Scottish National Investment Bank: consultation report

Appendix A - Campaign responses

This appendix provides further information about the campaign response received from Friends of the Earth Scotland.

It should be noted that:

• The campaign asked their supporters to provide various levels of detail in relation to personal information
• All campaign responses received in the consultation were checked to identify whether they were standard or non-standard. The standard response is provided below. Non-standard responses were copied into the analysis and put through the validation process described in Appendix B
• Within the campaign, there were a small number of non-standard responses in which the respondent had edited the standard response. These have been reported as non-standard ('variation') responses below.

Friends of the Earth Scotland online campaign

Friends of the Earth Scotland provided a standard text which could form the basis of a response to the consultation which respondents had the option of personalising. For the purpose of the analysis, the template below was seen to relate to all of the consultation questions (Q1-Q8):

Question 1: What are the top 3 areas of interventions where you think the Bank can have the greatest impact on sustainable economic growth?

Answer: Investment that addresses social problems, such as inequality; providing investment to marginalised groups; and finance for transformational technologies to reduce carbon emissions should be prioritised (Options 6, 7 and 8 in the list).

Question 2: Which of these financial instruments might have the greatest impact in addressing your chosen areas of intervention?

Answer: To be effective the new Bank should have a broad remit, seeking to offer investment in any way that can make a meaningful contribution towards tackling inequality and climate change. This must include investment in public infrastructure; but the Bank should not create public-private partnership schemes which have burdened local government with high levels of debt.

Question 3: In terms of existing international models, is there a particular example that you think is appropriate for Scotland and why?

Answer: Outside the UK many public development and investment banks make a significant contribution towards sustainability and social justice. Germany's state development bank underpins regional and local banks and funds household and business energy efficiency, and renewable technologies.

Question 4: Do you think that the Bank should have explicit regional mandates within Scotland, to address specific regional issues and/or to contribute towards greater regional economic cohesion?

Answer: Inequality between Scotland's regions is acute and should be addressed by the Bank, for example providing green jobs in deprived areas and places which will lose jobs as we transition away from oil and gas. The Bank should also fund schemes that benefit marginalised groups including women, disabled people and people of colour.

Question 5: Bearing in mind the potential cost implications, should the Bank:

• Focus on solely providing financing
• Provide advice and support to assist entities/projects in becoming 'funding ready'; or
• Provide ongoing advice and support to entities/projects in which it has supported?

Answer: It should take a proactive role in the economy, creating new markets and supply chains where they do not exist in Scotland, for example in renewable heat and offshore floating wind. (Option 2 in the list).

Question 6: Do you think that the Bank should act:

• Solely through intermediaries/delivery bodies
• As a co-investor or co-lender on equal terms with others
• As a principal investor/lender in its own right
• Through the provision of finance guarantees; or
• Differently in different areas of activity?

Answer: The Bank should be considerably more powerful than existing lending public bodies and have the full powers of a Bank so that it can have a powerful impact on the economy.

Question 7: Are there particular issues on governance and the operational model, including issues such as public/private classification that you think would strengthen, or constrain, the Bank's ability to deliver on its mission?

Answer: It should be a public body jointly owned by local authorities and the Scottish Government, enabling the Bank to use local government borrowing powers. The governance structure of the Bank must represent Scotland's regions, industrial sectors, civil society and trade unions, reflect the genders, abilities and ethnic backgrounds of the population, and be free from day-to-day political interference. The Bank shouldn't invest in unsustainable industries like oil and gas: it should have a code of practice to ensure that those it lends to have the highest environmental and workers' rights standards, and do not engage in tax avoidance.

Question 8: Do you have any more comments about the establishment of the Bank?

Answer: When creating the Bank, the Scottish Government should look to public sector best practice and civil society and not seek to emulate the toxic culture and bloated pay scales of the private financial sector.

Variation in responses

Some respondents chose to supplement the template response, which created several non-standard responses.

Most of these responses varied only in word or sentence structure and therefore were not materially different. The remainder of these responses provided materially different content as highlighted below:

• A small number of respondents cited that only a decentralised banking system with many locally-focused, not-for-profit community banks, as has been in place in Germany for about 200 years, guarantees the best possible outcomes for Scotland. It was suggested that this idea could be modelled on the not-for-profit corporate governance structure of the Hampshire Community Bank, whereby 50% of equity is in the control of a charity for the benefit of the people within the local area only
• It was highlighted that the Bank should avoid the Green Investment Bank and British Business Bank model as respondents were of the opinion that they only focused on large centralised projects and do not have a banking license
• It was noted that it should not focus on providing funding for peer-to-peer lending schemes which were considered to be untested in recessions and played into the hands of the bigger banks, while not creating new credit.

Some of the varying responses built on the views mentioned in the template, shown below:

• The idea of the Bank helping to tackle climate change was developed through asserting that it should be a priority to develop new green technologies, proposing that at least 90% of investments be made in sustainable technologies at inception, with the aim that within five years all investments in unsustainable industries ( e.g. oil and gas) are phased out
• The underlying inequality issue within Scotland was built upon, with a respondent asserting that the Bank should invest in all areas of Scotland and not just concentrate on the central belt.