbon economy.
In March 2019, BankTrack, a non-government organisation revealed that 33 global banks have financed the fossil fuel industry with $1.9 trillion since the Paris Climate Agreement in 2015.
Campaigners believe the new bank’s pledge for ethical investments is an important step for the banking world.
Friends of the Earth Scotland’s divestment campaigner, Ric Lander, said: ‘The Scottish National Investment Bank must now invest in climate solutions and maintain ethical standards across its activities. This is a huge achievement.
‘We can now say that the creation of this bank is good news in the fight against climate change.
‘With its legal obligations to tackle the climate crisis, the Scottish government should now clarify that this new public bank will not invest in any fossil fuels, plastic production, deforestation or other projects that will push up our climate emissions.’
In October 2019, Environment Journal investigated why transparency is so important in banking.
We interviewed Troy Mortimer, head of sustainability and responsible investment at accounting giant KPMG, who are self-proclaimed as being ‘at the forefront of the oil and gas industry.’
Mr Mortimer said: ‘There are two schools of thought regarding investing in fossil fuels.
‘One is that we should completely divest, and the other, more realistic approach is that we need to invest in the transition,’ he said. ‘We need regulation to create a more level playing field, the investors can’t just reward who has the best story rather than who has the complete picture.’
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