Scotland’s long hoped for just transition to a sustainable economy won’t happen without a transformation in both the quantity and quality of investment. There’s no doubt of the potential for high quality jobs and community renewal flowing from climate action. According to CBI Economics, Scotland already has the largest share of jobs coming from the net zero economy in the UK, with employment growing about a fifth between 2022 and 2024, supporting over 100,000 FTE jobs (some 3.8% of the total).

This Wednesday, leaders and practitioners from across the public and private sectors, trade unions and civil society, will gather in Edinburgh for the first national summit on just transition. Convened by the Just Transition Commission, we hope to establish common ground on how a clean and nature positive economy can be built fairly, based on real world experience.

Investment is the crucial piece in the puzzle. Estimates suggest around £40 billion a year needs to be invested in Scotland’s green economy across agriculture and nature, energy and industry, buildings and transport. With the right policy frameworks, public finance leadership and private capital innovation, further job expansion can be delivered with strong working conditions and benefits distributed broadly through society. Here, Scotland has some distinctive just transition strengths, including the growth in shared and community ownership of renewables.

Ahead of the summit, the Commission has pulled together examples of how just transition can be delivered in practice [ADD Link]. One of these is XLCC, a new company focused on making the crucial subsea HDVC cables for offshore wind. XLCC is building its site at Hunterston on a former coal yard and projects 1200 jobs will be created. The company is putting a priority on skill development, applies the Fair Work First framework as a foundation and has signed a recognition agreement with the GMB trade union. Its financing brings together public and private capital with £150mn raised so far, with £20mn injected by Scottish National Investment Bank (SNIB) and a further £20mn from the UK National Wealth Fund (NWF). Other compelling investments with just transition outcomes include those announced within Scotland’s two Green Freeports, most notably at Ardersier and Nigg.

Yet it’s hard to ignore the reality that the investment engine for just transition is still not purring. Overall, Scotland has a structural problem with low levels of investment. This provides a poor backdrop at a time when rising capital costs, policy missteps, sluggish planning, investor caution and insufficient focus on social infrastructure are holding back the investment that’s needed. This year’s closure of Grangemouth’s refinery has symbolised the inability to date of business and government to get ahead of the inevitable oil and gas decline – even with a new Just Transition fund now established for the area. The risk is that further hollowing out could continue in the North Sea without urgent efforts to support oil and gas workers into clean energy, particularly by building up homegrown supply chains (as well as wider transition activities such as construction and retrofit). The decline in oil and gas is longstanding, inevitable and structural. Rather than being a cause of the North Sea’s woes, net zero is the most likely saviour with projections that more clean energy jobs can be created than will be lost in oil and gas. But this won’t happen on its own. The UK’s new Clean Energy Jobs Plan is in effect a just transition strategy, one element of which is £20mn for oil and gas workers in Scotland and England.

What’s clear is that Scottish and UK governments, along with the wider investment community and civil society, have to make progress on three financial fronts to propel the just transition into the operational mainstream.

First, we need a refreshed strategic investment framework with a clear sense of the different types of public, private and citizen investment that’s required and how it will be mobilised in today’s disrupted world. This means a stronger green industrial policy, deploying the full range of the policy levers the Scottish Government has to shape markets and attract capital. Ultimately, the approach has to be rooted in specific communities so that the just transition aligns with the drive for place-based investment by pension funds and others.

Second, a clearsighted strategy is required on how precious public investment can be most catalytic. This means converging towards a shared approach to the just transition from SNIB to Scottish Enterprise, from the NWF to Great British Energy (GBE). As part of this, what are known as just transition conditionalities need to be applied as coherently as possible to ensure public investment delivers fair work and community benefit [Link to JTC report]. SNIB has just transition in its articles of association: the priority now is implementation. The new GBE also has workforce and community goals written into its strategic mandate, combined with provisions to respect labour rights along international supply chains.

And third, private finance will form the bulk of required investment and so must also integrate just transition principles as core to climate action. Scottish firms like SSE have been at the vanguard with one of the world’s first just transition strategies focusing on both the phase out of fossil fuels and the scale up of clean energy. Now the social dimension needs to be embedded in Scotland’s new Transition Finance alliance which brings together 40 institutions. This means banks, investors and companies incorporating social commitments into their transition plans around fairness for workers, communities, enterprises and consumers, and allocating the capital to deliver.

With a new Climate Change Plan expected in draft very soon, it’s especially urgent to show that the numbers add up and that investments to deliver climate action in Scotland will pay off for workers, communities and businesses across the country.

Nick Robins is founder of the Just Transition Finance Lab at the London School of Economics and a member of Scotland’s Just Transition Commission

This article was published in The Herald on 26 October 2025.