On 4 March 2020, the Strathclyde Pension Fund committee decided to postpone a decision on whether to divest from fossil fuel companies. The meeting of the pension fund committee had been picketed by campaigners calling for more sustainable investment policies, including from Unison, one of the largest trade unions representing the staff whose pensions were affected. Viewed from October 2020, divesting from fossil fuels now looks like a much more attractive option. The Strathclyde Fund lost 5% of its value in the 2019-20 reporting year with the fossil fuel companies being amongst the biggest losers.
2020 has seen massive changes in the value of enterprises across the world so it is not surprising that a Pension Fund with assets of over £20 billion should face challenges. Some of the largest winners and losers during the pandemic have been in the transport sector, with airlines being big losers, and parcel delivery firms emerging as winners. The disruption has widened the gap between the organisations with a strong future and those that were in decline.
Across the world pension funds are big transport investors. What are the Scottish transport investment opportunities with a strongest future? For too long transport investment has been viewed mainly from the perspective of financial and physical capital growth. However, the Scottish Government’s advisory group on the economic recovery has proposed that the recovery should be more sustainable, investing through four economic pillars: financial and physical capital, natural capital, human capital, and social capital. The greatest potential for future growth is shifting the investment balance towards natural, human and social capital. How can more social business models and greater environmental benefits be part of the regeneration of Scotland’s transport sector?
The networks of relationships that allow society to function better, also underpin the economy. The economic recovery advisory group suggests that Government must accept a more active role in building these relationships. This includes viewing some transport services as investment in social capital rather than revenue liabilities, and finding new ways to make labour markets more secure for more of society. Provided performance against citizen driven service goals is built into the business models of smart places across Scotland, investment in streetscape for towns, zero carbon bus services to key local destinations, and safer places and streets, could be amongst the most attractive investment prospects for Scotland’s economic recovery. However, new business models and ways of working are needed.
Scotland’s new transport strategy sets out goals to align transport investment with sustainable development goals. The new approaches emphasise Improved accessibility, equity, quality, emissions reduction, and collective action in local place making. Realising these goals needs real investment, not just grand words. The September 2020 draft Scottish Government infrastructure investment plan is a poor fit with these goals, being far too top down, and only weakly linked with policy. Nowhere in the draft plan is national government’s role cast as that of an enabler or trusted partner to unlock the capability of local organisations to prosper. The relationships between the promised £33bn of spending and the expected outcomes from the investment plan are simply not clear.
If we believe in Scotland, including unique opportunities to lead the world powering transport with renewable energy, then investment must convert policy goals into practical business models. The collective actions we have seen during the pandemic have been inspiring demonstrations of latent social capital. For many years, localism was in decline, but the pandemic has accelerated a shift that was already happening away from globalisation. The experiences of 2020 show that more sustainable investment options can be rapidly scaled into working business models for smarter transport and places. These new sustainable investment projects could be delivered just as quickly as the legacy projects highlighted in the draft national investment plan.
The recovery urgently needs more collaborative approaches, building trust in all those engaged in delivering the future of transport. In early October Ocado became the UK’s most valuable grocer, not because of the volumes of groceries sold, but because of its ability to build new types of relationship. Will Scots invest their pensions, and government invest public funds, in growing the value of Scotland’s transport through more social and sustainable investment approaches?
