Karen Peattie reports from the Scottish National Investment Bank’s Investing with Impact: A Catalyst for Change conference in Glasgow.
With an ambition to be transformative and provide development capital to Scottish firms engage in three core pillars – the drive to net zero, tackling place-based inequality, and supporting innovation – the Scottish National Investment Bank (SNIB) set out its stall to before an audience of delegates from across the business spectrum in Glasgow today.
Investors and entrepreneurs joined representatives from the technology, property, construction, finance, legal, public sector, and green industries in Scotland – and more – for the Bank’s annual conference in partnership with The Herald.
Investing with Impact: A Catalyst for Change shone a spotlight on the Bank’s growth and development since it was set up nearly five years ago – and explored some of the areas in which its investments are already making a difference. To date, it has deployed £706 million of capital investment into a portfolio of businesses and projects, each with a goal to contribute in some way to its core missions, ranging from renewable energy and battery technology to port infrastructure and affordable housing.
With its role to foster innovation and help meet climate change targets – backed by £2 billion of Scottish Government funding to be spent over 10 years – there was much to discuss at the conference which welcomed Myrtle Dawes, chief executive officer of the Aberdeen-based not-for-profit Net Zero Technology Centre (NZTC), as the keynote speaker.
Setting the scene for the day-long conference, David Ritchie, the Bank’s chief strategy officer, said every investment it makes must work around its core missions. He highlighted Haventus, the owner of Ardersier Port near Inverness, which is developing the energy transition facility to boost offshore wind capability, as a prime example.
Haventus, a member of the Inverness and Cromarty Firth Green Freeport (ICFGF) consortium, last year secured a £100m joint credit facility from the Bank and National Wealth Fund (NWF) with £50m investment from each.
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He also pointed to the Bank’s first investment in housing, to the Mid-Market Rent strategy fund (New Avenue Living) managed by Thriving Investments, the social value and ESG-focused real estate fund manager. It has a mandate to build over 1,000 high-quality, energy-efficient homes within close proximity to major Scottish city centres, which are rented out at a lower rate than is available in the private rental market, helping to deliver the much-needed supply of affordable homes.
During a panel session titled “Impact investing – what it means in reality, why it matters and sources of capital”, the focus was to explain what impact investing is and how investing in this way actually leads to better returns for investors.
Panellist Emma Thorne, a private equity partner at Bridges Fund Management, pointed out that everyone has their own interpretation of what impact investment is and how they measure it but agreed with Nick Moon, chair of Circulate Capital, who said: “The difference is intentionality. It is investing for good, whereas non-impact investing is for commercial benefit without the positive intent.”
Better Society Capital’s chief investment officer Anna Shiel added: “Measurability is key to understanding what impact investment is and there are so many good examples of best practice in this space.”
For Kaisie Rayner of A Future Worth Living In, who has vast experience in finance and works with financial institutions to help them understand sustainability and their role in the transition to a low-carbon economy, it was important for companies to have a clear definition of what impact investing is. “Fundamentally, all investments have an impact,” she told the audience.
During her keynote address, Myrtle Dawes recalled that when she started out in her career in the oil and gas industry, “even then we were thinking about what are we going to the next”, adding: “As I moved on we were talking about pollution in the sea, the ozone layer and the Kyoto Protocol [an agreement between countries to reduce greenhouse gas emissions and slow climate change, adopted in 1997 and brought into effect in 2005]. We knew the difficulties of the task in front of us.”
The transition to clean energy, she said, “was never going to be easy” and that government targets are “hard but achievable”, adding: “The other thing about energy transition is that we are looking something that is more integrated and complex.”
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Cutting-edge technology, Ms Dawes said, was helping to accelerate the energy transition to net zero. As an example, she pointed to a collaborative project to power subsea equipment with wave power and subsea energy storage in the north of Scotland.
The £2m project saw a Blue X wave energy converter – built by Edinburgh company Mocean Energy – with a Halo underwater battery developed by Aberdeen intelligent energy management specialist Verlume. “We are living in a world powered by technology innovation – tech is driving the energy transition,” she said.
Conference host Zara Janjua fielded questions from the audience which covered a wide range of issues, from barriers to transitioning to clean energy, the skills gap, and hydropower.
In a lively panel session titled “Scaling up businesses for international markets”, investor and entrepreneur Mark Bamforth, entrepreneur and chair of Vistage Group Julie Grieve, and Georgy Egorov, chief financial officer of ZeroAvia, explored how businesses can attract overseas investment and operate globally.
Drawing on his vast experience, Mr Bamforth, who is chair of Thairm Bio (Scotland), a trust that invests in early-stage life sciences business in the UK and US, said investors – particularly in the US – are looking to invest in teams with expertise, technology and proof of concept.
He said: “What is the market opportunity? Looking at Scottish companies, do they understand what it takes to get into international markets? Life sciences is tough. In the US, which is a large market, you have to build up knowledge and having the right mindset is key – but there are investors out there.”
Speaking about her business journey, Ms Grieve, who established and exited Criton, an Edinburgh travel technology company which was acquired by global hospitality solutions vendor Nonius, explained that her ambition had always been for her business to operate globally.
She said that while technology had enabled the hospitality sector to grow it would always remain a relationships-based industry and when scaling up the business that had been very important.
For Mr Egorov, whose company has been successful in attracting international funding and has bases in both the US and UK, told the audience that “we live in a different world right now and long gone are the days when investors would come to you”, adding: “The questions now are all about profitability.”
Previously with Exscientia, the high-profile University of Dundee spin-out and one of the most successful UK life sciences companies to emerge from UK higher education, said: “We realised that the US market was huge and that we had to be better than what was available in that market.
“You have to be agile and efficient. We had to be innovative about our business model. The simple answer is you have to be better than everyone else.”
A series of quick-fire presentations followed with Nicola Douglas, executive director – sustainable investment at SNIB stepping in to chair the session which heard from Jonathan Burridge, founder and chief executive officer of Glasgow-based real estate ESG firm Utopi, Emma Marriott, chief operating officer of Connect Three which works with companies and organisations to create inspirational leaders who build businesses that are great places to work, and Iain Valentine, chair of NXD.
Focusing on how businesses must drive the best culture with the right people to deliver success, and how the right leadership teams can take a business to the next level, Mr Burridge spoke about his firm’s approach. “We are trying to create a winning culture,” he said. “It is OK to talk about mission and vision – but support and values are equally important.
“As we have evolved in the last two years we have had to make changes. Strategy evolves. Every week we are learning something new about the business. Change is inevitable when you are building your team for growth and even before you scale you need to have the right people in place – and you need to be brave, be bold.”
For Connect Three’s Ms Marriott, companies had to weight up the “will versus skill” argument and identify behaviours you value and need”. She said: It is important to find the right people.”
As creative director, co-owner and managing partner of Edinburgh creative digital agency Whitespace (now Dentsu Creative) for 17 years, Mr Valentine was always clear about his vision for the business. “We had fantastic creative talent,” he said, “but we also had clear aims and that was to create the best place work and have the best people.”
The final session of the day, hosted by Sara Thiam of Prosper, focused on housing as an essential lever for economic prosperity across Scotland with the need for homes for workers, and the commercial opportunities, apparent. This panel featured James Blakey, planning director at Moda Group, William Kyle, fund director at Thriving Investments, and chief executive of Homes for Scotland, Jane Wood.
Catherine Salmond, editor of The Herald and Willie Watt, chair of the Scottish National Investment Bank, closed the conference by rounding up the day’s discussions.