Investor Panel recommendations: Scottish Government response

Background and Approach

The National Strategy for Economic Transformation (NSET) committed to establishing an Investor Panel, co-chaired by the First Minister, to attract investment to projects in Scotland that support our transition to net zero and to bring investor intelligence to policy and regulatory development early in the process.

In Summer 2022, the former First Minister invited Angus Macpherson, Chief Executive of Noble & Co, to co-chair the Investor Panel. She asked the Panel to consider investment in the round but also, given their importance to achieving net zero, to provide specific recommendations on ScotWind, hydrogen and heat.

From the outset, the intention was to produce a short, sharp overview and set of recommendations from the perspective of investors. This has been informed by the experience and expertise of Panel members and a series of semi-structured interviews and discussions with over 40 institutions, companies, advisers and individuals who are active in making infrastructure investments and know Scotland. Members of the Panel also engaged with senior officials across the Scottish Government, Enterprise Agencies, Scottish Futures Trust and the Scottish National Investment Bank. Support for the Panel was also provided by the Universities of Edinburgh and Strathclyde.

The Panel's initial focus was to identify the characteristics and practices of countries and jurisdictions which investors view as attractive. They looked in particular at Western Australia and the Republic of Ireland and also considered practice from Portugal, Canada, Singapore and Norway. The Panel concluded that the common characteristics of 'investor friendly' destinations are:

• the political atmosphere and posture is positive and encouraging towards private investment with knowledgeable and credible senior politicians and officials who invest time at the right level and in the right relationships;
• there are clearly articulated, credible, long-term policies encompassing net-zero targets and sector priorities;
• policies favour a national approach to scale investments;
• physical planning of critical infrastructure is prioritised and fast tracked;
• Government makes difficult decisions between competing policy objectives quickly and clearly;
• Government and public sector leadership is energetic, focussed, decisive and aligned;
• investor relationship management is taken seriously and is regarded as a long-term exercise which requires a professional approach;
• it is clear to investors who they need to engage with, and how;
• infrastructure priorities that require government intervention are planned, shaped and costed: these form a pipeline, not a wish list; and
• Government is sensitive to decisions which impact the risk, reward or timing of investments and any negative impact is communicated and, where possible, mitigated.

The Panel used this framework to consider and make recommendations across three related themes – strategic direction; investor engagement; and delivery.