This is the first in a three-part feature series exploring Scotland’s green financial revolution. This article focuses on retrofitting existing infrastructure to meet sustainability goals. The second article will delve into broader green finance investments, while the final piece will explore Scotland’s efforts to build a world-class workforce in sustainable finance.
As Scotland aims for net-zero emissions by 2045, retrofitting existing infrastructure is a cornerstone of its sustainability strategy. From public buildings to private residences, retrofitting addresses energy efficiency reduces carbon emissions, and is a key driver in green finance initiatives. The Scottish Taskforce for Green and Sustainable Financial Services has identified that financing these retrofits is necessary and a significant opportunity to align public and private sector funding toward impactful projects.
The Scottish Government has earmarked over $1.94 billion for energy efficiency and clean heat projects in the current parliamentary term, targeting retrofitting across public properties, social housing, and private homes. Yet, the demand has quickly outstripped supply, with some schemes already fully subscribed for this financial year. For example, Lloyds Banking Group surpassed its sustainability financing target a year early, contributing $18.3 billion in funding for corporate and institutional clients, with $12.2 billion allocated explicitly to homes with an Energy Performance Certificate (EPC) rating of A or B.
Fintech innovators are leading the way in simplifying and expanding access to retrofit financing. One standout example is the Edinburgh-based SNUGG, which launched the Green Home Hub—a digital platform designed to connect homeowners with financial institutions and energy providers. This platform, awarded nearly $2.44 million in funding by the UK Government’s Department for Energy Security & Net Zero, offers personalized recommendations for retrofitting and simplifies the financing process.
Despite increased bank commitments to green financing, significant hurdles remain, particularly regarding project coordination and regulatory challenges. The Taskforce identified that one of the key issues preventing the flow of funds is the complex nature of aligning public institutions, regulatory bodies, and private investors. For example, while banks such as Lloyds and NatWest have made significant financial commitments, logistical barriers—like securing grid connections for wind farms—delay investment.
To overcome these obstacles, the Taskforce recommends establishing a dedicated “delivery unit” to streamline green investment projects, similar to the model adopted by the Cities Commission for Climate Investment (3Ci). This initiative has identified 117 net-zero projects, 12 of which are deemed "investable,” showing that a focused approach can yield significant results.
This is the first article on Scotland’s green finance journey in a three-part series. Stay tuned for our next feature, which will focus on how Scotland is leveraging its global reputation to boost green finance investments.
