Business comment: Time to back up commitment to sustainable change with real action
Scotland has long been seen as a nation of ambition, contributing big ideas and new technologies on the global stage that belied its relatively small stature.
While people often point to the achievements and innovations of the industrial era, there have been plenty of recent examples. In fact, three of the last six Nobel Prize winners in chemistry have been Scots and our commitment to green energy and cutting carbon emissions have been world-leading, in many respects.
With COP26 now a few months behind us and in the face of what may be our biggest ever challenge, the need for turning bold promises into real action has seldom been greater. However, the effects of rising temperatures are just one side of the multi-faceted issue of climate change. To become truly sustainable, we must ensure a transition that reflects all four pillars of sustainability: not just environmental progress but human, social, and economic transformation too.
While more than two decades may seem like a long time away, Scotland’s pledge to achieve net zero carbon emissions by 2045 will be a significant undertaking that requires serious timely action. It will rely on all aspects of Scotland’s economy and society working together: policies that encourage behavioural change, businesses investing in green technologies, and each of us re-considering what and how we consume.
From a policy perspective, we will need to make bold choices, bringing in policies that move businesses, entrepreneurs, and individuals in the right direction. We can look to other parts of the world for inspiration: the likes of the Netherlands and the Nordic nations have taken some big steps towards transitioning their economies away from fossil fuels through greater use of alternative, bio-based materials.
We can even look to the USA, despite it having one of the highest carbon emissions per capita in the western world. The US Department of Agriculture’s BioPreferred programme, which aims to increase the purchase and use of bio-based products, is one of the best examples of policy driving meaningful behavioural change.
Not only does it reduce the country’s reliance on petroleum-derived products, the programme helps to create new markets for farm commodities as well as more sustainable jobs. In the 2019 Economic Impact Analysis of the US Biobased Products Industry, the USDA reported the biobased products industry value to the US economy was $470 billion (£360bn), with the industry employing some 4.6 million workers.
Equally, turning commitment into action requires significant financial investment. To change the current fossil-based carbon status quo, we need an alternative and sustainable source of carbon for the products and processes of the future - a “bio-economy” - which will require a commitment to long-term research and development (R&D). This is no mean feat at a time when organisations around the globe face squeezed budgets.
We are, however, starting from a comparatively low point on that front. In 2019, the latest available data, Scotland’s gross expenditure on R&D (GERD) was £2.79 billion – the equivalent of 1.66 per cent of gross domestic product (GDP). Consistent with the previous year, the figure remains behind the UK’s overall investment of 1.74 per cent of GDP in R&D, the European Union average of 2.1 per cent, and the OECD’s 2.47 per cent.
We, therefore, need to channel as much of our resources as we can towards efforts that fight climate change. In practice, this means policy choices that ensure we reach net zero ahead of 2045, a financial commitment to research and infrastructure that takes us in that direction. Companies and academics alike need long-term funding that is focused on delivering long-term sustainable impact. Some of these pieces of the puzzle are still missing, but we are striving to drive this agenda forward. IBioIC has invested £6.4 million since 2014 in innovative collaborations bringing industry and academia together, resulting in £28.5m in leveraged activity.
In addition to Scotland’s innovation centres, the UK Catapult programme and Germany’s Fraunhofer Institute, are great examples of collaborative infrastructure. The National Manufacturing Institute Scotland (NMIS) is driving world-leading research in modern manufacturing and engineering, supporting government aims of increasing its share of GDP.
The financial architecture behind such initiatives needs to support that long-term perspective as well. For instance, Scotland’s net zero and just transition economic plans will likely require larger and more flexible funding pots that can be used and administered on a longer-term basis to evidence sustainability impacts. We cannot become hung up on delivering short-term performance or set rigid funding criteria for a challenge that is continually evolving.
Priorities should be aligned to the Scottish Government’s new market opportunities outlined in the National Strategy for Economic Transformation, including renewable energy, the hydrogen economy, high-value manufacturing, space, industrial biotechnology, photonics and quantum, digital technology, and life sciences among other sectors.
From our relatively recent experience of seeing the meaningful economic impact made in sectors critical to the future of Scotland’s economy, success has clearly come from focusing on long-term, challenge-led, and ambitious funding programmes at scale to ensure maximum impact. Ultimately, if we are going to make ambitious commitments to the biggest challenge of our time, then we have to match the scale of commitment domestically with concrete action, resources, and the innovation necessary to deliver it.- Mark Bustard, CEO at the Industrial Biotechnology Innovation Centre (IBioIC)
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