 Good morning, and welcome to the ninth meeting in 2023 of the Economy and Fair Work Committee. Our first item of business is a decision to take consideration of the evidence received for our work on the disability employment gap and next steps in private at future meetings. So, we move on to our next item of business, which is the fifth evidence session of an inquiry into a just transition for the greenish mouth area. Today's session will focus on how public policy and funding can be used to unlock private capital to finance a just transition. I now welcome Heather Buchanan, co-founder of bankers for net zero. James Close, head of climate change at NatWest Group, and Ben Howard, sustainability officer at the ABI. As always, if members and witnesses can keep their answers and questions as concise as possible, that would be helpful. You are all here to talk about the importance of green finance. Can you maybe set out your views on what the appetite for that is in Scotland, both in terms of supply from investors and demand from individuals and businesses? I might come to Heather first, because I think that it was bankers for net zero who published a report on mainstreaming net zero that said that there was a lack of a comprehensive strategy to support SMEs to making their transition in significant numbers. I wonder if that was a UK report if you find that that was a similar picture in Scotland, and maybe say a bit about whether there is an appetite for green finance in Scotland? No, absolutely. Thank you. I think that we still haven't really cracked it in terms of how to support SMEs, and primarily a lot of it is actually because we don't even have a standardised method of measuring what that looks like or an agreed methodology for it. If we can't really measure it to start with, that's a common problem, so it seems like a lot of stuff we're doing. We're moving around the edges, but not really getting to the heart of what does a good transition look like for an SME, and what is a good transition plan. Obviously, there's a lot of work going on in that area, but I think that it's still a really crowded space and there's a general lack of understanding of where to go, what needs to be done, I think that everybody for the most part gets it. Most SMEs are clearly worried about the day-to-day bills and doing the payroll rather than some of the major investments that might be required in terms of transition, so there's still some, I guess, a lot of competing information out there, and so to a certain extent it becomes almost too difficult to do box. Is it taking evidence in advance of COP and Glasgow from a panel of SMEs, and that was evidence that we heard in advance of that, and it doesn't seem to much has changed. There was additional pressures that caused a living crisis, issues to supply chains following the war on Ukraine, so there was additional pressures, and they did express it with a difficult to know where to go for information and where to go for support. Absolutely, and what's considered credible is another kind of key question. I think that, as you say, there's a desire to do it particularly now as costs are going up around the energy costs and what not, and it's very obviously critical for people, but the level of, I guess, it's much like consumers as well, the level of investments required, particularly in your own infrastructure, and there's a certain kind of wait and see if the technology is the right technology, so I think that people really don't feel that they've got the strong kind of market signals to really lean into things like we got with EVs, and there's very clear policy phasing out for internal combustion engines in the future, everybody, because it can now lean into EVs, but we don't really have that clarity for businesses, but certainly with rising energy costs now is the perfect time and the perfect opportunity to really lean into it, but we're just finding that the incentives potentially aren't there. And then the conchwires into Grangemouth, and that's a recognition that, you know, Grangemouth, in terms of the major petrochemical site, has a big impact on our climate targets and on our emissions, is that something bankers for net zero, is that an area that you would be involved in, or is it more focused on SMEs, or is it looking at the bigger kind of challenges we have in terms of industry? It's all across the board, and I think one of the big things, of course, is making sure that as we transition to net zero, particularly in areas like this, that the policy kind of drivers are such that we create a glide path rather than cliff edges, which, and there's so many kind of competing interests in this area, it's really the collaboration point is really the key that we need to do, and I think that it's been very interesting over the last few years seeing how, whether it be banks or other parts of industry and stuff, that kind of willingness to collaborate and actually have some quite open discussions about the challenges that we face in that have come forward, and that's been, I think, an absolute game changer in terms of helping to develop policy, but we still have a long way to go. Okay, thank you. I'll come to James. Next, a similar question, James, around what the appetite is for Scotland. Do you see a demand for your services in terms of businesses? I don't know if you have any insights into the Greens by there in particular, but businesses in Scotland who are looking to ensure that we have a just transition. Yeah, well, thank you for inviting us here today, and I'm very happy to be here and to discuss this really important issue in terms of a just transition. I think particularly on the SME side of things, you know, we've done a lot of work with our small and medium-sized enterprise customers. Many of them want to do and be involved in this transition, and I think, as Heather said, they don't necessarily have the know-how and the tools to enable them to do that, but they do think they recognize the opportunity that sits around it. The springboard for sustainable recovery report, which we published the first version of it ahead of COP26, and then the second version just ahead of COP27, suggested that there's a pretty big revenue opportunity in the UK for SMEs in the sustainable transition of £175 billion in the UK and £22 billion in Scotland. I do think that we've got an opportunity to unlock that through the kind of policy signals that are going to get the large-scale enterprises focusing on the transition and then pushing that through the supply chain to the small and medium-sized enterprises. Now, Grangemouth is not an area of my specific remit, of course. I mean, I cover the UK as a whole, but it is an opportunity, I think, for Scotland to build on the comparative advantage that it's shown in offshore wind and renewables, and particularly now, as we see policies starting to—or at least aspirations starting to emerge around carbon capture usage and storage. Of course, many of the assets and capabilities in Grangemouth lend themselves to being part of that transition. Alongside that, there has to be the finance that enables that to happen. Now, as a bank, a UK bank that predominantly provides senior debt, we need to see the capital structure into which we're lending, and that's where we need good strong policy signals so that the equity investors know what they're letting themselves in for. We're also looking at de-risking some of the particular novel technologies through government intervention or support in the UK, the national infrastructure bank, or the Scottish equivalent, so that there's some first-last or credit guarantees that sit around the provision of senior debt. Of course, the more senior debt you can get into these businesses because it's cheaper than other forms of capital, the cheaper the cost of the capital, which means that the business case for doing just transition-related activities becomes much stronger. Is it fair to say that we're not at the stage yet where the scenario you have just described is happening? Are we on the precipice of this happening? What's the baddie? What's stopping this? For those of us who work in this space, we live with this tension between frustration but also optimism around what could happen. I feel a bit as though there are some really important unlocking activities going on. The Inflation Reduction Act in the US is a massive provider of capital to stimulate new sustainable technologies. The equivalent in the EU, the Green New Deal investment plan, will do similar sorts of things for the EU. I think that in the UK we need to figure out how to match that. We probably aren't going to have the financial firepower to do it at the same scale, but we can use the ingenuity and the first mover advantage that we have from the fact that we've been committing to these targets for a very long time. Scotland has a very advanced set of commitments and expectations around what can happen relating to the transition. The thing that gets me most excited at the moment is the work that Chris Kismore has been doing on his Mission Zero work, which sets out a whole economy transformation and the opportunities that sit around that and how players can come together to take advantage of those opportunities. It's been done specifically with the lens of opportunity, which I think is very helpful. I'm going to invite Ben to respond to the question. After that, I'm going to bring in Michelle Thomson, who has an interest in some of the issues that have been raised and then Colin Beattie after that. Ben, if I come to you, the initial question was around the appetite for green finance in Scotland. From your perspective, how do you see the picture developing in Scotland? First, I thank you for the invitation to speak to you today, and I also thank you for allowing me to give evidence remotely, which is much appreciated. To come to the question, overall, from ABI members, the appetite to be part of green finance, particularly in Scotland, is very strong. ABI members have made a number of net zero commitments, like my fellow witnesses. Particularly on the long-term savings pension side of our membership, the market share that has actively made a public race to zero commitment is very high. It's something like over 80 per cent of the market, so those members have made those commitments. They are now looking for the investment opportunities to actually live up to them. I think that that's where the challenges echo much of what my previous witnesses have said. I think that, where our members have spoken, to be frank, they would say that they were having a lot of those commitments were made in the build-up to COP26. They would have expected, at this point, to have seen more opportunities to make direct investments. We do want to see that pipeline of investment opportunities grow, but there's definitely an appetite for it to answer your question and very strong interests. Again, those members have made those commitments publicly, so they want to live up to them. On the other side, what's the demand from customers? I think that it's fair to say that it's a nuanced picture. For example, one of our members' Scottish widows did some research on green pensions last year, which is showing that there's a growing appetite for end-customers, so pension savers or sometimes employers who are choosing pension schemes to be offered a broader range of green pensions and other green finance options. It seems to be a particular priority for people who are changing jobs, that's something that they look for for their employer. They're able to be offered a pension that is demonstrably sustainable, and that's growing. I wouldn't characterise it as the majority of customers, but it's a growing cohort, so it's increasingly giving a strong business case to our members to provide those. Obviously, what they need are the investment opportunities so that those funds and those pension products are resilient and strong and give deliver a good financial return as well. At the other end, it's also fair to say that there will be some customers who will say, no, my number one priority is always going to be my financial returns rather than any kind of moral or ethical considerations. Even then, they want to see strong and resilient returns. Frankly, if you look at the long-term picture for the UK economy, it's clear that net zero is a tremendous growth opportunity. My fellow witness mentioned the Chris Gidmore review and I think that the latest and long line of research has demonstrated that the best and most sustainable path for economic growth in the UK is net zero. Frankly, I think that from customers there will be a strong demand for these products. I can come on to what we can do about some of those issues, but I think that to answer the core question, I think that the demand is strong. There's definitely an appetite. There's more to do, and it frankly is about a pipeline of investment opportunities. That's what we need to see. There are things that our members can do to help with that as well, which I'm happy to come on to. That's probably enough for the first question. Thank you. Just before I bring in Michelle, you said that, following COP, there were lots of investment opportunities and lots of talk about what we would do next, but that hasn't been realised as much as you would like to see. What's been the barriers? Has it been what's happened in Ukraine? Has it been other external factors? Or is there a lack of commitment somewhere or a lack of leadership or what would you say are the barriers? Why we're not seeing things at the peace that we would like to see it happen at? I would say, having looked at it, I don't think that there's one single factor. I think that clearly the Ukraine war has obviously caused a lot of challenges. I think that, as far as I can see, it seems that there are some technologies that are close to deployment. Hydrogen might be an example that get a lot of attention. They have not reached the point where they're at a commercial deployment, and I think particularly that ABI members are investing pension savings, they're not at the venture capital early stage investment. They will be coming in at a later date. What they want to see are projects that, where there is a clear business case and there's strong evidence that there will be a good return. Across a number of areas, there are projects where you can clearly see that this is the direction of travel and there are enough indications that these are technologies that governments in Scotland and across the UK are prioritising, but we're not seeing that actual investable opportunity being put forward. It's perhaps that the technology just aren't quite mature enough, or perhaps going back to what previous witnesses have said, the policy signals haven't quite been strong enough. Equally, there are areas where it is beginning to work. Electric vehicles would be a good example where there is a strong policy signal, and that links into other investment opportunities such as the charge points, as well as the vehicles. There are some areas that are definitely not a completely bleak picture, but there are areas where we're looking for more signals than to take it to the specific thing of this inquiry. A more concentrated look at Grangemouth and the areas that we know have a very high carbon footprint, but also a lot of potential to be part of net zero. Those are the kind of opportunities that we want to be involved in, and I suppose to be part of those discussions so that we understand exactly what the role of our members' investment capacity can be, and they start to unlock those investments. One final thing I would add as well, and this is more at the UK level, but there's obviously two reforms that the government have announced that are very welcome, and we are confident that that will actually make things easier, and, hopefully, once those come into effect, that will be a real opportunity for our members to make investments in those kind of technologies. Okay, thank you. Michelle Thompson to be followed by Colin Beattie. Good morning. First of all, convener, I must declare an interest as an ambassador for the all-party parliamentary group for fair business banking, of which Heather I think now has a peripheral involvement, so just to put that on the record. Heather, you used a term there that intrigued me about devising a glide path, not a cliff edge, and I suppose that, for me, that was talking to the current mismatch between the demand side and the supply side. What I'm interested in is understanding the kind of golden threads to be able to cut through and the building blocks. I know that Bankers for Net Zero sent out a paper about something called Perseus, and you mentioned methodologies up front that, presumably, are meant and devised to be scalable and equally well, I think that that West and ABI will be looking for the casier, the enabling structures. Starting off with you, Heather, can you give me a little more flavour about what you see ideally should be in place in terms of a glide path and not a cliff edge? Secondly, following on from that, what role the Scottish Government can play and, in particular, the Scottish Government. If you could lead off, thanks. In terms of the glide path, it's not just the supply and demand, it's also the policy signals. A perfect example would be yesterday that I was at a round table with the Bank of England and talked about the kind of capital requirements for lending to SMEs, which is due to an increase in the near future and stuff like that. On the one hand, you'll have financial institutions being told that they have to hold more capital for loans against SMEs, and on the other hand, you've got Government saying that SMEs need more finance in order to fund the transition. Those are situations in which you've got two different branches of Government and the financial system working at odds with each other. SMEs and businesses are caught in the middle, as they were, and generally just with more expensive capital. In terms of the framework, if you imagine that you were a food supplier and that you'd get a new supply for supermarkets, you've got two bank accounts, you're potentially being asked from all the way down for six different sets of information because nobody's agreed. To a certain extent, it's like if we had the big four going out and competing with each other on how they present a balance sheet. Nobody does that. Everybody knows what the PNL looks like. Everybody knows what the balance sheet looks like. We haven't really gotten to that stage, particularly for SMEs. What we're doing with Project Perseus is not going out to replace any of the carbon calculators that are out there, but we're very much looking at how we use the principles that are the same as an open banking and where we've partnered up with a not-for-profit called Icebreaker One, which rolled out open banking in the UK. How do we get to a point where we can automate the recording of GHG emissions and intensities at a very, very basic level and make that something that's scalable? One of the other workstreams is speaking with the international boards, with the ISSB, with the UNIPFI, with Race Zero, CDP—all the acronyms under the sun—in terms of whether we can get to an agreement where we all decide what is proportionate reporting for SMEs so that it becomes much more seamless things until we get to that stage. Data and in particular assurable data at that level is so disparate right now that it's very difficult to measure, so it's very difficult to really forecast forward. It's based on assumptions and averages and values rather than the granularity that we really need to move forward. That's really the kind of bedrock that you need for actually making investment decisions as well and being able to move forward. In terms of policy, anything, particularly at the SP end of things, that helps reduce the capital burden on businesses. The finance sector is looking into almost heating as a service, so rather than having to invest in your boiler, your heat pumps, you just have it on an almost like a lease basis. I think that there's quite a few levers that can go through there, but we need to get the measurement right and we need to actually go back to basics before we can build out again because it's too confusing right now. James, the concept around scalable building blocks and underpinning measures, is that something that you're looking at as well? Very much so. The work that we've done in our climate transition plan, which we published along with our annual results, I think shows what needs to happen to reduce the carbon intensity of the emissions that we finance for us to hit our 2030 target of harving the climate impact of our financing. And what we look at there is the gap between what will happen through existing policies and what's required to change to drive new policies. And I think, of course, as you project back from 2030 in terms of what the economy will look like then as we've hit our targets as a nation, then we start to work out where the gaps are going to be in the financing. So, for example, at the moment, battery technology is perceived as a sort of part of advanced manufacturing, but it's going to be pretty much everywhere in the whole of the mobility systems, in housing and heat systems, in buildings. And I think that sort of different way of thinking is going to be required to scale up. And I think we also recognise that it's going to be important to experiment as well, but all the experimentation should be done with a view to scaling up. And part of that is on the energy efficiency side, which is obviously a major area of opportunity, where our chief executive, Dame Alison Rose, has been appointed as co-chair of the UK energy efficiency task force with Lord Calanan, the housing minister. And I think that's an opportunity to translate policy into practical implementation across the members of that particular task force. And Ben, bringing you in here in terms of your kind of representatives wish for long-term patient capital, can you kind of add your view about this concept of kind of scalable commoditisation, if you like, of the market? And I suppose adding on to that and listening to the two previous panellists, how confident are you that we can really pull these golden threads together in the time that we need to act, given the scale of the challenge? Okay, yeah. I mean, I think firstly agree with a lot of what my previous panellists have said. Perhaps to give an example, I think, electric vehicle charge points are one that's a good example of a technology that is already being deployed, but it needs to rapidly scale up. And I think what our members would be looking for there is a bit more consistency. So, obviously, a lot of those projects are being delivered by individual local councils. There's some examples of good practice that we can already build on. I think to reach the target across the whole of the UK, I apologize if I don't know the figures for Scotland, but I think across the whole of the UK it's sort of essentially a tenfold increase from about 35,000 now to nearly 300,000 that we need to reach in the next ten years. That is a lot. I feel that that is actually a potentially very exciting opportunity for our members because it provides exactly the kind of returns that they want, which is a fairly predictable use pattern and a fairly predictable return. A lot of work needs to go into actually putting those things in the ground. I think what we need to do is say, actually, the investment models that we've got are probably not too bad, but we need to scale them up rapidly and get to the point where perhaps it's not one individual local council that's looking for a contract and looking for an investment, but that we try and partner the schemes up and bundle them together to get that kind of scale of investment. Some of the examples that the previous panelist gave around SMEs are really interesting. Obviously, once you get to the kind of institutional investor level that the AVI members tend to operate in, they wouldn't be investing in individual SMEs, but what they can invest in is that kind of underpinning, connecting infrastructure that will help all those SMEs change. Both of those examples—the example that I've given of charge points and the example of energy efficiency—I've put those in the same bracket, where we're essentially trying to do the same thing in lots of different areas. The more that we can try and build that and have consistency, the more likely you should get that scaled capital, and that's where our members can really kick in and I hope to support that. In terms of how confident I am that it's going to happen, I don't think that anyone's under any illusion that it's not a massive challenge. However, there are signs. I go back to the consumer demand point. I think that there's a real opportunity for different parts of the financial services sector and other industries to work together. I'd also say that if I look at the insurance side of our membership, I think that we've got a really important role in supporting some of that. There's innovative insurance products coming out that can perhaps help to de-risk this. I don't think that the solution is the problem on their own, but they can definitely play a part. We're seeing consumer demand where the strong signals being given electric vehicles is a good example. In my first role at the AVI, I worked full-time on motor insurance and at that point, and it was only just over five years ago, I never spoke about electric vehicles. It just didn't come up. It's now obviously probably the hottest topic for a person who's taken over that role. That's an example of something that's changed radically. Energy efficiency, we're really supportive of the fact that there's a task force and energy efficiency now that Western involved in. We're really keen to participating in that as well. I think that as long as we keep building this momentum and don't let it slip, then we've got a real opportunity. I also think that going back to the subject of this inquiry, where you've got concentrated areas where there's clearly a particular demand and a particular drive, making that work, learning the best practice and then scaling it out everywhere else is the way to go. The fact that we are looking in detail at an area like Grangemap is really encouraging. I wouldn't undersell any of the complexities, but I'm certainly on the optimistic side that we can make this happen. I've just got one more question, because there's a lot of information that's been brought out here that I know my colleagues will want to pick up on, but just bringing it back to the focus of our wider inquiry, which is about a just transition for Grangemouth. We've been talking about some of the significant structural issues. Just to add to that, I'd like to ask for a view from you all about how we can overcome other structural issues around financing, which is the role of women-led businesses and incorporating that in measures as we develop them up front, the sort of thing that you've outlined to Heather. To what extent, from all your representative organisations, are you aware that part of a just transition again, which is an absolutely massive area that women-led businesses and women the heart of the just transition is important? I would say that it's a discussion point, but it's probably not as prominent as it could be within that. We tend to look more at the data and the details around things, but I would say that it's not a regular conversation point, which is something that's just good to ask that question, absolutely. To pick up the point, I think that this is something that we're very committed to. The Rose review stimulated a lot of that, and I think that there's a Stuart review here in Scotland as well to promote female entrepreneurship. I think that what's really interesting is that this week we did a female entrepreneurship bond on International Women's Day, which is basically going into the capital markets to raise money for us then to lend to female entrepreneurs. The really interesting thing about that is the demand to be part of those kind of bond structures that you see the impact coming from your lending in the activities to which it's deployed. Scaling up of the finance for female entrepreneurship is a very important part of stimulating it and making it grow and work in an appropriate way. Ben, just to finish off before I hand over. Yes, certainly 100% agree that it is incredibly important, and I don't think it's talked about enough in the context of climate change and the net zero transition. Certainly from our industry, we're well aware that the insurance and long-term savings sector isn't as diverse as it should be. We published a blueprint last year and set ourselves the ambition that we've become the most diverse and inclusive sector in the UK, and that obviously means the way we operate as well as the people that work there. I think there's really strong compelling evidence that already, if you look at the composition of diverse boards in companies that have better outcomes on sustainability and are more likely to be aligned to net zero, so I think there's strong evidence that this is 100% true. I think there's also some practical steps that we could be looking at. I think a lot of your enquiries focused on skills, and one thing I would say is to really think about as we start to develop those new skills, making that as diverse and inclusive as possible, use as many different routes. I think that one area that we could look at in perhaps a bit more detail, not necessarily in this session, is to think about a bit more about the comments and work placements and partnerships between different businesses to actually build that wider skills, because clearly some of these professions are going to be chartered or require a particular qualification or a particular skill, but a lot of it is just actually about extending your experiences, coming at it with fresh perspectives. I think that businesses that are collaborating on the just transition can also collaborate in that practical sense of using opportunities like the government's work experience, flexible working and building that in as much as we can. That will both encourage a more diverse workforce but actually get more people with the kind of skills and experiences they need, so I know that's not a direct answer to the question about women, but hopefully that approach where we really think about diversity, inclusion, bringing more people into skills, more social mobility and all of this, and businesses working together to address that challenge, it will help for the help. My question is about money, like everybody else's. Money is the key to everything in this. In previous sessions, the committee has heard that there are substantial amounts of private capital and increasing volumes of private capital, in fact, available to invest in the transition, but last week's evidence, we heard that the overall cost of financing the transition was a major barrier, which seems a little bit out of step. Could you maybe comment on what the barriers are to matching that supposed supply of private capital with the demand that there is in the market? As a slightly separate thing, what can policy makers do to support this? Maybe Heather, I can ask you to comment first. Just if you look even on a consumer level on the demand side, we need to go from right now green finance and is a bit boutique still, and we need to really make it more IKEA for people to get more involved. One of the things, if you look at retrofits, for example, that has been put forward in something that the Scottish Government could do, is having businesses and individuals all have building passports. First and foremost, EPCs are a bit of a blunt tool now and quite outdated, so if we have some more, again, accurate asset-level data along with building passports where people can actually slowly but surely see progress towards decarbonising their own building stock, then with that, you can start linking it to incentives whether that be a business rate reduction or reduction in your council tax, things like that, where you can slowly work towards it, I think, would really unlock a lot. Again, it's just such a crowded space and there's a general understanding that we need to do something, but everybody knows what a mawn wardrobe looks like or just a drawer is a dresser or whatever, whereas we really don't have that understanding in this area. So how to make that much more standardised and understandable is the first step in order to unlock that. What about policy makers? Is there anything they could or should be doing to try and facilitate this? No, certainly, and I think to the point that performing the EPC standards would be a start. Getting building passports is another thing, like if you had something like that that's rolled out across the country and that's something that sits within the devolved ministrations powers and incentivising within the taxation structure very clear targets. I think it's probably the thing that cuts through the most. There will be other things that are probably more reserved matters around VAT reduction that need to be looked at, but certainly within the competency of devolved nations that direct engagement with housing stock is critically important and could really unlock things. I think this is a really interesting question and one of the reasons why I work for a bank is because of the power of finance and the power of money, but money is pretty rational. It goes where it gets the best risk adjusted returns. The problem that we're seeing is that the perception of risk in some of these areas is greater than some of the reality. Again, what we encourage our credit office to think about is not just what they've financed in the past and where the asset security has come and the historic financial performance, but where some of those investments are going to be viable for the future and that starts to reframe that risk and reward equation in a way that becomes more amenable to enabling the finance to flow. But there's I think a few barriers to that. The first is, as Heather's talked about, is information and data, so you need to be able to put into the hands of the people making the decisions, the information around current carbon intensity and future carbon intensity. Again, for us, that links to our target of harming the climate impact of our financing. We're no longer just thinking about purely allocating capital, we're thinking about allocating capital within effectively a carbon budget. That should incentivise us to do more of the kind of sustainable finance that's required. I think the other thing that's really important is looking for means of pricing the externalities. So how can you put a shadow carbon price or a broader carbon price than one that's already in the economy to enable us to price our capital more effectively? That's one of the things that we're doing as part of the implementation of our climate transition plan through a shadow price on carbon. The third thing is the policy piece, where policy is a major driver of risk perception. What we've got is a really good, strong level of ambition around net zero commitments in the UK and in Scotland in particular, but now we need to get underneath the skin of that into the specific policy drivers that are going to enable that transition to take place. That will, I think, set the context for the choices and trade-offs that people are allocating capital will make. If they see clearer policy signals and less risk, they're going to be more inclined to allocate capital towards transition-related activities. Is it correct to take as read what the previous sessions have said, which is that there is a very substantial sum of money available there, and that that's increasing all the time? You've covered some of the issues around that, but there must be a way of tapping into this willingness to invest. I think that's true. There's lots of things organisations can do to make that more visible. For example, we have our £100 billion target for by 2025 of climate sustainable financing funding. Last year, we allocated £24 billion to those kinds of activities. I think that builds the confidence that that money can flow effectively. Now, what the providers of capital want to do is put their capital to work, so they don't want to just sit with the capital on the sidelines. They want to make it working. I think that the other important point around this is getting the alignment right between asset owners and people like Ben's members who are able to take long-term financial positions, fund managers who are allocating funds on behalf of investors, and the banks who are the conduit of finance to the real economy. When we make our commitments, we think that the asset owners and fund managers will see the benefits of us building a resilient balance sheet that is focused on the transition, which again gives us more incentive to lend for those transition-related activities. You've touched on a few bits around this, but this volume of private capital, is it the type of capital that's willing to invest in the long-term, maybe even patient capital? Some of the up-and-coming industries that are going to support us in the future are still developing. Some of them are still years away from reaching the point where they're going to be making the contribution, we hope. Is it that it's the wrong kind of capital that's sitting there waiting? Well, obviously early stage businesses generally require venture capital, and that sort of venture capital has higher return expectations because there are generally higher defaults associated with it. But when you get to the point where you have greater confidence that those technologies are going to be viable, then the perceived risk comes down and the price of the capital reduces, which lends it better to that long-term patient capital that's not looking for volatile returns, it's looking for standardised returns. The other piece around this is recognising the difference between equity financing and debt financing. Of course, as a bank, we're primarily providing debt financing, so we invest into a capital structure that already has equity and long-term patient capital, if that's the structure that's been designed, alongside it. Again, the more robust that capital structure is, the easier it is for us to lend into it. Of course, that then has the benefit of bringing the cost of capital down. So, whilst there's a really big issue around the supply of capital, I'd say it's also about the price of capital, which goes back to where I started, which is capital gets priced on a pretty rational basis, and that rational basis is based on perceived risk. That's what we're trying to solve for, I think, and I think the sort of things that we've been talking about here that can help our long-term commitment and ambition, good policy signals, consistency between political parties so that there is a multi-partisan approach to long-term policy, and then also the introduction of de-risking instruments that are going to support that capital allocation as well, and then the rapid scale-up from proof of concept, venture capital style structures to ones that have got scale-up associated with them and can be invested in at scale. Thanks. Ben, can I bring you in here? Yes. Is my microphone on? Yes, Ben. Ah, brilliant. Sorry, I didn't get the thing flash up. Yes, so I completely, I think James's points are really powerful, and I think your question was around what practical things can policymakers do, and one of them James has touched on, but I think it is really important to have a clear view that investment isn't a single thing or a blob, that there are lots of different types of investors that will come in at a different stage of the scale. So, where policymakers definitely need to focus is on that early stage of technologies that we see as strategically significant to the whole of the UK and get them to the point where they are ready for the scale, and that's when the big capital that ADR members represent can come in. So, doing that is not easy. James talked about transition plans. I think that that's an area where policymakers could really focus and do a couple of things. One is actually making sure that where firms are working on their transition plans, that there's similar transition plans from Governments, that there's information that they can build on, that there's also a process for reviewing those transition plans and making sure that everyone's joined up. I think that that's a practical step is to not see the transition plans that the Government's working on as just a reporting requirement for businesses, but actually it's a really rich and important sort of information that should be used to stack policy making. I think that the next thing I would say is that, again, if you've identified the technology as being strategically significant, get all the potential investors or at least representatives of them who can provide their expertise into that conversation as early as possible and start thinking about these projects as multi-stage and saying that actually right now the key focus might be to getting the venture capital and getting this proof of concept to the point where it's proven and we can actually scale it, but actually if the investors who might be coming in at the scaling up phase can come in and lend their expertise and start saying, this is what we will be looking for, then you can actually start thinking, okay, we know at which point we're going to be needed, we can put that into our transition plans and if we're thinking practically, okay, this year we might continue to invest in some of those carbon intensive sectors that have a longer term pathway to net zero, but actually if we've got a clear point where we think there's a signal where we can shift some of that investment, we know when it is, we can plan for it and we've actually had some really productive conversations with the people driving this technology, we can build that into our transition plan that in year, let's say 2028, that's the point where we might really start to focus on this new technology and scaling it up and everyone can build a transition plan that works, so I think if we can utilise the transition plan requirements to structure some of those conversations, it will be particularly helpful. I think the other thing I would do is to think as well about other parts of the financial services sector, so obviously we represent the insurers. Again, some of these early stage ventures might not be at the point where they're looking for commercial insurance that's actually just going to cover their risks, but at the point they are, what insurers tend to price on is historic claims data. Now, in some of these new ventures that won't exist, but if you've been able to bring insurers into the conversation, perhaps even have their risk management team to come in and look at the project at an early stage. I mentioned some comments earlier in a different context, but some of the unmembers are already out sending people onto the continent to some of the carbon capture storage plants. That sort of thing can really help and then insurance is one of the ways that you can de-risk these projects, so to give offshore wins an example, a lot of the time you'll find that there's an insurance policy that's actually paying out if you have a particularly unwendy month and the energy generation is lower than expected. Again, if you can start to bring insurance into that conversation at a bit of an earlier stage, I suppose if it's one message for policy makers it's to recognise that the traditional model of an entrepreneur taking their idea forward, demonstrating that it's viable, and that's the point where they go to market and get investment. It's just to get that process a bit shorter, but also recognise that it might be appropriate to have some structure conversations, which for various reasons such as competition or it might be appropriate for public policy makers and government to facilitate directly to bring those different people in at an earlier stage so that they can plan. I think that that will help. I don't think that it's going to solve all of those problems, because also going back to the evidence that Bankers for Net Zero gave, there's also a lot of consumer demand and practical challenges for individual households that we need to overcome separately, but I think that by bringing that process together it can help. That's what I would still be encouraged policy makers to do, is to just bring everyone into the room as early as possible, but also recognise where there might be competition sensitivities or other commercial sensitivities, and that's where policy makers can structure it. Equally, of course, I know you've heard evidence from the development banks, etc. They are able to provide finance that gets the project to that certain phase and gives a degree of de-risking, then obviously some of the scale investment can come in at a slightly earlier journey because they know they're not accepting intolerable levels of risk. That's also a really practical thing, so it's great to see that those kind of development banks take on the real interest in this as well. Thank you. Just a supplementary, I think. We do have some blueprints for doing this, so if you look at offshore wind, it's been extraordinary the amount of capital that's been deployed into offshore wind in a very cost-effective way, and that's partly because the structures, the whole contracts for difference that were bid on, the use of insurance mechanisms to enable some of the technological risks to be managed more effectively have all supported that approach. I think there's a lot of learning that can be taken from the offshore wind sector and applied into some of these nascent areas such as hydrogen and carbon capture and storage. Thank you. Thank you. Thank you. Jamie Halcro Johnston to be followed by Colt Smith. Thank you very much. Good morning to the panel. Actually, just to follow up on that, because a lot of the questions I think I was going to ask around have largely been covered. You've talked obviously about the technology, you've talked about the risk associated with it and various stages of investment there, and Colin Beattie talked about developing technologies, mentioned hydrogen. From your perspective, are you seeing those technologies developing as quickly as you expected them to, would want them to? Where are they against, as I say, expectations? Well, you know, so in many ways that's the, it's almost the impossible question, isn't it? Because I think, what do they say, things happen slowly until they happen quickly. And again, I think that's a good analogy for offshore wind. I mean, five years ago you wouldn't believe you'd be deploying capital at the pace and scale that's happening at Dogger Bank, for example, for Scotland and Southern Energy, which we've been involved in. I think we know the technologies that are out there and they range from the really sort of straightforward ones around insulation. I mean, you know, we still have a lot of homes that don't have very basic insulation, let alone the high quality insulation that we need from external wall insulation. And, you know, we're starting to get to the point where we're seeing scale at heat pumps come forward, and the price for those starts to reduce quite rapidly. I think, you know, the hydrogen economy, I mean, is going to be really interesting to see what happens in the US and Europe, because we don't need to lead in the UK and Scotland and everything. I mean, there are ways of being a fast follower. I think the same is true around battery technology. You know, the battery technology exists, the Chinese are producing vast numbers of them. You know, how do we kind of replicate that for our own UK supply chains in a way that's going to be cost effective? So you can see a pathway to all of this. I think the frustration that we all have is that, you know, we just need to read the IPCC report that came out earlier this week to know that, you know, we really are at the last chance saloon in terms of doing the right things to enable this to happen. So it feels as though we ought to be building a sort of almost a state of national emergency around it to accelerate some of these things. And again, you know, I'd go back to the Skidmore report. I mean, that has got everything in there. I mean, it's a brilliant piece of analysis and, you know, a whole series of fantastic recommendations ranging from, you know, the things that we've talked about today to other really important parts of the decarbonisation agenda, such as farming and land use, where, you know, we can change the way in which we farm and use land to sequester carbon and reduce the pressure that we've got on the carbon budget. I suppose, I mean, I'm from Orkney. Obviously, there was a lot of work being done on hydrogen in Orkney. It's extremely interesting, exciting, but we've not, you know, I suppose, speaking to many people that kind of confidence on how hydrogen is going to fit in, fit into their grand scheme of things is the kind of million dollar question, let's say, rather than impossible on that side. And so it's just interesting from, you know, finance. So it's like, you know, if you want to know the results of, you know, what's going to happen, you ask a bookie, you know, ask what's going to be successful, you'll hopefully ask the banking sector, because obviously they're looking into, you know, looking to what will work. So it's really things like that, that large scale kind of things like hydrogen, where that's coming in, what confidence you have that that's going to play a major role and where you see it against kind of progress. Yeah, well, I think, you know, hydrogen, I think, has a really important to somebody, and one of my colleagues described it as it's a bit like Carlsberg, it refreshes, or is it Heineken, it refreshes parts other can't reach. And I think that's true. I mean, I think, you know, that we run the risk of sort of thinking it's a universal panacea for everything. I'm not sure that we're going to be putting hydrogen into, you know, all our gas grids and gas boilers as a substitute for natural gas, partly because we're not going to be able to manufacture enough green hydrogen to enable that to happen or blue hydrogen. But I do think it has a really important role to play in decarbonising the big industrial sectors, where heat is, you know, quite often at the moment produced by very polluting technology such as coal. And again, you know, I think Scotland's got a leading position in green steel. And I think hydrogen and, you know, arc furnace technologies are going to be part of that solution. So I think, and again, technologists and know this a lot better. And we as banks try and take all the evidence that comes from the think tanks and the research arms and translate it into a way in which we can price the capital. And I think, you know, in hydrogen in particular, we'll see ways of pricing a capital into that sector, differentiating quite substantially depending on whether we think that's going to be viable in the long term or or or less so and and indeed also the environmental integrity associated with it. Because, you know, there's a bit of sequencing to be done here, you know, we're going to be decarbonising the grid at a very, very rapid rate. Do we want to use all of that to produce green hydrogen? Or do we want to use it to produce the electricity that's going to run electric vehicles and produce and use be used for heat pumps? Heather, can I ask you the same question? Can I also ask you around? Again, I represent a region, islands and islands. How do we make sure that there is a regional approach to this and support as well? The regional is incredibly important. I think one of the things that we can do on a local level is have a much more joined up approach going back to retrofitting, doing really large-scale social housing projects. It's a really good way to kick start the market, upskill an area in general, and bring the price curve down for the supply of things. If you think back the last, you know, when we put the gas grid in many years ago, that wasn't done on a household-by-household basis. It was done at a large-scale national infrastructure. Getting those, first moving that confidence, do we go street-by-street or community-by-community? I think that some of our core recommendations in this, particularly around the building stock, has been going in where we've got social housing where you can take preferably post-1950s buildings, which are a bit easier to retrofit and do those at scale. That will naturally bring down the cost for those that can afford to pay potentially down the way. Ben, I don't know if there's anything you want to add to those questions. I think that my fellow panellists have covered it. One point I would make is particularly about that house-by-house point. I would see the point at which someone makes an insurance claim as a potential opportunity. That's someone who may not have been considering having major work done on their home or getting a new vehicle for several years if they've obviously had a very unexpected event. The point at which they make an insurance claim is where they could make that change. I think that, again, building those partnerships between different sectors—so often it will be banks or others who are providing the finance for that, but they could partner up with the insurer. There are some examples of that already happening, but I think that we could accelerate that. It's not just to prioritise people based on pre-existing things, but to recognise that that's a potential opportunity where something unexpected has happened. That could really be helpful with particularly retrofitting and switching to metric vehicles. Thank you. I'm going to allow Graham Simpson a short supplementary before I come to Colin Smith. Thank you very much, convener. I just wanted to ask you, James, because you mentioned the Skidmore report a couple of times now—really detailed—about 300 pages, I think it is—loads of really good recommendations. It mentions in the report that we should be taking a place-based approach, which is, of course, what we're looking at here. Interestingly, it says in the report that Governments often get in the way of progress. Chris Skidmore and his committee, having done all this work, do you know what's happening with that report? Is it actually going anywhere? Is it going to lead to anything? It's been broken down into these net-zero missions in specific areas. There's requests to support those, which we're planning to do. I think that the Government is expected to respond to the report as well. It also needs to respond to the High Court judgment around the delivery of the net-zero ambitions. I think that it provides a really good platform for continued dialogue and translation into action. What I really like about the way that Chris Skidmore is going about this and having been involved in several events that he's brought together is the diversity of actors that are starting to come together in these conversations. Certainly, convening people in local areas to have these discussions is extremely powerful as well. It's not just through the Skidmore report, although that can be a really excellent framing around all of this. There's plans in Teeside to do some quite significant engagement activities up there as well. Again, I think that the regional approach is very important. I think that it can be a source of regional pride as well to have a net-zero badge that builds on comparative advantage, whether that's in the Humber around offshore wind and the carbon capture and storage in Simly Grangemouth and the opportunities that sit there as well, or Teeside and the north west of England, which has a potential for a hydrogen cluster associated with it. I think that this is a great way of getting out of the London-centric nature of the UK economy and focusing on regional comparative advantage and stimulating growth in local areas. That is the essence of a just transition. Colin Smyth will be followed by Michael Chapman. You'll be pleased to know that you've answered just about every single question that I had. I'm going to turn it around. The message that we've got so far is that we've got these ambitious targets for net-zero. The Climate Change Committee has been pretty scathing of both the UK and the Scottish Government that we don't have that plan in place yet to meet those targets. You've all said that the good news is notwithstanding the risk associated particularly with new technologies, there is substantial funding available but Government is using the policy levers to make sure that funding comes forward. I put you in the seat of the Government. Why do you think that we're not the Government, we're obviously a parliamentary committee? Why do you think that? What are their barriers to enabling you to bring forward that finance? Why are they not putting forward those policy changes? What do we need to do as a committee to change that? Other than getting on with the job, what would you like to see Government change? What is it that they need to change to enable that to come forward? Don't worry, you can be as frank and critical as you like. We won't tell them, it's okay. First and foremost, we need to be much more joined up. Everything's quite disjointed and you'll have different Government departments going on in different strategies without that overarching co-ordination mechanism. You get an appointment earlier where you literally have competing messages going out and policies working against each other. Back to the measurement thing—I've said it before—I'm aware of consultancies that get multiple requests from different departments of Government to do the same thing. Potentially, those who go out could have a position where each of the big four consultancies creates a different framework to report on and then four different Government departments. Really basic stuff like that and getting that infrastructure still doesn't exist. Another thing—I think that this is something that I always say to our banks—is this collaboration point. Rather than putting out a policy and then it potentially not working, getting into that collaboration point and how to de-risk things for politicians as well, because politicians obviously have a risk framework that's potentially less rational than a financial one sometimes, but none the less. However, how do we actually get to a point where we can give politicians the confidence to know that if they make those bigger policy decisions, the capital will flow because, as we know a lot of times, things are rolled out in such a disjointed way that everybody gets burned by it and then become even more at risk of us? You're very diplomatically not said what the Government needs to start doing, but fairly valid points over it. Prioritising the financing, I think that we've seen some indication that money is going to be there for certain technologies over a period of time. I think that there's a long history of that money not being delivered. I remember many years ago being involved in carbon capture and storage and a billion pounds of treasury funding being ring-fenced, but never sort of coming forward. I think probably there is some work to do to really highlight that this is the growth opportunity for the UK. I think that if you can get that on to the treasurer's agenda and mindset, then it becomes an investment in productivity, and certainly I can't see any better investment in productivity than energy efficiency. It's got to be. Particularly as energy prices are extremely high and even when they come down, they're going to be very volatile. Energy efficiency has to be the answer to UK productivity. When you start to frame it that way, you start to get the money ring-fenced and allocated to do really quite sensible and powerful things alongside the private sector. It doesn't have to be just the public sector, but the public sector has to pay a role in that financing. The other thing that's really important is to make sure that some of the forces that are slowing this down that have very significant vested interests and very deep pockets and very strong links across Whitehall are more marginalised. I think that there's a disproportionate amount of, let's call them, high carbon intensity businesses lobbying for the status quo and that gets in the way, I think. That's very useful. Next zero is the path to growth, not the barrier to it. Ben, maybe I have done research that showed that you could contribute up to a trillion pounds towards some of those long-term projects. Why are Government not biting your hand off to get that to happen? To be fair to Government, I think that they are very interested in that and are very keen to unlock that investment. Certainly, the two reforms that they announced this year would be something that we strongly welcome. I'm definitely not in the camp of saying that Government are doing nothing and they're not trying to unlock that investment. They probably say to us in turn why is it not coming quicker? I think that it is a thing of bringing those two things together. I wouldn't be fully critical of Government. To answer your question about what's not happening, my sense is that it's just trying to do so much at once that that becomes very challenging and prioritising and keeping this agenda and keeping this momentum going so that we don't see these sort of bumps along the road and ups and downs. If you do see those, if you're someone working in a sustainability team and they do a member, then you're going back to your board and say, we need to keep the priority on this. There's a sense of saying, actually, is this not so much of a Government focus as it was two years ago? Do we still need to be spending all this time and effort on this agenda? I think that one of the things that Governments in Scotland and Dan in the UK can keep doing is emphasising that this is the strategic priority for the UK. I agree with James as well. I think that just unambiguously continuing to say that this is the direction of travel for the UK economy. This is where the group of growth opportunities are. You will not have rival business models in the next 20 years. It's really something that the Government needs to keep doing. Just don't let this agenda slip and keep giving businesses an unambiguous excuse to continue to focus their investment, their time and their effort into this, because it is challenging. There's no getting away from the fact that it's difficult. Increasingly, because of the volume of different things that people are trying to do at once, the place-based approach and focusing on particular areas where we can make momentum quicker is a good way of doing that. If you take it issue by issue, say, if you just look at electric vehicles and hydrogen, you run the risk that some of them are easier because there's already a clear decision-making structure within Government. There's a single department that leads on it. They can take a decision, they can pass a bill, they can get it done and it starts to happen. There are other areas where there are four or five different departments and then you've got to work with the Scottish Government, where two or three years between the policy intent and any legislation ever happening and in that time it slowed quite a lot. If we can focus on regional activities and drawing all those people together, we've then got workable case studies that we can then scale up and put into other places so that we're not having to reinvent the wheel each time. The volume of effort that's required is a more focused and regional approach that looks at everything and drawing all those strands together. The other thing that Government could do is focus on the end customers and individual households to help to build that case so that it's worth their time and effort so that customers understand that if they are being asked to spend a bit of extra money on energy efficiency that there's a good reason for doing this and it's going to pay off for them in the long term and that there's a value to society. There's always going to be a bit of reluctance I think if people are being asked to pay more for something but the more we can do to build that customer confidence and customer demand that that's something that Government can certainly assist with as well. Putting all those things together, recognising that there has been some good stuff Government have been doing, focusing a bit more on a regional approach where it's particularly complicated and really focusing on the case for why individual households why individual small businesses need to do this and what the long-term benefits for them are that can all help but not under play this is very difficult so whilst I'm certainly sure that most of the other members would say why is this not happening quicker when they're asked about Government but you know I think we'd also recognised that the tuning was probably one of the most complex if not the most complex public policy challenge anyone's ever worked with so it was never going to be easy but mainly just keep the momentum up on this. I'm interested in exploring a little bit more around the what needs to happen and what needs to change for SMEs and James you mentioned earlier the springboard to sustainable recovery research the revenue opportunity the job creation and the SME creation that's required and I suppose I'm particularly interested in the 40 000 SMEs that will be required to deliver the 2030 goals 2030 is approaching fast and I think the IPCC report out this week gives very very stark a very very stark message that actually we're not on track we are not meeting the 2045 goals never mind anything sooner so can you unpack specifically for SMEs what we need to be thinking of what needs to be in place to support their creation and also given given the comments that we've already heard around the place-based approach to this and our focus on Grangemouth what's your analysis of the spread of sectors that central Scotland communities workers entrepreneurs should be focused on yeah well so I think the first part of the question six things first funding access so how do we provide access to funding that also reflect the societal benefit of climate action so again our challenge to ourselves I think is prioritising that lending to SMEs you know Heather was saying that she'd met with the Bank of England to look at that I mean we really want don't want to constrain our lending to SMEs we want to encourage more of it and that's a really socially useful way to allocate capital I think the second is you know we need to build awareness here from the SME community the opportunity that sits around this and you know if we look at businesses in Scotland for example many of the ones that have been supplying the offshore oil and gas industry can pivot quite quickly to supporting renewables and green businesses the third element I think is knowledge so we are rolling out our carbon planner which is carbon footprinting capability to SMEs available not just to our customers but to any SME so it's a really useful framework to build knowledge I think the skills and capabilities of big area a lot of work that needs to be done there some foundational pieces I think exist but again SMEs need to be getting trained and competent people particularly around for example insulation installation or heat pump insulation. Market access I think is important so that they can work out where in the supply chain they can play how they can link up with the big organisations that are often creating the demand for the SMEs rather than direct to the consumer and then actually I think you know there's a lot of support out there it's just quite difficult to navigate your way towards the right support for the right activity so that piece of navigation I think is something that can be quite helpful and again I think that lends itself to place-based approaches but when we've looked at schemes in the north-east for England for example we find you know dozens and dozens of the multiple ones so streamlining those I think could be quite beneficial and then the second part of your question I think was around the how do we can ensure what are the kinds of opportunities and sectors? So the biggest I think is on the energy efficiency side of things and particularly around building a industry capability to retrofit the UK's homes and you know I wouldn't diminish how challenging that's going to be in a tight labour market but our report actually shows that there is a difference between standard jobs for SMEs pay of about 22,000 to green jobs of about 29,000 so there is a benefit for people's earning here if we can get them into those supply chains and maybe that means we have to make other parts of the economy more productive so you know how do we get people moving from less productive areas that can be automated to areas that are much harder to automate like energy insulation? The others I think are the opportunity around renewables particularly as the cost of solar comes down solar installation on buildings and homes again you know there is huge potential on on-shore wind it's been a very difficult policy area I think again lends itself to SME supply chains and place-based solutions and then I think feeding into a lot of the big businesses that are looking to decarbonise I think there's some really interesting activities around for example the circular economy I was on a panel with the business in the community promoting the circular economy for SMEs to build the business models of the future which is around a sharing economy or a reuse economy or a recycling economy so there's a few of the big things I mean the report actually details some of this quite well the analysis is is quite good so it's worth having a look at mining that information a little bit. Okay thanks very much. Heather if I can come to you I suppose along similar lines and you've spoken around you've spoken already about the need for joined upness and a clear landscape not having competing policies or messaging I'm just wondering we've heard about the new SMEs that the potential for emerging emerging businesses what is it that we need to be doing for existing SMEs to make sure that they are they are part of the picture as well rather than there will be there will be churn obviously there is going to be some churn but how do we support existing SMEs through this? I think we need to simplify things first and foremost and and you know just as you know we're working quite closely with so sage for common board you know terms it what are SMEs kind of engaged with all the time you know everybody says that SMEs don't have anything in common but it's actually not quite true they all do the taxes and have to file tax returns and all they'll have bank accounts and they all have an energy supply if not necessarily direct relationship with that energy supplier so we we very much have been looking at how then using those the two common factors that we know how do we actually reach and engage with SMEs and this is where I think that the kind of retail banking sector actually has that opportunity to James point about the the tools that they're using is the fact that everybody logs on to the bank accountant you know generally several times a week and what opportunities do we have there in terms of potentially signposting but then also working as we know the SMEs are much more likely to go to their accountant or their bookkeepers whatever for advice in in these areas and very much trusted advisors so then how do we make sure that there's kind of that consistency of messaging between your accountants and again we work very closely with ICAW ICAS as well around getting that similar messaging out to them and how do we bake something really simple into it do we just need an extra line you know in PNLs that looks at energy consumption and the intensity of your energy consumption so that kind of sits behind what you know the the intensity of the energy that you're actually consuming it does that just need to become part of your everyday accounting so it just becomes baked into the processes rather than becoming a burden because that's the things we SMEs don't have the time to to go up and and learn about this and anybody coming into this world you know it's acronyms soup I mean really it's like a foreign language for even for people that kind of work in around this industry so there's that there shouldn't be that much expectation on on consumers and SMEs to actually have to learn and if you look at a lot of signposts you can get right now you just get sent just links of acronyms and and different sites and stuff and so there's none of it you know just take it down and make it really simple something really clear if you work that into your reporting link it to business rates link it to your taxation if all of a sudden you've got a very simple way you know get a building passport for your premises all of these things nice and easy instead okay okay thank you and and finally Ben if I can come to you you mentioned in in one of your earlier responses the the sort of growing or potential growth for end customers for green investments green pensions that that kinds of things what are the levers that we should be looking at or are they leaders that we in scotland can do because obviously a lot of that is is reserved are they things that we can be doing to support businesses make those kinds of choices or widen out to the options fought for their workers those kinds of things yeah they definitely are if I just quickly on the previous point that I'd also add insurers to that list of businesses that SMEs would engage with on a regular basis and we published good practice guidance for our members in terms of where it's the small businesses in their supply chains for claim so you know repairers who do vehicle repairs in homes to try and solve or begin to solve that problem of SMEs getting flooded with information so I think that's that's really important I'd also add to that and this is less of a focus for the ABI but something we're looking at is I think thinking creatively about apprenticeships is a really important thing in that skills challenge and perhaps thinking about incentivising SMEs to think of apprenticeships perhaps a bit more broadly and not just as an entry point to employ them but something you do as a continuous professional development I think those are areas we could look at that can make a difference and perhaps thinking about flexible working and some of the stuff that's coming in there about as a way of allowing people to take on some of that training in a more measured way during their career and even if they're in the lower income so just just a couple of points on that but to go on to the to the pensions point what I think we're seeing is as I mentioned earlier a steady growth in consumer demand for people who are saying I want my pensions and other financial services products for particularly pensions to be green and that that's not the majority of customers at the moment but it is definitely growing and it's growing quickly enough for the pension sector to be looking at this as a great opportunity and something and consumer demand that they have to facilitate. I think the biggest challenge at the moment is that the evidence base for what isn't innocent green isn't always clear enough so to actually present someone a green pension that you can credibly back up and say objectively this is definitely green is challenging I think the terminology that people use is very varied so comparing products on a like for like basis is quite challenging so I suppose the good news there is that the in the UK across the UK the financial conduct authority is looking at this with its sustainable disclosure requirements and its investment labelling regime so that only kicks in originally for investment funds so not all products that ABI members will be putting into the pension market will be part of that from the first phase but we've indicated that we would support extending that further and that we'll definitely want to work with the SCA to to broaden that out really to as much the pension sector as possible I think that will help because then customers will have a single way of assessing what they're getting or it's been a confusion about what this is a transition investment and it's you know we're actually still invested in some high carbon assets but we're clear that they've got a pathway to net zero versus this is an impact investment in you know a wind fund or something that's been lost to be low carbon or or investments that are in low carbon but perhaps not really driving the transition the SCA I think is starting to solve that with its investment labelling so it should be clearer to customers what they're getting I'd then say at the end point going back to the previous discussions about what the people developing projects could do I think if they start to think of that as their framework for their evidence base and what they put out to the market that will allow investors the opportunity to say aha okay I can see how this will fit into my fund that's going to be marketed at this particular customer that's got this particular preference so I think if we start to see that SCA framework of those three labels appreciating that you know obviously there's a lot more complexity labels in reality when you look at the climate science but if you're trying to communicate with customers if we start to think of those three labels as a real glue that puts a lot of this together so that we can actually take the you know the investment in the project over here all the way through to an end customer who wants a green pension and they can understand exactly what they're getting I think that's going to be really really important the other area is probably employers and actually employers will often be the people who choose which pensions their customers get so allowing them to be engaged in this process and making them understand what the offerings are and I would expect so the time more employers to be saying this is a consumer this is a benefit to our consumers we will offer you a pension that is sustainable but aligned with your values so I think that's another market driver as well as just the individual savers is actually saying employers when they're choosing which pension they put there you know particularly if you're thinking of a someone who is entering the workforce now and is 22-23 starting to save into an auto-enrolment pension for the first time you know their pension won't mature until 2050 or after 2050 so you know they will be thinking about the world that they have to resiren so that's a very strong incentive to put that that consideration first and perhaps you know for the older customers who might be primarily focused on how am I actually going to fund a good retirement you know but we think about those different cohorts of customers a bit differently so I wouldn't want to oversell this and say that we've got you know a perfect solution where every customer who wants it can get a completely green pension at the moment but I think we've got good building blocks with the FCA regime I think we know that customer demand is growing and I think if we get some of the other things right that we've been discussing in this evidence session that will allow pension providers to offer you know a greater range of choice in terms of green and sustainable funds because this is clearly you know going to go back to James's point that this is the growth opportunity you know this is a growing market this is growing pool of investment opportunities so I'm optimistic this can work but clearly you know we recognise there's a lot more to do the ABI hopefully with our Parliament roadmap and some of the other things working on can can help to drive that in the sector great thank you Gordon MacDonald we've touched much upon the areas that I want to ask about but you'll be happy to know I've got one question with three parts so we're in a situation where retrofitting of housing stock is a great opportunity it's 2.6 million homes in Scotland when it retrofit 113,000 homes per year 99% of businesses in Scotland are SMEs so you talked about investment capital investment equity investment but many of these companies it's cash flow that kills them so my three questions are basically what more can you do finance and banking industry do to support SMEs to take up these opportunities in particular in relation to the cash flow problem secondly 75% of homes are either owner occupied or private lets I know from experience in one area we're currently two years into a refurbishment of 181 blocks of flats in the western hills area of my constituency many of the homeowners that live there are being asked for 40,000 pound contributions towards the external cladding and new roofs and insulation many of them can't afford it so what can mortgages or buy to let mortgages do to support that funding and lastly how do we encourage local job creation from investments from finance and the banking sector three easy questions okay well very very very very good questions and so so I think that the first point around you know access to finance I think and particularly on the supply chain side of things you know lending to SMEs comes down to credit worthiness obviously but there are supply chain and products that we can offer to customers in terms of short-term liquidity that support short-term liquidity around that I wonder whether the scope here for a little bit of you know maybe it's the British business bank and the squash equivalent to sort of co-lending into some of those supply chain challenges and cash flow issues that those SMEs have because then that you know helps unlock our financing and particularly if those sorts of institutions can take some first loss financing there. The second thing I think is around the 75 per cent house owner occupied and where the businesses can actually where the individuals can actually borrow and what we're looking at through this concept of a retrofit portal is getting additional borrowing facilities to those customers so that they can borrow on the back of the mortgage now there's been quite a lot of work done in the past around the green new deal and the way in which that money can be securitised and there's also some proposals around stamp duty that would facilitate some of those sorts of things so I think we need to get really serious about that and figure out ways to get that additional borrowing of facilities provided in a way that makes it secure debt as a low cost and again there's probably a bit of regulatory support that can be provided to get that capital recognised in the appropriate way and the other thing that I just and again I'm not a mortgage expert by any stretch of the imagination but I do wonder whether the problem that we have in the broker market in the mortgage industry means that we're effectively commoditising some of this mortgage lending and we're not really thinking about the long-term requirements of an individual customer and again I think that's something that you know we'll have to work on in terms of building those relationships with our customers so that they see us as the you know it's almost like a John Lewis guarantee of never knowing the undersold getting access to the best possible pricing for the finance over a long period of time and then the third point around encouraging local job creation well I think I think we have to prove that these jobs are good jobs they pay well they're fulfilling that they build individual skills and there's potential for career paths to come as a result of it and then that will attract people to go into that particular industry which you know and it probably needs to be supported by training and apprenticeship type schemes that can be rolled out you know locally and I think you know I think there's a bit that sort of says well you know let's make these jobs the ones that people really want to do you know not there's anything wrong with being a barista in a coffee shop but you know this has more purpose to it in terms of helping people get access to reduce their energy bills and to to live in a warm home and you know let's frame this argument about improving the quality of people's lives because they're able to live in affordable and warm homes which is you know right at the the most fundamental part of the mazlo's hierarchy of needs really. I was going to ask you Heather I looked at one of the reports she produced tooling up the green homes industry and three of the economic barriers is the cost of heat pumps the high quality survey costs and payback periods for retrofits etc. So I think that we can also think a bit more laterally that so in the States they've got a pace programme so if you imagine you're a young couple and you've just moved into your first home and you know that you're probably only going to be there three four years before you move on but last thing you want to do is spend an absolute fortune on a home that's going to have a 25 year payback period so can we actually start looking at it instead of attaching that that kind of debt and cost to you know the first movers who then move on actually attach it to the property so that you know where the next people move on they'll be costs associated and often that's kind of I think in the States they would see retrieve that via the taxation system you know seen so you know I guess the equivalent would be kind of something where you do the work but then you the occupants pay pay that back over a much longer period of time through the council tax system so you know something like that where you that upfront cost isn't borne by by the first movers is really important and then likewise leasing how do does heat just become a service you know we we still spend loads buying a buying servers and you know getting all your software packages and dot dot dot dot on and you had to upgrade them and it would break down and somebody would have to come in and fiddle around with it now we all just basically sign up and subscribe and have our kind of software service does heat become more of a service where that kind of infrastructure and that cost is is borne elsewhere and maybe you've got a longer for us now maybe you will be paying the same amount out but you've switched to you're paying off the capital of a leasing area so I think we have to think about just doing things differently to the cash flow point that really kind of moves that forward and until until that comes out or until the prices come down so significantly but I think you know with heat pumps we've all acknowledged particularly with our housing stock not being the most modern in the world it's not just a matter of changing you know swapping one boiler for the next there's a massive kind of infrastructure and disruption issue there and I mean I was everybody's probably sick of hearing about my house but I know that you know having looked at all this stuff and definitely I still live in a very drafty leaky house that I couldn't possibly afford to retrofit it to really do it properly and that's a barrier so you know coming from a point of relatively high knowledge about this stuff you know I'll still go back and put on quite a few jumpers at home rather than do the work because it's too disruptive and it's too expensive okay Ben yeah I think uh the previous bonus have covered a lot of this particularly your points around around the cost but I suppose I'd make two points which is one don't just think about retrofitting also think about adaptation and resilience to the impacts of climate change where there's going to be a lot of work needed to do so try and think about where the where these are opportunities for this change waiting to be the skills base to to think more broadly than just retrofitting and all the things we can do to make our homes more resilient to extreme weather and if we can build all that in together again I think it goes to James's point that it's become to the increasingly attractive proposition that I think to people who are thinking about their careers and the other point I'd make is really focus on ongoing maintenance for some of this stuff and the skills that will be required to do that so rather than just seeing it as an installation challenge I think hopefully that that makes it more attractive again as this is an ongoing long-term career option rather than just a one-off installation job and then that will move on so that that again might make the people who are considering investing in the skills a more attractive so and also ultimately that's going to be beneficial to the insurance sector because ultimately we will be picking up the cost of anything that goes wrong so we see that as very important but I think that the sort of ongoing maintenance and the endowment to adaptation resilience are really important I think I've also just echoed my previous point about apprenticeships which is if we can do more to make those more attractive to individual employees perhaps by supporting them not just with the cost but also with entitlement to some flexible work until they can do this training I think that makes it more an attractive proposition but as I say I think probably the role for the insurance in the upfront costing that you mentioned particularly for estimate would probably cost a more limited role but not none entirely and again linking that to my point that I made earlier that one point where someone might make a decision that they otherwise wouldn't have done in their home is when they've had a major claim that they weren't expecting so if they have had a fire or more flooding or even just a significant leak they might be more willing to get major work done than otherwise and go using the example of my own I'm not particularly attracted at this point by the prospects I think builders in for months but you know if I did have a really major incident then I'd probably think actually I can have this other stuff on as well so that might be an opportunity not to lose that when we're prioritising people. Thanks, Camilla. Cora Hyslop, would you like to come in? Thank you and this has been fascinating and really informative so I very much appreciate you joining us. I'm going to start at the macro level and I'm interested in what you're saying about decisions that Governments can make that can make things happen and we're expecting the response UK response, Government response to the Skidmore report, that point about delivery plan and we hope in Scotland a decision around Acorn for track 2 because that shifts the dial considerably for Grangemouth which is the focus of this inquiry so I suppose it's what are the types of decisions that are needed to unlock in terms of policy terms and even looking at in terms of what we've been discussing around heating buildings the gas boiler decision by the UK Government is not due to 2026 bringing that forward that's the type of thing I'd quite be interested in the type of decisions that would kind of help us move this and it's about that investment in advance of need so I'm also the deputy community of the net zero committee and you were currently looking at the electricity infrastructure is it an abler or inhibitor and even off-gen just now doesn't have a net zero policy focus if it did then it might help some of that investment and some of that investment in grid helps us really shift on hydrogen and hydrogen is a big focus for what we're looking at at Grangemouth so it's almost to help us illustrate the types of decisions that you're talking about from Government that can help move things clearly some of them are new key and reserved areas some are developed so we're about to get a circular economy bill so that might help so it may be helpful if you illustrate what you meant by that the type of decisions so who wants to start Heather yes certainly so so I think baking a net zero objective into kind of everyday decision making across all all departments and and branches and then having a kind of overseas you know open department that make sure that those are all joined up is you know a starter making sure that everybody's kind of working to the same frameworks is a very basic though again it's back to basics what are we actually measuring here making sure that I mean one of the things that we're looking at and this is certainly you know this is more at a company law level but do we need clear direction on what fidishory duty actually means in the boardroom so you know a lot of times we've seen fidishory duty uses as a almost a fig leaf for certain decisions that we would not consider to be fantastic or the most beneficial saying well you know we've got our shareholders to look after all actually we know that actually within law it is other stakeholders do we need to actually really focus that those kind of board level decisions especially for businesses on what fidishory what their duty actually means and is that a wider duty so there's some really interesting kind of almost very targeted things you can do to unlock and then and then just going back to other policy signals like the EV I mean that is time and time again cited as a very good I think so it was a simple policy and it was a clear policy and of course you know sat within one department that always helps but it's really moved the dial on things and so I think keeping keeping things very very targeted and having the framework to kind of understand the progress is really important because right now it's it's falling in the too difficult box for a lot of people James any examples I mean it I think you know it's worth just sort of reflecting on what's gone well and what's not gone so well I mean I you know in 2015 there was a sort of agreement that houses would all be up to a certain standard heading towards net zero which sort of means that for the last eight years we've actually been building houses that aren't and you know those sorts of residing on policy I think that do send weak signals and so there is a real confidence building measure to be built and consistency to be applied that I think is really really important and I think also the other thing is you know getting industry on board around that as well and industry in its broader sense you know I think if I look at us in the banking sector for example I chair the UK finance sustainability committee and we have a really good dialogue around some of the really important issues that we want to present to government so that they understand where the banking sector and the finance sector in the UK is coming from and and I think the other point is not everybody can do everything but everybody needs to do something and I think then you know the policy makers who sit at the top of the tree can kind of work out how to piece those together in a way that is coordinated and consistent with existing ambitions and law you know we've we've got this in law so let's execute to deliver the law that already exists anything Ben in terms of that there's a few things I would cite I've mentioned transition plans obviously that's a UK government kind of initiative but I think it'd be really a really significant signal if parts of the public sector said we will use a similar framework and publish our own transition plans at the same point I think another signal governments could send is a really strong desire to review what's happening with those transition plans and use the evidence so businesses that are investing time and effort writing them see them as a tool that's not just there for potential investors to assess their progress or their campaigners to look at how they're doing but actually that when they when they flag up a concern or an area of uncertainty that gets addressed and I'm hopeful that the transition plans will actually surface some of those tensions and areas where actually there's a pinch point and the decision needs to get made so a really clear signal about how those transition plans are going to be reviewed and used in policy making I think would help and give businesses confidence and I think hopefully that some of that would flow out of actually the points previous panelists have made around you know when the dates are coming and when you want them to be made actually putting that really clearly so everyone can bake into their transition plan okay we know this decision is coming in 2026 here's what we need to do to prepare for that potential decision and that unique point and our role in it and here are the implications if you go in a different direction that maybe don't take that decision I think that's one so transition plan is really important I think the other part that is less around long-term government planning but I think you know there will be a lot of businesses and boardrooms that are looking at their next zero targets and thinking you know we made these in good faith back in in the build-up to COP 2026 just COP 26 and we made those we made those targets and commitments in good faith we've invested a lot of time and effort internally and sort of verifying them but we were working on the assumption that we would have alternative things to invest in to meet those targets so if governments could really focus and I know it goes slightly against the idea of having an overarching objective but bringing some things forward and saying actually let's have some investable opportunities let's pick some areas that are relatively advanced and give them that extra nudge they need so they're ready to go to market as quickly as possible I think that will keep the momentum going and I think in the business community you'll see that confidence to say okay we've made these next zero targets and now we're able to point at things that we've done and investments that we've made that are actually going to help us meet these targets so keep that sense of momentum that's going so perhaps it is about thinking you know obviously we do want an overall strategy but actually starting to look really critique and say where are the things that are quite close and they just need an extra bit of a nudge to get them open the line and get them ready to be investable and give people those opportunities I think that will really help build the momentum and make people feel like you know this wasn't something that happened up to COP 26 when everyone was interested and it was here in the UK and now we've lost the momentum and actually you know boardrooms should be focusing elsewhere I think that we can keep saying to people that this is a moving agenda that would really help so I think those two things in particular I think we've mentioned a few other things that governments can do but I think that those are two things that hopefully you know the Scottish government can do with the stakeholders that they represent as much as the UK government can do and if I could I think the other third area is clearly for some of the investments that pension funds will be making they will ultimately need regulatory approval from the PRA absolutely correctly because you know they're managing pension savers money I don't think it will be appropriate to start kind of making those assessments that the PRA does not based on genuine assessments of the risk but I think one thing that we could really do is to be very proactive in saying again these are the investment opportunities that we prioritise this is where we're likely to go to market in two or three years time and be looking for pension funds to invest working closely with the bank of England so they have all the information that they need to make those decisions quickly I think will be really good particularly if they're looking at potentially approving a new asset class I think the more work pre-work you can do in advance so that those decisions happen quickly and ultimately the PRA is going to take the right assessment in terms of whether or not that's an appropriate risk for someone's pension assets to be invested in but I would say that the more proactive you can be in actually getting those asset classes approved and having those conversations with the PRA and I think that links broadly and it's something that's in the Chriskidmore review is really getting all the regulators around the table in a more regular and perhaps coordinated fashion that feels to me and I'd give the transition plans task force an example of this the financial services regulators have been really engaged it doesn't feel as if some of the utility regulators or other real economy regulators are quite as engaged but ultimately then producing transition plans is just as important as banks and insurers producing them so I think we really need to see whether these big initiatives that are being driven we've got to make sure that it's the whole of the economy and not just you know sub sectors they're not just finance not just initiatives they're driven at the energy company so everyone is working in the same direction so the more that we can see that all the different regulators are working together that will be really helpful so that's a very good oversight as to kind of the bigger aspects that need dealt with I'm very taken by your agreement that place-based approaches can really work and I think how we how we translate that into the just transition plans due for Gravesmouse is going to be really interesting and it's convening power and it's interesting I think ABI actually are conveners because everybody needs house insurance there is something around you know everybody needs a mortgage but there's a mortgage stay with the person who decides what the building but if you take grade wealth as a place I mean it's a fascinating one to to be a first mover in how do you do everything as in heat transport you've got an industrial site at the biggest in in Scotland most of the people who work who work at the site live within 10 miles who have been told that it's very kind of so there's something very geographical about that and most of the housing I defer to the constituency MSP I think is 19 you know post 1950s so the point about so there's something around how do you convene that and then do that in a place space and I trust to do it for the private sector not just social housing which would be easier to do so is that investable to do things on a geographic as a package and you've got Alexander Dennis the bus company does hydrogen so there's like an interesting aspect of industry as an anchor you've got a major anchor industrial site and you know you can see and this may be not beyond the realms of possibility but we get blue hydrogen then green hydrogen hydrogen may not be for housing everywhere but maybe a district for that area because of you know get a corn through etc so how ambitious is that is that realistic to try and see if we can you know to to have it use the convening power of whether it's local government or whoever it is to do something and that or is that too small it's going towards too small but then you've got this major and you know major industrial site could that work together is that certainly don't think it's too ambitious to the point there's there is a lot of money out there looking for you know specific projects where they can see and that there will be a benefit you know not only a financial return and that's often you know coming in and doing something in conjunction with government can obviously help reduce some of that risk but being able to kind of demonstrably kind of show that it has a positive kind of social and environmental impact is really important and so something on that scale I think would actually be quite exciting and you'd probably have people kind of biting your hand off to to partner up in a really joined up way as well and showing how you know we need to kind of don't use the example trends but you know you don't want utilities coming around and digging up the road and filling it back in and then another one coming around and digging up the road and filling it back in and that getting a really joined up approach would be a massive opportunity to see and certainly from our members perspective that's a lot of them are talking about opportunities like that and looking at how do they have you know partner up with with city councils and what not I think that the key point is designing with the future in mind you know that again you know if I'm thinking of taking something like that to my risk committees it's well you know they'll ask me why do we think this is going to be viable in the long term and that sort of working back from 2030 in terms of what that particular part of the you know economy will look like and giving people confidence that that's going to be viable for the long term and an important part of you know the next 30 years of industrial kind of development I think is a very powerful way of starting to do risk it and if you get some government money through it if you can turn it into an investment zone you know those sorts of things all all help with that respect and I can't help but think about you know what might have happened in economic history you know when you look at sort of the industries of the industrial revolution in the northwest in the milling industry I mean I'm not sure we'd want to replicate all of that but that's how those clusters form similarly you know chocolate in in york and you know the power of round trees and the work that they did and you know cabarets in to create not just businesses but communities it's quite it's quite interesting I think so it's back back to the future potentially in a different way yeah I'm not sure that particularly to be quoted is there anything Ben you want to to see on that is that does that sound attractive I think I think again definitely agree with the place-based approach and I sort of put this into thinking about how individual businesses might be thinking about some of the next zero opportunities a lot of them will say you know it's one thing to sort of sit down with your carbon accounting and loads of spreadsheets and come up with a target and a pathway that says it's how we're going to get to net zero but actually it becomes exciting for a business when they're bringing all their different functions and thinking this is what our business model looks like in the net zero economy this is how we bring all the view into that and this is how your roles could impact that in these decisions so the model you were describing you know is almost doing that at a scale of a place and really starting to think about what his range of mouth going to look like in a net zero economy what are the business opportunities so that everyone can then come in and say actually I can see my role in that I can see where my business can help I can see products that we can we can build and develop that would support that solution so I think having that vision of actually what it will look like in the future and that model that you're working towards rather than just step by step is really important that can get more people to buy in get more creativity and actually you may find businesses that we haven't even considered in the context of this inquiry coming in and saying actually we're really important to this so I think that's really important and then perhaps in a more practical sense about how do you get investment in that kind of model I think one of the key things there is is that again you know there are there might be challenges about individual bits of that project and they need to demonstrate their creditworthiness to get debt financing or whatever but actually where we can use something like a municipal bond is one of the ways a practical step that you could do as a you know a financier involved in that project to say actually that's how we get the kind of scaled investment that's perhaps not linked to the individual project but it's linked to this as a concept linked to the place based solutions so I think if we can develop those kind of models of municipal bonds and other ways for investors to come in at scale that are perhaps less linked to each individual part of the picture succeeding again that helps you with that managing the risk so it feels to me green and municipal bonds and you know there are various papers out there about how you develop those but you know they are not easy but they are definitely doable and I think that's the model to go by and that's where you would I think hopefully see lots more AVI members in the institution investing side coming in and say yeah we would want to be involved in that thank you my degree is economic history and I think there's something I think would be pretty wonderful if the place that is one of the first place movers on this it's only miles from the birthplace of the industrial revolution at the Karen fireworks in Falkirk it's only 10 miles away where oil was first discovered which was Winchborough and it was shale oil so there's something actually quite about saying let's imagine that you know that reengineering of future in a place based approach and I guess it just sort of be a bit more explicit I'm thinking of the relationship between the paternalistic relationship between you know businesses and their employees and their communities and you know not everything was was was right there but there was some really good work that was done but that's that's what I think of that as well and I mean in a good model also the mills at New Lanark in terms of actually how do you actually then improve the you know you take everybody with you you know and that's what would be I think we're wrestling with is it what is a just transition it's not just the business it's the community around it as well but thank you thank you very much very quickly that that having that consistent framework and and understanding of the transition plans moving forward is what is the the magic kind of source I think within all of this that gets everybody to get to that level of buy-in that we need and also to to manage the risk and understand the fluctuations that will inevitably happen in the process I'm conscious of time but I think Ben might have wanted to come in. It is linked to Fiona's line of questioning and I mean because the government are due to publish the draft just transition plan for Grangemise we'd expect that in the late probably late spring now and part of our reason for doing the inquiry is to feed into that proposals. What expectations do you have of the draft plan for Grangemise? Is there things in it you particularly want to see at this stage and I might come to Ben first of all as it falls on from Fiona's question today in place making? Yeah I think one it's it's entirely the right thing to be doing so we'd certainly welcome it as a sector. I think two one of the key things to emphasise is some of that timeline as much as it can be to the developed to have a similar format and structure to the transition plans businesses are are developing or at very least provide them with the information that they would need to inform their decision making that would make it more usable and so they can actually practically build it into their own plans so using a similar structure would be really helpful I think a sense of actually where there are those collective things like municipal bonds and where those opportunities are really really important I think also the point I was about to make previously actually is relevant around that sort of citizen and local community engagement the real structure for doing that now clearly that needs to be done democratically it's not that businesses to kind of co-opt to their needs but you know one of the things businesses always need is rich information on what their customers and their potential customers really want so having a structure like this where actually the local community are giving a real strong way to set their preferences and understand what they want and what their needs would be can also help the business creative so I think it's an opportunity there to to reflect on it and I think so to build on that the other key thing that you need from a just transition plan I think is the opportunity to write it again to publish it reflect on it take take more input see if it's working and come back to it so a structure for ongoing decision making is really important rather than just seeing it's the plan's done now we're into implementation you know I think it's got to be something that you really see as a live process for continuing to bring people into the conversation. Thank you and Heather do you have any there is a draft plan so there will be a consultation phase following the publication of the plan but what's the kind of guidance principles or the you know what's the kind of statements do you want to see in the draft plan so so I'd actually agree with Ben just in terms of making sure that what that it's about the structure of the plan to a certain extent because if and I would highly highly encourage engaging with the transition plan task force who are working obviously out of I think probably Desnez is what it is now but you know that there's a lot of work going on to make sure that there's an element of consistency between these and lastly we want to be doing is is reinventing things exactly you know you've got corporates and you've got where the money is going to be coming from and a lot of people actually doing that the work that are all working towards the kind of having that comparable structure right and I think more than just the the actual details of it it's making sure that there is that consistency and look across because so much of what we're doing in this area nobody's comparing apples with apples you know it's a kind of tropical fruit salad of different things going on and we need to get it down to to consistency that it's understandable and then James is supposed to put a similar question around the draft plan there's also the Grangemouth Future Industry Board which we've heard about during this process which is largely public bodies brought together to co-ordinate I mean I think they do have intentions to I think last week they were asked around the role of the private sector they yeah they said it could be reviewed I think Scottish Enterprise said last week that we asked them about how do you ensure collaboration with the private sector as well as the public sector and said that it could be reviewed so that was your views of the draft plan what you would like to see in the draft plan and then do you have any or have any of you had engagement with the Grangemouth Future Industry Board? I don't believe I mean I'll check with our colleagues but certainly I haven't had contact with the board but we'll check with our colleagues you know I think the most important thing is to be clear around the vision you know what is it that we want Grangemouth to be because that vision then will actually set the parameters for the plan and there's you know going to be multiple ways to get to that vision but at least if you've got clarity around the vision and the mission you know as well I really am taken by this work that Skidmore's done on you know mission zero related activity of great work by Marianna Mazucato as well as the role between the public sector and the private sector on mission related activities and then the strategy will follow okay thank you thank you very much to the witnesses for the evidence this morning it's much appreciated and we'll now move into private session