Business Purpose Commission report: Scottish Government response

Additional Opportunities

Beyond the lead recommendations, there are additional areas for the Scottish Government to further support the business purpose agenda.

Finance and Investment

We are committed to supporting opportunities in financing purposeful growth. The Scottish Government publicly launched a new industry led Green and Sustainable Financial Services Taskforce on 28 Feb 2022. This presents a unique opportunity to create connections between financial services sector, industry, regulators, the UK Government and academia to work together to demonstrate global leadership in green and sustainable financial services.

The Financial Services Growth and Development Board (FiSGAD), co-chaired by the First Minister and Scottish Financial Enterprise (SFE) also launched in 2022 and supports partnership between the Financial and Professional Services industry and Scottish Government. The Board also oversees the work of the Green and Sustainable Financial Services Taskforce.

Since opening for business in November 2020, the Scottish National Investment Bank (SNIB) has committed £300.7 million across 22 investments, a further £526 million has been made in these investments by third part capital. Each investment has aligned with at least one of the missions set by Ministers (just transition to net zero, improving equality of opportunity through place, harnessing innovation to enable our people to flourish). The 2023/24 budget has recently committed an additional £244 million so that the SNIB can continue to invest in Scottish businesses, projects and communities across all three of the missions set for it by Scottish Ministers: Net Zero, place and innovation. This mission-oriented approach allows the Bank to fully develop and catalyse private investment, create and shape new markets, spark innovation and deliver a range of environmental, social, and economic returns.

Artificial Intelligence (AI) Strategy

There is common ground between business purpose and AI strategy, which is built on the principles of being ethical, inclusive, trustworthy. AI as a force for good mirrors the business purpose affirmation that business should be a force for good in society. We will explore opportunities to embed business purpose in AI Strategy, recognising that the competitive advantage of purposeful business (talent attraction and retention, resilience to shock, long term profitability) could be powerful when seeking investment in AI.

Real Living Wage

We will work with partners to share the business benefits of business purpose in employer engagement initiatives to support payment of the real Living Wage. The public opinion poll referenced in the Report asked people about the three most important things a business could do to secure public confidence and trust. Paying the real living wage as a minimum was the highest priority (52%, followed by paying fair levels of tax (38%), and providing job security for employees (32%). The connection between paying a living wage and the business purpose journey which recognises the value of employees as key stakeholders presents a compelling case for employer businesses who are yet to start their purposeful journey.

Fair Work

Fair Work offers effective voice, respect, security, opportunity and fulfilment; balances the rights and responsibilities of employers and workers; and can generate benefits for individuals, organisations and society.

The workplace is where we apply peoples' skills and talents to create value, which we know drives productivity. ​The evidence shows a positive correlation between structured leadership and management practices which empower workers to learn, develop, problem solve, and participate in decision making, resulting in high employee engagement​. Employee engagement is correlated with productivity. The Report shares evidence of a relationship between wellbeing and higher rates of productivity (p38) and concludes, "economies with a larger share of purposeful businesses are more likely to have higher rates of productivity as well as be more inclusive and sustainable."

For employer businesses therefore, being a fair work employer supports enhanced value creation, productivity and wellbeing - at the individual, firm and ultimately, national level.​ There is a role for the Scottish Government to build on the Report's compelling business case for business purpose, to support Fair Work objectives and the vision for Scotland to be a leading Fair Work Nation by 2025, where fair work drives success, wellbeing and prosperity for individuals, businesses, organisations and society.

International Trade

The aim to embed purpose throughout the Scottish economy is shared by Scotland's Vision for Trade (the Vision), which provides the framework for decisions on trade to be guided by our principles: inclusive growth, wellbeing, sustainability, net zero and good governance. It also positions our approach to trade within a broader economic, social and environmental context. The Vision then sets out concrete actions that the Scottish Government could take to improve the trading environment, while applying our principles.

In line with the Business Purpose Commission's recommendations, the Vision identifies the opportunity to build relationships with like-minded countries, organisations and businesses based on those principles. It also recognises that social enterprises often lead the way in their contribution to a wellbeing economy.

As a result of the publication of Scotland's Vision for Trade, the Scottish Government has also taken a critical look at its trade support and promotion activities, and we are actively working to integrate values-based trade into our approach. This includes:

• Ending all Scottish Government overseas trade support and promotion activities solely focused on new fossil fuel goods and services.
• Building values into our grant offer as part of our International Trade Partnership with the Scottish Chambers of Commerce. This means our trade missions are delivered in line with the principles outlined in Scotland's Vision for Trade.
• Considering a range of values-based parameters before support is approved for businesses as part of our International Recovery Programme.

Environmental Sustainability

The Environment Strategy creates an overarching framework for Scotland's environment and climate policies, and sets out the Scottish Government's commitment to tackling the climate and nature crises. It recognises that this will require transformative changes across Scotland's economy and society, in order to thrive within the planet's sustainable limits. These transformations will, in turn, create new opportunities for green jobs and businesses, for tackling inequalities and for improving the health and wellbeing of current and future generations. We have committed to publishing 'pathways' for achieving the strategy's outcomes. These include an outcome focusing on our goals for driving the just transition to a net zero, nature-positive, circular economy. In connection with this work, we will explore the role that business purpose can play in supporting progress towards this outcome.