Draft Environment Strategy

3. Outcome Pathways

3.1 Scotland’s biodiversity is restored and regenerated

There is undisputed evidence that the scale of biodiversity loss around the globe poses profound risks for humanity and the rest of life on Earth (Box B). We recognise that nature loss is an emergency which requires urgent and transformative action. Since climate change and nature loss are intrinsically linked, they must be addressed together.

This outcome describes our ambitions for tackling the nature emergency in Scotland. It reflects the Scottish Biodiversity Strategy’s goal of:

• halting biodiversity loss to be Nature Positive by 2030 (see Figure 5)
• restoring and regenerating biodiversity across Scotland’s land, freshwater and seas by 2045.

It is complemented by the outcome ‘Scotland’s global environmental impact is sustainable’, which addresses our contribution to tackling the nature emergency overseas.

We have a duty to help protect and restore nature for its own sake. As explained in Box C, doing so will also support many of our wider goals for Scotland. It will strengthen our economy by restoring the natural capital on which the long-term productivity of many sectors depends. It will improve the health and wellbeing of people across Scotland, given the close links between environmental and human health and the benefits of spending time in nature. It will also play a critical role in building the resilience of Scotland’s communities, businesses and food production to the inevitable impacts of climate change, including flooding and other extreme weather events.

3.1.1 The global context

The 2022 Global Biodiversity Framework sets out internationally-agreed targets for halting and reversing nature loss. It recognises that this will rely on transformative economic and societal change, since the direct drivers of biodiversity loss (land and sea use change, direct exploitation, climate change, pollution and invasive alien species) are underpinned by indirect social and economic drivers, including unsustainable patterns of production and consumption.^[15] The 2024 IPBES Transformative Change Assessment explores the underlying causes of biodiversity loss^[16] and strategies for addressing them. It emphasises the importance of shifting social norms and values to strengthen human-nature connectedness, as a deep lever for transformative change.

3.1.2 The nature emergency in Scotland

The global nature emergency is mirrored here in Scotland. The State of Nature report highlights that, despite examples of success, Scotland’s nature and wider environment continues to decline and degrade. Since 1994 alone, Scottish wildlife has decreased by on average 15% and one in nine Scottish species are currently threatened with extinction from Great Britain. Nature in Scotland has been under pressure and changing for many centuries: we now retain just over half of our historic land-based biodiversity. Although that is slightly more than other parts of the UK, we rank amongst those countries where habitats and species have been most depleted by human impacts through history, in the bottom 25% of nations for our ‘nature intactness’.

Scotland’s Strategic Framework for Biodiversity sets out our response to tackling the nature emergency in Scotland. It includes:

• The 2024 Biodiversity Strategy, which describes a strategic vision and outcomes for restoring and regenerating Scotland’s biodiversity.
• A series of rolling Delivery Plans, to be reviewed every six years, with cross- sectoral actions for delivering these outcomes.
• Statutory nature restoration targets, to be set out in the Natural Environment Bill, which will drive action and increase accountability for achieving the vision and outcomes.

The Biodiversity Strategy also sets out conditions for success to ensure we drive the transformative changes needed deliver this vision, responding to the factors which have limited the success of previous strategies:

• Work more strategically and at scale
• Systematically mainstream biodiversity across sectors and the wider policy landscape (e.g. agriculture, energy, housing, industry, education, health and transport)
• Focus on ecosystem health and land and seascape-scale regeneration rather than on management for individual species
• Ensure sufficient investment and appropriately blend public and private funding
• Strengthen accountability for delivery, including evidence based monitoring frameworks and statutory targets to hold us to account.

Building on this, the first Delivery Plan, published in 2024, identifies over 130 actions grouped by six high-level objectives:

• Accelerate restoration and regeneration
• Protect nature on land and at sea, across and beyond protected areas
• Embed Nature Positive farming, fishing and forestry
• Protect and support the recovery of vulnerable and important species and habitats
• Invest in nature
• Take action on the indirect drivers of biodiversity loss.

The ‘society’ and ‘economy’ pathways in this Strategy contribute to this final objective by further exploring the transformative changes needed to tackle the nature emergency, in ways that support wider benefits for Scotland’s prosperity, health and wellbeing. The scope of the Biodiversity Framework also encompasses marine biodiversity. A range of policies and regulations focus on specific aspects of the marine environment. These include the UK-wide Marine Strategy, which provides a framework of requirements to assess, monitor and take measures to protect and improve the state of our seas to achieve or maintain good environmental status.

Box C: What is biodiversity and why is it important?

Biodiversity is the web of life. It is the variety of all living things and the ecosystems where they live (on land or in water). Biodiversity inspires people. It has enormous value in its own right but is also central to our survival as a species. Our economy, jobs, health and wellbeing depend on it and it is an integral part of our culture and way of life. More than half of the world’s GDP (US$44 trillion) is thought to be moderately or highly dependent on nature and at risk from its decline. Yet humanity has caused the loss of 83% of all wild mammals and half of all plants.

Biodiversity supports food production and security: through insect pollination in farming and horticulture; and our fishing industry, which depends on resilient and productive seas. It provides the blueprint for many modern medicines and contributes to our wellbeing, providing recreation, relaxation and a sense of place. Healthy biodiversity protects soil from eroding, purifies water and helps prevent and mitigate flooding.

Biodiversity plays a vital role in addressing and mitigating the impact of climate change. Globally, when they are functioning well, ocean and land ecosystems remove around 50% of human-made carbon dioxide emissions each year. The more the world warms however, the more stress will be placed on ecosystems, triggering feedback loops that will accelerate warming and extreme weather events. Protecting and regenerating biodiversity is the best chance we have to mitigate and adapt to climate change.

3.2 We have ended Scotland’s contribution to climate change

This outcome describes our ambition for ensuring Scotland plays its full role in the global effort to tackle the climate emergency. This means delivering our unwavering commitment to achieve a just transition to net zero emissions by 2045. It also means reducing Scotland’s carbon footprint, including emissions that are embedded in the goods and services we import. Our action to tackle climate change will create enormous new opportunities for Scotland’s economy and communities. It will support new green industries, businesses and jobs and create new opportunities for inward investment and for exporting expertise and energy.^[17] By pursuing a just transition, it will help to tackle poverty and inequalities. It will also create many health and wellbeing benefits, from cleaner air, warm homes and safer streets to supporting active lifestyles and healthy, sustainable diets.

3.2.1 Achieving Scotland’s 2045 net zero target

Our 2045 net zero target is one of the most ambitious in the world and means reaching net zero five years ahead of the UK. We are now halfway to net zero, having reduced our emissions by 50.1% since 1990.^[18]

This has been supported by our rapid expansion in renewable energy. In 2023, 91.2% of electricity generated in Scotland was from low-carbon sources including renewables, nuclear and pumped hydro. Our emissions from electricity supply have reduced by 88% since 1990. We have made other substantial emissions reductions in industry and waste, where emissions have fallen by 55% and 75%, respectively – in fact, emissions have fallen in all sectors, except international aviation and shipping. We also planted nearly 75% of all new forests in the UK in 2023. We are ahead of the UK as a whole in delivering long-term emissions reductions and have decarbonised faster than the average of the EU27.

In April 2024, we announced a stepping up in climate action with a range of new policies focussed on key sectors, which we will deliver with partners.^[19] As well as pushing forward with actions to support a reduction in car use in Scotland, we will introduce an integrated public transport ticketing system, and deliver a significant increase in electric vehicle charging points. We will consider options for a Carbon Land Tax to support reduction of greenhouse gas emissions from land, consulting with land owners and investors to understand the potential impacts. We will also pilot ways to reduce emissions from livestock through improving health, reducing disease, and novel breeding and nutritional approaches.

To drive progress towards our statutory 2045 net zero target, we have set in legislation a new target approach based on five-yearly carbon budgets, accompanied by annual reporting. Following advice from the Climate Change Committee (CCC), this will ensure our legislative framework reflects the reality of long-term climate policymaking and charts a course to 2045 at a pace and scale that is feasible, fair and just. Carbon budgets will be set through secondary legislation, and policies and proposals for meeting these budgets will be set out in statutory Climate Change Plans.

The most recent Climate Change Plan update was published in 2020, and outlined over 200 policies across eight sectors: electricity, buildings, transport, industry, waste and the circular economy, land use, land use change and forestry, agriculture and negative emissions technologies. We will shortly consult on a draft version of the next Climate Change Plan, covering the period of 2026 – 2040, with the aim of finalising the Plan before the end of the current Parliamentary session. We will continue to report annually on progress in reducing emissions, and on the delivery of wider outcomes like peatland restoration, through the Climate Change Plan Monitoring Framework.

Our Climate Change Plan is part of a wider framework for climate action. The 2024 Green Industrial Strategy (p40) and consultations on Just Transition Planning (p58) will help us to ensure Scotland maximises the economic opportunities from the just transition to net zero. This is complemented by a wide range of cross-government strategies and plans to drive progress in specific sectors, from heat in buildings to sustainable transport - key examples are described in the pathways for the ‘economy’ and ‘society’ outcomes. We are also supporting community-led and place-based climate action (p58) through the network of Community Action Climate Hubs and Carbon Neutral Islands, supported by our Public Engagement Strategy. Our third National Adaptation Plan sets out essential actions for building Scotland’s climate resilience, recognising that we are already experiencing the impacts of climate change and these are set to increase (p55). Lastly, we are working internationally to drive progress on climate justice through our commitment to Loss and Damage funding (p59). This framework of action is supported by substantial public investment, including spending commitments of £4.9 billion in the 2025-26 Budget for actions that help to tackle the climate emergency.

Despite our substantial progress in cutting emissions, we know that the most difficult part of our net zero journey lies ahead, and will rely on significant behavioural change. It is therefore critical to the design of climate change policies that we take full account of the need to facilitate these behaviour changes, and understand barriers for individuals and businesses. We recognise government’s vital role in supporting the wider changes needed to ensure sustainable choices are practical and affordable.

It is clear that as we move further along the journey to net zero, progress will depend on changes by all of us, in the choices we make in our households and our lives. Action will continue to be driven by government, but it cannot happen without all of us – individuals, communities and businesses – taking steps as part of a national effort to tackle the climate emergency.

Crucially, the climate and nature crises must be addressed together. This means strengthening the fundamental role that healthy ecosystems, on land and in our seas, play in our efforts to mitigate and adapt to climate change. We are taking significant action to support nature-based solutions to climate change which also provide reliance to communities. For example, Scotland planted nearly 75% of all new forests in the UK in 2023. We have also pledged £250 million to restore damaged peatlands, which currently contribute around 12% of Scotland's emissions, and have supported the restoration of 75,000 hectares to date. We have introduced measures in the Natural Environment Bill to improve the management of wild deer, as achieving sustainable deer populations is fundamental to Scotland’s ability to meet its climate and biodiversity goals. In the marine environment, we are working to increase our understanding of the contribution of Scotland’s blue carbon habitats, including saltmarsh and seagrass, as nature-based solutions and will publish a Blue Carbon Action Plan in 2025.

It is also essential to understand and carefully manage potential tensions that can arise between our goals for climate and nature, for example due to pressures on land use or on the marine environment from renewable energy developments (discussed further on page 41). We are committed to taking a joined up approach to reaching net zero while also achieving our Biodiversity Strategy’s vision of restoring and regenerating Scotland’s biodiversity. This is the best approach to securing Scotland’s long-term prosperity, wellbeing and resilience.

Three other pillars in our approach to climate change – building Scotland’s resilience to climate change, ensuring that our journey to net zero is achieved through a just transition, and supporting international climate justice – are addressed in greater detail in the pathways for the outcomes ‘We build Scotland’s resilience to climate change and other global environmental risks’ (p55) and ‘These transformations are achieved through a just transition and support climate and environmental justice’ (p58).

3.2.2 Reducing Scotland’s carbon footprint

Alongside driving progress towards our net zero target by reducing emissions produced in Scotland, we must also take responsibility for our global carbon footprint. This includes the emissions generated overseas to produce the goods and services we import. Scotland’s carbon footprint is a National Indicator in our National Performance Framework, with progress reported annually.^[20]

Around four-fifths of our carbon footprint comes from the products we purchase or manufacture, use and throw away. Our transition to a circular economy will therefore play a fundamental role in reducing this footprint by ensuring that resources stay in high value use for as long as possible. This is addressed further in the sections on circular economy business practices (p45) and sustainable consumer choices (p38). The Circular Economy and Waste Route Map sets out actions to 2030 for driving Scotland’s transition to a circular economy, supported by the Circular Economy (Scotland) Act 2024 and forthcoming Circular Economy Strategy. The potential for cost saving in our public services and business opportunity in this area is significant.

To address our carbon footprint, we also need to improve our understanding and management of the emissions generated throughout the entire lifecycle of a product or construction activity. This is explored in the sections on industrial decarbonisation (p40), supply chains (p46) and infrastructure (p52). Our forthcoming Product Stewardship Plan will set a framework for identifying priority products where producers will be expected to take responsibility for addressing environmental impacts, including products’ carbon footprints. This will recognise the need for fairness in addressing impacts along supply chains and that roles and actions will vary from one product to another.

3.3 We minimise pollution and waste in our environment

The UN recognises a pollution crisis in its own right, in light of the impacts of pollution and waste on the environment and our health. Pollution, climate change, and biodiversity loss are closely linked: pollution is a direct driver of biodiversity loss, placing pressure on ecosystems through contamination of air, freshwater, oceans and soils; at the same time, some air pollutants are greenhouse gases and waste has a large carbon footprint.

Globally, pollution is the largest environmental threat to human health, causing around nine million deaths every year - one in six deaths worldwide - and disproportionately affecting countries in the Global South. Since many forms of pollution are transboundary, or embedded in supply chains, the pollution crisis requires a global response. We are committed to supporting international efforts to tackle pollution and protecting Scotland’s people and environment from its impacts. Improving environmental quality and controlling harmful pollution and waste is one of the most established areas of environmental policy. There are important milestones for Scotland such as the Radioactive Substances Act of 1948, the Clean Air Act of 1956, and the major EU framework directives for water, waste and air that shaped our domestic regulations. Key examples of our approach are described below:

3.3.1 Air pollution

Significant progress has been made in improving air quality in Scotland, with emissions of the main air pollutants declining over the last three decades. Scotland enjoys good air quality compared with much of Europe, but we are not complacent and are targeting actions to continue to drive improvements. Road transport in urban areas is the main contributor to poor air quality and the adverse human health aspects that are linked to that. As noted on page 59, air pollution especially impacts on the more vulnerable members of society, and children, contributing to health inequalities, and has a negative impact on our NHS finances. It is also a significant pressure on Scotland’s biodiversity due to the impacts of nitrogen deposition on key upland habitats. Since the rate of decline in most air pollutants is now reducing, this suggests that the easier actions may now have been taken and that we now need to address more complex challenges, including behaviour change.^[21]

Our air quality strategy - Cleaner Air for Scotland 2 – sets out how we will continue to improve air quality. Actions include, among others, the establishment of Low Emission Zones in our four largest cities, strengthening good agricultural practice guidance and developing a public engagement framework. Building on this strategy, we will set a long term framework for air quality in Scotland, taking account of updated World Health Organisation guidelines.

3.3.2 Water pollution

The quality of Scotland’s water environment (including its rivers, lochs, groundwater, wetlands and seas) has improved in recent decades, which has supported the recovery of some freshwater species.^[22] Around 68% of Scotland’s water environment is assessed by SEPA to be in ‘good’, or better, overall condition and 87% of our water environment has ‘high’ or ‘good’ water quality, up from 82% in 2014. However, pressures on our water environment remain, including diffuse pollution from agriculture, discharges of wastewater, abstractions and historic physical alterations to rivers. Pressures are likely to increase as a result of climate change, for example, due to increased intensity of rainfall exacerbating run-off of pollutants from both urban and rural areas, and also the increased likelihood of water scarcity. Scotland’s third River Basin Management Plan sets out a range of actions to protect and improve Scotland’s water environment, with the aim of ensuring that 81% of water bodies are classified as in ‘good’ or better overall condition by 2027. To support the development of a fourth River Basin Management Plan, SEPA will publish for consultation a report setting out the significant issues that affect the quality of Scotland’s water environment by the end of 2025.

3.3.3 Plastic pollution

Rapidly rising levels of plastic pollution are damaging ecosystems around the world and creating risks for human health. Globally, plastic production has increased from 2 million tonnes in 1950 to over 460 million tonnes today, doubling since 2000.^[23] Plastic waste has also more than doubled since 2000, reaching over 350 million tonnes, and only 9% is recycled. Leakage of plastic waste into the environment is fundamentally altering terrestrial and marine ecosystems, even in remote locations such as the Arctic and Antarctic. Significant stocks of plastics have already accumulated in aquatic environments, with 109 million tonnes in rivers, and a further 30 million tonnes in the ocean. Microplastics (plastic particles smaller than 5mm) account for 12% of plastic leakage, coming from a range of sources such as tyre abrasion, brake wear or textile washing. There is also increasing concern over the implications for human health, given evidence of the presence of plastics in the food chain, water supply and the air we breathe.

A system change is needed to address the full lifecycle of plastics – including constraining overall consumption of plastics, encouraging design for circularity and closing leakage pathways. We are committed to supporting Scotland’s contribution to tackling this global challenge. We have already taken action in a range of areas, including banning the manufacture and supply of certain single-use plastic items and introducing a charge for single-use carrier bags. From 2025, we are introducing extended producer responsibility for packaging (alongside other UK governments) and banning the sale and supply of single-use vapes. We are committed to introducing a deposit return scheme by October 2027. Our new Circular Economy and Waste Route Map includes additional actions up to 2030 to encourage more sustainable consumption and production of plastics. For example, these include commitments to develop measures to tackle consumption of additional problematic single-use items,^[24] to require kerbside collection of plastic film and flexible packaging, and to work with the UK government to ban exports of plastic waste (see page 26). Further actions to tackle plastic pollution are set out in the National Litter and Flytipping Strategy.

Our Marine Litter Strategy identifies priority actions for preventing litter from entering the marine and coastal environment, and supporting its removal. We are also continuing to work internationally towards solutions that can be applied across the plastics supply chain to help tackle microplastic pollution. For example, in 2021, we supported the development of the world’s first standard to tackle plastic pellet pollution.^[25] International efforts to address shared marine litter problems are coordinated through the regional seas convention, OSPAR,^[26] and we have used the Marine Fund Scotland to deliver a Fishing for Litter programme, through KIMO,^[27] to remove litter at sea by fishers, aligning with the countries bordering the North East Atlantic.

3.3.4 Chemical pollution

The chemicals industry is integral to almost everything we buy and use in some way. It’s also a key enabling sector in our transition to net zero. However, chemical pollution is increasingly recognised as a threat to nature that transcends borders, including impacts on biodiversity and the water environment. The UN’s Global Framework on Chemicals^[28] highlights that exposure to hazardous chemicals and waste throughout their supply chains and life cycles also threatens human health, disproportionately impacting vulnerable and at-risk groups.

It is therefore essential to carefully manage the way we make, use and dispose of chemicals, taking a whole lifecycle approach. We will continue to work with the Welsh and UK Governments to identify and control priority chemical issues at source through our existing shared legislative framework. As we do this, we will aim to ensure that decisions on chemicals regulation align as closely as possible with those of the EU.

3.4 Scotland’s global environmental impact is sustainable

The environmental impacts of our consumption and production extend far outside our borders, affecting the natural environment in every continent. Scotland’s ecological footprint - the area of land and sea around the world needed to produce the goods and services we consume – exceeds the area in Scotland capable of supplying these demands by around one quarter.^[29] We meet this ‘deficit’ by importing goods and services from overseas or using global commons, such as the atmosphere or international waters. Since humanity is already operating in overshoot (Figure 6), Scotland’s excess consumption inevitably leads to ecological pressure elsewhere on the planet.

Legend: Ecological Footprint is the area of land and sea needed each year to sustain our production and consumption and absorb our waste. Biocapacity is the bioproductive area that can be renewed each year. This graph, produced by Global Footprint Network, indicates that humanity entered a period of increasing ‘overshoot’ in the early 1970s.

Other measures of our footprint reveal a similar picture. For example, Scotland’s material footprint is over twice the sustainable level,^[30] and our large overseas water footprint exacerbates water stress in other countries. As described above, our carbon footprint, including emissions embedded in imported goods, is unsustainably high and is around 20% larger than our territorial emissions.^[31] These issues are deeply interconnected: around four-fifths of Scotland’s carbon footprint comes from the products and services we manufacture, use and throw away; and 90% of global biodiversity loss and water stress is caused by extraction and processing of these products.^[32]

Specific goods and commodities we import into Scotland can result in damaging overseas impacts, for example through land conversion to grow food, cotton and timber, as well as impacts of mining. An indicator has been developed to track overseas environmental pressures resulting from the UK’s consumption.

To support Scotland’s role as a good global citizen, we will strive to ensure that our overseas environmental impact is sustainable. This means making sure our demands on the planet’s natural systems do not exceed what it can regenerate. There are many opportunities to improve our overseas impact while also benefiting people’s health and wellbeing, saving money, strengthening our economy and creating jobs. We will seek to build on progress in the following areas, while continuing to learn from evidence and international best practices:

3.4.1 Driving Scotland’s transition to a circular economy

Shifting from our linear ‘take, make, waste’ economy to a circular economy is key to improving our global environmental impact. It also provides substantial economic growth and public sector savings opportunities. It will reduce the total quantity of resources we consume by keeping them in high value use and minimising waste. Our approach to creating a circular economy is set out in the Circular Economy and Waste Route Map, to be followed by our forthcoming Circular Economy Strategy. As described in the ‘economy’ and ‘society’ pathways, businesses (p45) and consumer choices (p38) have a key role to play, as well as action to cut food waste (p34). These will create significant new economic opportunities and help people and businesses to save money.

3.4.2 Addressing sectors with a high ecological footprint

Nearly half of Scotland’s ecological footprint is sourced from overseas. Our consumption of food makes the largest contribution to this overseas footprint. Although most food consumed in Scotland that is sourced from overseas is produced within Europe, the largest non-European sources include countries at high risk of biodiversity loss and deforestation in South America and Africa. Scotland is particularly reliant on imported fruit and vegetables.

Opportunities for improving the sustainability of our food consumption are described on page 33, including shifting towards healthy, sustainable diets and avoiding food waste. The Local Food Strategy, Local Food for Everyone: Our Journey, was published in 2024. The strategy supports locally based production and circular supply chains, cutting food miles and enabling more people to enjoy food grown locally. There are range of activities already underway which support the local food agenda including exploring innovative technologies such as vertical farms. Although localising food can, in principle, help reduce Scotland’s overseas food footprint, we recognise this is a complex area and will explore opportunities for strengthening our evidence base.

Clothing and textiles is the second biggest contributor to Scotland’s overseas ecological footprint, with around 90% of its footprint originating overseas. Clothing production is estimated to have doubled, globally, in the last 15 years, with less than 1% being recycled. The global clothing and textile value chain is associated with significant GHG emissions and environmental impacts, including damage to ecosystems from land conversion, water stress and pollution.

Reducing the size of Scotland’s clothing and textiles footprint through reduced demand is therefore a key priority for improving the sustainability of our overseas impact. This will require consumer behaviour change, including shifting away from fast fashion towards buying items that last, buying second hand and repairing items. As discussed on page 38, this can help people to save money and create jobs in the local economy. We also need to encourage responsible textile production, recycling and end-of-life management. Next steps for promoting this are set out in the Circular Economy and Waste Route Map, which identifies textiles as a potential priority product for our forthcoming Product Stewardship Plan, and sets out plans for consulting on kerbside collection of textiles from households.

3.4.3 Ensuring our net zero energy transition has a sustainable overseas footprint

It is important to address the risk of overseas impacts from our transition to net zero energy and sustainable transport. Renewable energy infrastructure and EV car batteries rely on imported ‘transition minerals’ like lithium and neodymium. Mining for these minerals can cause significant environmental damage and human rights risks. Bioenergy production can also result in deforestation and other overseas impacts if it relies on imported feedstocks, as well as increased emissions. We recognise the need to take account of these impacts and risks when designing energy and transport policies. As discussed on page 42, these pressures can be reduced through measures to reduce energy demand, such as improving home heating and shifting to active travel and public transport. In turn, these can help to improve people’s health and wellbeing and tackle fuel and transport poverty.

3.4.4 Using trade as a lever to improve our international environmental impact

Scotland’s Vision for Trade highlights the need to strive to ensure our approach to trade supports a shift towards more sustainable consumption and production. Environmental due diligence measures can be a key mechanism to improve the sustainability of international trade by requiring businesses and investors to take responsibility for addressing climate and environmental impacts along supply chains. In turn, this can help to make supply chains more resilient by better managing environmental risks.^[33] As described on page 46, we will continue to engage with the UK Government on opportunities for strengthening environmental due diligence measures in a way that is proportionate and effective. Any proposals for due diligence measures will be carefully assessed with early involvement of relevant business sectors, taking account of impacts on the competitiveness of Scottish businesses in export markets. We will also continue to advocate for environmental impacts and opportunities to be fully considered during the negotiation of trade deals, and within World Trade Organization (WTO) multilateral discussions. This will include facilitating the export of environmental goods and services, to encourage the global transition to net zero.

We are committed to tackling the overseas impacts of Scotland’s waste exports. Around 15% of our waste is processed outside Scotland. As set out in the Circular Economy and Waste Route Map, we are engaging with the UK Government to deliver a ban on plastic waste exports to non-OECD countries, and urging it to consider expanding this to all countries. We are also working in partnership with devolved governments to review opportunities for restricting exports of other waste materials as well as exploring opportunities to handle waste domestically, which would see growth in the sector.

We will also continue to promote Fair Trade as a means of supporting producers, workers and enterprises, in particular in the Global South, to build a fairer, more sustainable trading system. In 2025, Scotland successfully renewed its Fair Trade Nation status, demonstrating its ongoing commitment to fairness, social justice and ethical trade. To help deliver this, we will continue our support to Scottish Fair Trade and their work to support grassroots action across Scotland.

3.4.5 Collaborating internationally to support a sustainable future

We are committed to supporting climate and nature action through international collaboration. This is at the heart of our International Strategy, which establishes climate change, biodiversity and renewable energy as key focus areas for international engagement. Scotland is already showing leadership as a committed international partner in these areas, for example through our role as Co-Chair of the Under 2 Coalition and the Edinburgh Declaration on subnational governments’ role in tackling biodiversity loss.

Sustainability is a core principle underpinning our approach to international development. In 2022 we established a Global Renewables Centre to facilitate mutual knowledge exchange on clean energy between our African partner countries and the Scottish renewables sector. As discussed on page 59, we are also committed to supporting international climate justice. Going forward, we will explore further opportunities to strengthen Scotland’s role as a good global citizen in our approach to working internationally. As part of this, we will deliver on our commitment to Policy Coherence for Sustainable Development, helping to ensure that different parts of government work together to support sustainable development outcomes, both in Scotland and in our approach to international development. This includes our commitment to an international ‘do no harm’ approach and to the Beyond Aid agenda, delivering international development goals through interlinked policy action. By demonstrating leadership on policy coherence, Scotland can help to set an example as a good global citizen.

Box D: When developing the pathways that follow for the ‘society’ and ‘economy’ outcomes, we have reflected on commissioned research by Stockholm Environment Institute (SEI). To help understand the transformations in Scotland’s society and economy needed to tackle the climate and nature emergencies, SEI focused on opportunities for encouraging three broad shifts (Figure 7):

Strengthening our connection with nature: The steep declines in nature over the past half century have been encouraged by a perspective that nature is an instrument to be used for resources. Repairing our relationship with nature will mean shifting social norms and values towards recognising that we are part of nature, not separate from it. Helping people connect with nature in their everyday lives e.g. by creating nature-rich towns and cities and supporting nature-based health and education, can strengthen our relationship with nature. Evidence shows this also benefits our wellbeing and encourages a shift towards sustainable lifestyles and behaviours.

Ensuring Scotland thrives within the planet’s sustainable limits: If everyone in the world lived as we do in Scotland, we would need three planets. Adapting to thrive within the Earth’s sustainable limits will mean empowering people to live sustainably and driving the just transition to a net zero, nature positive, circular economy. In turn, this offers enormous potential for improving people’s health and wellbeing, tackling poverty and inequalities, and supporting new green jobs and industries.

Investing in a better future: Achieving these shifts will require investment - directing flows of public and private finance towards green economic activities, like renewable energy and nature restoration, while also supporting infrastructure, innovation and skills needs. This, in turn, will support new economic opportunities and ensure Scotland has a skilled workforce for the high-value green jobs of the future.

3.5 Scotland’s society is transformed for the better by living sustainably, in harmony with nature

Playing Scotland’s role in tackling climate change, nature loss and pollution will require positive transformations across our society. We will support these changes through a just transition, in ways that increase fairness, promote economic growth opportunities, reduce poverty and improve people’s lives.

Alongside the impressive progress we have made through technologies like renewable energy, we know that our transition to a sustainable and fairer future will also rely on significant behavioural changes. This means supporting and enabling people and communities in Scotland to live sustainably – in ways that create wider benefits for our health and wellbeing, as well as reducing the cost of living. We need to change our patterns of consumption, our travel and how we heat our homes in order to have a lighter environmental impact. This is a complex challenge, and government has a vital role in supporting the changes needed to make living sustainably the easy and affordable choice for everyone. These changes offer enormous potential to improve people’s lives. For example, enabling and promoting active travel and public transport as alternatives to car use can benefit our health through cleaner air and exercise, while also supporting safer streets and tackling transport poverty. Adjusting our dietary choices and avoiding food waste can create joint benefits for health and sustainability and save money. Measures for energy efficiency and clean heat can create warmer homes and reduce bills. These approaches must take the diverse nature of Scotland’s communities into account, particularly rurality.

Crucially, we need to ensure that these changes are designed to support social justice – helping to tackle existing inequalities and avoid creating new ones. This includes ensuring that people with lower incomes and those in rural areas do not experience an additional cost burden. It is also important to ensure that local communities benefit from the transition and have a say in decisions that affect them. This is explored further in the pathway for the outcome ‘ These transformations are achieved through a just transition and support climate and environmental justice’ (page 58).

As explained in Box D, evidence shows that strengthening human-nature connectedness can be a deep lever for change, encouraging people to shift towards sustainable choices and behaviours. This is at the heart of the Global Biodiversity Framework’s 2050 vision of ‘living in harmony with nature’. Connectedness with nature can be encouraged by creating nature-rich urban spaces, supporting nature-based education and health, enhancing animal welfare and harnessing the role of the arts and rights-based approaches. Again, these changes can benefit the health and wellbeing of people and communities across Scotland.

To deliver this outcome, we will explore opportunities to build on progress in the following areas:

3.5.1 Creating nature-rich towns and cities

Bringing more nature into the urban areas where many people live offers significant potential to improve people’s health and wellbeing and create attractive, climate-resilient places for communities. This can be supported by scaling up the use of blue-green infrastructure and other nature-based solutions. Blue-green infrastructure is the network of blue and green features or spaces in built and natural environments that provide a range of ecosystem services. It includes natural features like trees, green spaces and watercourses, as well as designed features like green roofs and walls. Incorporating blue-green infrastructure in the built environment can address multiple challenges simultaneously (see Box E), thus providing more cost-effective and long-lasting benefits to places and communities. It can also bring opportunities, and improve accessibility, for connecting with nature into people’s everyday environments. We know that there are important inequalities in people’s ability to access the benefits from green and blue spaces near where they live. For example, 30% of adults in Scotland live more than a 5 minute walk from their nearest green or blue space, rising to 38% for adults living in the most deprived areas and 41% for those from ethnic minorities.

We want to scale up the use of blue-green infrastructure in our towns and cities, to realise the multiple economic, social and environmental benefits this creates. Our approach to delivering this is set out in the Biodiversity Delivery Plan and Scottish National Adaptation Plan. This includes commitments designed to facilitate increased public and private investment in blue-green infrastructure; improve its biodiversity value; promote its use in transport and active travel projects; and harness its role in improving the climate resilience of our sewer network and urban water environment, to avoid flooding and pollution incidents. Its importance is further highlighted in the National Planning Framework, which sets out that Local Development Plans should enhance and expand blue-green infrastructure. Going forward, we will continue to seek opportunities for scaling up use of blue-green infrastructure, through place-based approaches that maximise benefits to local communities and help to tackle inequalities. As set out on page 49, we will work with regional economic partners to explore opportunities to improve coordination with regional environment and climate initiatives to strengthen delivery of shared goals, for example through promoting use of blue-green infrastructure.

Box E: Multiple benefits created by blue-green infrastructure include:

• Reducing flood and water scarcity risk: Green and blue features in urban spaces can play an important role in slowing and absorbing excess water, as well as conserving and holding water when there is less rainfall.
• Comfortable urban temperatures: Green spaces help to cool urban environments, increasing resilience to heatwaves.
• Tackling air pollution: Urban trees and other vegetation improve air quality by absorbing pollutants.
• Improving people’s health and wellbeing: Using green and blue spaces for exercise, active travel and connecting with nature improves people’s mental and physical health and wellbeing.
• Outdoor play and education: Green and blue spaces provide nature-rich environments for learning and play, improving children’s health, wellbeing and educational attainment.
• Safer, more attractive places for communities: Green and blue spaces help to transform towns and cities into more enjoyable, attractive places to live. They can also help to create safer communities and improve house prices.
• Restoring biodiversity: Blue-green infrastructure supports more diverse and connected habitats, helping plants and animals to thrive in urban settings.
• Storing carbon: Vegetation in greenspaces can make an important contribution to net zero goals by sequestering carbon.

3.5.2 Ensuring everyone’s health and wellbeing benefits from access to a healthy environment

There is strong evidence for the close connections between environmental and human health. For example, climate change and pollution pose significant health risks which disproportionately affect vulnerable and at-risk groups (see page 59). Climate change harms mental and physical health in a range of ways, including through impacts of extreme weather and climate anxiety. For example, heat, cold, flooding and drought are cited as having a significant impact of health in Public Health Scotland’s Adverse Weather and Health Plan 2024-27. Around 2700 deaths per year in Scotland are attributable to air pollution, and there is increasing concern over impacts of novel forms of pollution such as micro-plastics and forever chemicals.

At the same time, spending time in the outdoors, for physical activity and contact with nature, can play an important role in tackling key population health and wellbeing issues.^[34] Shifting towards sustainable lifestyles can also benefit people’s health, for example through active travel and healthy, sustainable diets.

We want to ensure everyone can experience the health and wellbeing benefits from access to a healthy environment, as part of our preventative approach to health and aligning with our Population Health Framework. Our work to promote blue-green infrastructure and nature-based education will help to ensure everyone can access the health benefits from time spent outdoors in nature. We will explore opportunities for further strengthening connections between nature and health services, building on the experience of the Green Health Partnership pilots, established as part of the ‘Our Natural Health Service’ initiative (Figure 8). We will also continue to address the significant health risks posed by climate change and pollution, and harness the health benefits of climate action. We will design our approach to help tackle the profound inequalities in how people experience these positive and negative health impacts, linked to factors such as wealth, ethnicity, age and gender.

3.5.3 Strengthening nature-based education to inspire care for nature and improve outcomes for children

Outdoor learning is recognised as a priority in the Learning for Sustainability action plan, given strong evidence of the benefits this can create for children’s health, wellbeing and educational attainment across a range of subject areas. Evidence suggests this is most effective when it involves experiencing nature through the senses and emotions, through regular hands-on activities in the school grounds or local greenspaces as well as visits to special places for nature such as National Parks and Nature Reserves. This ‘authentic’ approach can help children benefit from feeling connected with nature in their everyday lives and can also inspire them to go on and develop the nature based-skills and careers we need in Scotland.

We know there continues to be inequalities in children’s ability to experience the benefits of outdoor education.^[35] That is why we are continuing to explore opportunities for strengthening outdoor learning in and about nature, to ensure all children can experience these benefits. As part of this, we are improving access for teachers to relevant curriculum resources on outdoor learning and case studies, including via the new Learning for Sustainability webpage created by Education Scotland. For example, this will provide access to the Nature Discovery Map Scotland, which we have supported NatureScot to develop and continue to roll out nationally. This exciting new tool will help pupils to connect with nature and be part of improving their local environment by exploring how positive changes for biodiversity can be made in and around their schools. As set out in the Biodiversity Delivery Plan, NatureScot and Education Scotland are continuing to explore further opportunities to promote and develop resources for teachers on outdoor learning and nature.

More broadly, we will continue to consider how and in what ways outdoor learning can be supported across the curriculum. Our Scottish Outdoor Learning Strategic Working Group is developing recommendations on the opportunities for strengthening inclusive provision and access to outdoor learning, in all its forms. We will consider the group’s advice in full when it reports later in 2025.

3.5.4 Enhancing animal welfare, as part of our strengthened relationship with nature

There is growing recognition of the interlinkages between animal welfare, sustainability and human health and wellbeing, and the need for holistic approaches to address these connections.^[36] We are carefully considering a recommendation from the Scottish Animal Welfare Commission to introduce animal welfare impact assessments to help mainstream consideration of animal welfare risks during policy development.^[37] We are also working with the UK Government and other devolved administrations to consider proposals for mandatory method of production food labelling, in order to provide consumers with clearer information on the production system in which animals were reared, building on existing Quality Assurance schemes.^[38] In addition, we are considering opportunities for enhancing animal welfare through the design of the new agriculture support regime.

3.5.5 Harnessing the transformational power of the arts

The arts can play a powerful role in mobilising the shifts in social norms and values needed to tackle nature loss and climate change. They can engage people in deeper ways, triggering change and empowering us to think more creatively about sustainable futures. Our Culture Strategy Action Plan includes a commitment to ‘harness the transformational power of culture to deliver on climate change’. Creative Scotland plays a key role in delivering this through its Climate Emergency and Sustainability Plan. We will explore opportunities to embed, as part of this, a focus on the role of the arts in inspiring action to tackle nature loss, and celebrate human-nature connectedness, recognising that the climate and nature emergencies are intrinsically linked.

3.5.6 Exploring opportunities for rights-based approaches to reflect the connections between people and nature

There is increasing international interest in the potential for rights based approaches to reflect the connections between people and nature, such as the right to a healthy environment and rights of nature.^[39] The right to a healthy environment has been included in the development of a Scottish Human Rights Bill. Although that Bill will not be progressed during this Parliamentary Term, we are continuing work to produce an effective legislative framework to protect and advance human rights for people in Scotland. As part of this, we will deliver the commitment in Scotland’s second National Human Rights Action Plan to carry out a human rights review of data on air, land and water pollution impacts and severe weather events.^[40] We will use the findings in decision-making to help address the disproportionate impact of environmental harms on marginalised places and people whose rights are most at risk, in order to better realise the right to a healthy environment. We will also support delivery of rights to environmental information, consultation on environmental decisions and access to justice on environmental matters under the Aarhus Convention.^[41]

3.5.7 Empowering Scotland’s people to live well, sustainably

As well as strengthening people’s connection with nature, this outcome is also about improving the sustainability of some aspects of our lifestyles. We recognise that government has an essential role in supporting the system changes needed to ensure it as easy as possible for people to live sustainably, in ways that support fairness, reduce costs and improve our health and wellbeing. There are important opportunities in the following areas:

Food

Shifting towards sustainable, healthy diets and cutting food waste are key opportunities for reducing emissions and pressure on nature, and helping households reduce their expenses.^[42] This can go hand in hand with improving our health and easing pressure on our NHS. For example, the Scottish Dietary Goals have been in place since 2013 and describe the diet that will improve the health of people in Scotland. Our national diet is currently far from achieving these Goals, leading to a greater incidence of diet-related ill health in Scotland. These existing Dietary Goals include a recommendation to avoid eating more than an average of 70g of red and red processed meat a day to reduce diet-related health risks. Reducing intakes of red and red processed meat can reduce the risk of health issues such as colo-rectal cancer and Type 2 Diabetes, however around one third of Scotland’s population consumes more than this existing dietary recommendation.

The Climate Change Committee has recommended a 20% shift away from all meat and dairy in Scotland by 2035. Current advice from Food Standards Scotland (FSS) is that, rather than encouraging an ‘across the board’ reduction in meat consumption, efforts should focus on encouraging people who exceed the existing health recommendations to limit their consumption of red and red processed meat to no more than an average of 70g per day, in line with the existing Dietary Goal. Our focus must be on nutrition. Many population sub-groups in Scotland are already at risk of low micronutrient intakes and these may be worsened by a reduction in meat and/or dairy intakes, if these are not replaced with suitable alternatives (such as vegetables, oily and white fish, eggs, pulses and legumes). Further opportunities for promoting sustainable, healthy diets will be considered through FSS’s ongoing review of the Scottish Dietary Goals.

More broadly, our Vision for Agriculture is to transform how we support farming and food production in Scotland to become a global leader in sustainable and regenerative agriculture.^[43] It highlights the health benefits of high quality, nutritious food that is locally and sustainably produced, and commits to supporting and working with farmers and crofters to meet more of our own food needs sustainably and to farm and croft with nature. The Agriculture and Rural Communities (Scotland) Act 2024 establishes a Code of Practice on Sustainable and Regenerative Agriculture. The Code will provide best practice guidance to support the uptake of sustainable and regenerative agricultural practices across Scotland’s farms and crofts. Organic agriculture is also regaining momentum with the area farmed organically growing steadily in Scotland over the past six years. ^[44] The forthcoming organic action plan will help us to meet our ambition of doubling the amount of land used for organic farming by 2026 and encourage greater consumption and availability of organic produce. We must always be mindful of any potential unintended consequences of a strategy that does not encourage and support domestic food production - including meat and dairy. Any offshoring of our emissions through importing less sustainable meat and dairy products from other countries is counterproductive for health and emissions reduction.

We recognise that encouraging a shift towards sustainable, healthy diets is a complex challenge, since the choices we make about food are deeply rooted in culture and strongly influenced our food environment, including availability and cost. Guided by our Good Food Nation Plan, we will continue to explore opportunities for supporting change at all levels of the food system to ensure sustainable, healthy food is available and that people can access and afford it. Crucially, we will ensure that the transition to sustainable and regenerative agriculture is achieved through a just transition that continues to support a thriving rural economy and communities and a prosperous food and drink sector. We will also continue to deliver on our ambition for Scotland to be a global leader in healthy, quality, sustainably harvested and farmed seafood.

Tackling food waste is important for reducing emissions and pressure on nature. We will deliver the actions set out in the Circular Economy and Waste Route Map to reset our approach to tackling food waste, recognising that the scale of the problem has increased in Scotland over the past decade, with a 5% increase in the tonnage of food wasted.^[45] This will include developing an intervention plan to guide long-term household behaviour change to reduce food waste and help people save money on food bills.

Transport

As Scotland’s highest emitting sector, improving the sustainability of how we travel is a key priority. Although wider action is underway to reduce transport emissions linked to business and trade, for example from Heavy Goods Vehicles and shipping, this section focuses on opportunities to reduce emissions through how we travel in our day to day lives.

As set out in the Sustainable Travel Hierarchy (Figure 9) in the National Transport Strategy, our approach to encouraging sustainable travel behaviours will involve promoting walking, wheeling, cycling, public transport and shared transport options in preference to single occupancy private car use. It will also include promoting the transition to electric vehicles and reducing emissions from aviation. Many of these changes can also benefit our health and wellbeing, create safer public spaces and help tackle transport poverty.^[46] The transport transition also presents new opportunities for businesses, helping to create jobs and increase trade and investment. For example, the installation and servicing of charging infrastructure has been identified as an area with the potential to attract significant inward investment.

We are taking ambitious actions to support these behaviour changes. For example:

• Collaborating with our partners, we are working to finalise our approach to reducing car use in a fair and just way as set out in our draft Transport Just Transition Plan, which will require a broad combination of interventions, including incentives and disincentives.
• We are delivering the approach set out in our active travel vision.^[47] This includes making it easier, safer and more appealing for people to walk, wheel or cycle through our Active Travel Infrastructure Fund, National Cycle Network and People and Place Programme. In 2023-24, we delivered over 115km of new and upgraded active travel infrastructure and more than 140 new or improved pedestrian and cyclist crossings.^[48]
• We are supporting affordable public transport through our concessionary bus schemes, which are the most generous in the UK, allowing over 2 million people to benefit from free bus travel. We have also committed to introduce an integrated public transport ticketing system, and we are improving the infrastructure for buses to help make the bus network more accessible for all and ensure reliable services.
• We are making significant progress in promoting the transition to electric vehicles (EVs), supporting our commitment to phase out the need for all new petrol and diesel cars and vans by 2030. For example:
• In 2024, Scotland introduced the four-nation Vehicle Emissions Trading Schemes (VETS) legislation. This incorporates the Zero Emission Vehicle (ZEV) Mandate, which requires the sale of new zero emission alternatives (reaching 80% of cars and 70% of vans by 2030) while preventing emissions from rising from non-ZEVs. As a result of VETS, we anticipate a reduction in cumulative emissions of 40 Mt by 2040, the size of total Scottish emissions in 2022. In 2040, emissions from cars and vans could be 72% lower as a result of the original VETS legislation.
• Scotland already has one of the most comprehensive public charging networks in the UK, with more rapid public EV charge points, on a per head of population basis, than any other part of the UK except the South East of England. In October 2024, Scotland met its goal for 6,000 public EV charge points two years ahead of target through a combination of public funding and increasing private sector investment. In December 2024, we published a draft Implementation Plan for delivering Scotland’s Vision for public EV charging, including a draft route map for the delivery of approximately 24,000 additional public charge points by 2030.
• Scotland is currently the only part of the UK offering support for consumers to purchase zero emission vehicles. To date, the Scottish Government’s interest free loan scheme has provided over £233 million in interest free loans to support the purchase of over 8,700 zero and ultra-low emission vehicles, saving an estimated 230k tCO2e.
• Scottish Government also continues to support consumers and businesses to install EV charging and has provided over £19 million in grant funding to support EV charging infrastructure for individual businesses and consumers, complementing the public EV charging network by supporting the installation of over 23,000 home and business charge points across Scotland. This infrastructure plays a critical role in enabling consumers and businesses to switch to EVs.
• We are also making significant progress in electrifying public transport, with 75% of all rail passenger journeys in Scotland now made on electric services and almost 600 zero emissions buses brought onto the roads since 2020.

The 2024 Aviation Statement sets out our approach to reducing emissions from aviation. As explained in the statement, we will continue working with the UK Government towards implementation of Air Departure Tax in Scotland.

We will set out further measures in the forthcoming Climate Change Plan to achieve the emissions reductions from transport needed to support delivery of our 2045 net zero target.

To support joint benefits for climate, nature and wellbeing, the Biodiversity Delivery Plan also commits to ensuring that every new transport and active travel infrastructure project incorporates elements of blue-green infrastructure. For example, new infrastructure projects planned for the National Trunk Road Network incorporate sustainable drainage systems, designed to balance functional requirements with ecological enhancements and ecosystem benefits, delivering connectivity with local habitats.

Housing

Decarbonising Scotland’s buildings is one of our most complex challenges and will eventually affect almost all households in Scotland. This will mean improving the energy efficiency of buildings (e.g. through insulation) and switching to clean heating systems like heat pumps and heat networks. These changes offer enormous potential for tackling fuel poverty, reducing energy bills and creating warm, comfortable homes that support better heath, but must be implemented in a way that avoids unfair financial burdens. Through the work of Home Energy Scotland and the support available through a range of schemes such as Warmer Homes Scotland, we will take forward measures to ensure we offer practical solutions to encourage energy efficiency and to enable families to stay warm. Scotland has some of the most generous grants and loans in the UK to support the move to clean heating, already benefiting over 150,000 households across Scotland. A Heat in Buildings Bill will be introduced later in 2025 which will set a target for decarbonising the heat in our buildings and include measures to boost the growth of heat networks.

The clean heat transition has the potential to create significant economic and job opportunities. These include opportunities for businesses advising on or installing retrofit measures, supporting the creation and maintenance of locally distributed jobs across Scotland. There are also export opportunities for manufacturers in the clean heat and energy efficiency supply chain. The Green Heat Finance Taskforce has published further information on the multiple benefits that the clean heat transition will create for Scotland’s economy, health and communities.^[50] The Taskforce has been considering how private finance can support the heat transition. We are discussing its conclusions with key stakeholders to inform our response, which will set out the actions we will take, in partnership with others, to develop the market for retrofit financing.

We also want to support people to improve the nature value of their homes and gardens. We have commissioned research on the household behaviour changes needed to support biodiversity goals, which will help to inform our approach.

Consumer choices

Lastly, there are important opportunities to improve sustainability and save money through changes in the way we purchase products. The ‘reduce, reuse, recycle’ hierarchy that underpins our circular economy policies is key to this. As a starting point, we need to reduce the overall volume of Scottish consumption to bring demand within the planet’s sustainable limits. This can be supported by changes in consumer behaviours, such as using products for longer and repairing them. We also need to promote reuse, for example by buying second hand, leasing and sharing items (e.g. through tool libraries). Increasing consumer choice by promoting reuse and repair can help people to save money and bring wider community benefits. It also offers significant potential to create jobs in the local economy. For example 10,000 tonnes of waste can create up to 296 jobs in repair and reuse, compared to 1 job in incineration, 6 jobs in landfill or 36 jobs in recycling.

We know that system-level changes are needed to empower people to make sustainable consumer choices, and to remove barriers, such as cost and lack of infrastructure for reuse activities^[51]. Significant action is already underway or planned. For example, the Circular Economy and Waste Route Map commits to identifying a package of support measures to improve the reuse experience for consumers. We will also continue to work with the UK Government to help ensure ecolabelling schemes provide clear information for consumers, learning from the developing approach in the EU.^[52] At a deeper level, there is a need for changes in wider societal attitudes to what a good quality of life entails and how closely this is connected to increasing material consumption.^[53] We have commissioned research to explore opportunities for encouraging circular economy behaviours, which will help to guide our approach. The forthcoming Climate Change Plan will also set out policies and proposals for action on reducing emissions associated with our consumption and use of goods in Scotland.

3.6 Scotland’s net zero, nature positive and circular economy thrives within the planet’s sustainable limits

The ambition of the Scottish Government’s National Strategy for Economic Transformation (NSET)^[54] is not just to grow our economy but, in doing so, to transform our country's economic model so that we build an economy that celebrates success in terms of economic growth, environmental sustainability, quality of life and equality of opportunity and reward.

As set out in the NSET, achieving these goals for environmental sustainability will mean driving the just transition to an economy that is net zero, nature positive and circular. These changes represent enormous new opportunities for green industries, jobs and innovation. We will make more efficient use of energy and resources, reducing costs for businesses and boosting productivity. Our economy will become more resilient by restoring natural capital and reducing businesses’ vulnerability to disruptions in global supply chains.

We recognise that our economy is embedded in the natural world, rather than operating independently from it (Figure 10). Our economy relies on the planet’s natural systems for the resources it needs, including food, materials and energy; vital services like water purification, storm protection and pollination; and its ability to assimilate wastes, including GHG emissions. The capacity of natural systems to provide these essential benefits is finite.

Currently, our demands on nature far exceed its capacity to supply. It is estimated that 1.7 Earths would be needed to sustain humanity’s current demands – or nearly 3 Earths if everyone lived as we do in Scotland. This is the root of the nature and climate crises. We must adapt to thrive within our fair share of our global environment’s sustainable limits, designing our economy to ensure we do not take from nature faster than it can regenerate itself.

To deliver this outcome, we will explore opportunities to build on progress in the following areas:

3.6.1 Driving the just transition to the green industries of the future

We published our new Green Industrial Strategy in 2024. It identifies areas of strength and opportunity for Scotland to grow globally competitive industries in the transition to net zero. These include:

• Maximising Scotland’s wind economy
• Developing a self-sustaining carbon capture, utilisation and storage sector
• Supporting green economy professional and financial services, with global reach
• Growing our hydrogen sector
• Establishing Scotland as a competitive centre for the clean Energy Intensive Industries of the future.

As part of this approach, we are promoting export competitiveness across Scotland through our support activities, especially through our Renewables and Hydrogen Sector Export Plans.

Complementing the Green Industrial Strategy, there are important opportunities for wider industrial sectors to support the just transition to a green economy and to harness the economic benefits this creates – for example:

Boosting industrial decarbonisation

Industry generates around one fifth of Scottish greenhouse gas emissions, mainly from manufacturing, mining and construction. There is strong potential to accelerate decarbonisation via energy and resource efficiency, fuel switching, use of sustainable materials and scaling up circular economy practices. This can help to create new market opportunities, cut costs and reduce reliance on international supply chains.

Alongside implementation of our Green Industrial Strategy, we will strengthen our focus on decarbonising industry through the measures outlined above. Our approach must address the emissions generated throughout the entire lifecycle of a product, building or infrastructure development, including emissions embodied in materials. Opportunities will be explored through the development of the Climate Change Plan.

Scotland’s industrial transition to net zero presents significant opportunities to attract investors and grow sectors that are globally competitive. By supporting industrial decarbonisation and the development of future low-carbon industries, we can build on our strong engineering skill base and culture of innovation to position Scotland as a prominent location for sustainable materials manufacturing. This transition can support high-value job creation, stimulate private investment and open up new opportunities for long-term economic growth.

Designing Scotland’s net zero energy system to help protect and restore nature

Emissions from electricity have fallen by almost 90% since 2010, due to a rapid rise in renewables. Scotland’s potential for renewable energy generation is one of our greatest net zero and economic opportunities, creating significant scope for economic development, inward investment and good, green jobs. The Green Industrial Strategy outlines how we will maximise the economic opportunities from this energy transition. Our capacity has rapidly increased from 6.7 GW in 2013 to 16 GW as of end of September 2024, with an estimated capacity of 30.9 GW in the planning pipeline.^[56] We are continuing to support this potential by harnessing public and private investment in renewable energy infrastructure and storage. We are also acting to make the planning and consenting regime for renewable energy generation more efficient to help provide more certainty to the market and to stimulate private investment.

We are committed to working collaboratively with the UK Government and other devolved governments to accelerate progress towards Scotland’s net zero targets. To that end, we have jointly (with the Welsh and UK Governments) commissioned the National Energy System Operator to produce a Strategic Spatial Energy Plan for Great Britain, which will take a GB-wide strategic approach to energy planning. We are also collaborating with the UK Government to take action in key policy areas that remain reserved, including investment in electricity grid upgrades and energy storage; reform of transmission charging and electricity market arrangements; exploring mandating community engagement; maximising community benefits; and introducing social energy tariffs.

We recognise the importance of ensuring that delivery of our ambitions for renewable energy also supports our national targets for reversing biodiversity loss. In the marine environment, we are considering proposals for a Scottish Marine Recovery Fund that could potentially be used to facilitate a nature positive approach to offshore wind developments. Our Fourth National Planning Framework (NPF4) strategy and policies support development that helps to secure positive effects for biodiversity, including for onshore energy development. NatureScot has commenced work to develop an adapted biodiversity metric to support delivery of NPF4 biodiversity policy. Together, NPF4 and the forthcoming second National Marine Plan will act as companion policies, setting out a coherent vision for future development on Scotland’s land and seas. We will explore options for strengthening our evidence base on the cumulative impacts of renewable energy and grid infrastructure on biodiversity.

Our forthcoming Bioenergy Policy Statement^[57] will set out guiding principles for biomass use, including principles for protecting and enhancing Scotland’s biodiversity and adhering to stringent sustainability criteria and environmental regulations. We will continue to engage with the UK Government to develop a cross-sectoral biomass sustainability framework.

As well as addressing impacts on biodiversity in Scotland, it is also important to minimise overseas environmental impacts from mining transition minerals used in batteries, turbines and power lines,^[58] and from any imported bioenergy feedstocks. We will explore opportunities for improving the sustainability of the overseas environmental impacts of our energy transition in Scotland. We will also continue to strengthen our evidence base on the interactions between energy policies and biodiversity to support our joined-up approach to tackling the climate and nature emergencies.

Reducing overall demand for energy is an important part of managing these tensions, for example by promoting use of public transport and energy-efficient homes. This can create many benefits, including reducing energy and infrastructure costs and our exposure to fluctuating energy prices. We will continue to work with stakeholders to support energy demand reduction across sectors.

Building regenerative and resilient land and marine-based industries

Scotland has a set of pioneering policies that provide high-level frameworks for promoting the delivery of multiple environmental, economic and social benefits from Scotland’s land and seas:

• Our Land Use Strategy sets out a holistic approach for encouraging sustainable land use, with the aim of ensuring that decisions about land use deliver improved and enduring benefits, enhancing Scotland’s wellbeing.
• The Blue Economy Vision recognises that economic prosperity and wellbeing are embedded within nature, and that in order to harness blue opportunities, Scotland’s economy and society must be transformed to thrive within the planet’s sustainable limits.
• The forthcoming second National Marine Plan will provide a new planning framework to further sustainable development and use of our seas, promote protection and recovery of our marine environment and support our varied and unique communities.

Our land and marine-based industries are key to our local rural economies and communities and play a profound role in shaping our natural environment - we need to ensure that they have a sustainable and resilient future. This includes encouraging practices that restore and regenerate the natural systems that underpin their productivity. As explained in Box F, for land-based industries, this includes adopting regenerative practices that protect, restore and enhance soil health, guided by our Soil Route Map.

A range of policies are in place, or under development, to support thriving, regenerative and resilient land and marine-based industries in Scotland. For example:

• Our vision for Scottish agriculture is to transform how we support farming and food production to become a global leader in sustainable and regenerative agriculture, while also enhancing animal welfare. A new framework is being developed that will underpin our agriculture support regime from 2025 onwards, in order to achieve this vision. The Biodiversity Delivery Plan sets out actions which will be incorporated into the new support regime to help farmers and crofters transition to practices that restore biodiversity and ecosystem health. Steps for promoting climate-friendly agriculture and embedding circular practices will be explored in the new Climate Change Plan.
• Scotland’s Forestry Strategy 2019-29, sets out a framework of actions to expand, protect and enhance Scotland’s forests and woodlands, in order to deliver greater economic, social and environmental benefits. The Biodiversity Delivery Plan includes additional actions for ensuring that forests and woodlands deliver increased biodiversity and habitat connectivity alongside timber and carbon outcomes.
• Our Fisheries Management Strategy 2020-30 sets out our approach to managing Scotland’s sea fisheries as part of the wider Blue Economy to deliver the best possible results for our marine environment, our fishing industry and our fishing communities. Further actions for supporting nature-positive fisheries are included in the Biodiversity Delivery Plan.
• The Vision for Sustainable Aquaculture sets out actions to create more sustainable economic and social benefit from fish, seafood and seaweed farming in the future, in order to reduce the sector’s impact on the environment and ensure high standards of health and welfare.

Box F: Healthy, thriving soils

Our soils support all nature-based systems across all landscapes, and therefore underpin Scotland’s economy. We all rely on healthy, thriving soils for a wide range of essential services, including food production, fresh water, clean air, climate regulation, biodiversity and archaeological preservation. Healthy soils support important economic sectors, including food and drink, forestry and timber production, recreation and tourism. Soils also underpin our cultural heritage and our health and wellbeing. However, there are many pressures and threats to Scottish soils - including soil sealing, compaction, erosion, loss of organic matter, contamination and loss of biodiversity - which lead to degraded and non-functional soil. These are exacerbated by land use pressures and our changing climate. It is estimated that compacted soils in Scotland cost £9-49 million in losses annually, with a need for additional fertiliser application (costing £9-26 million per year) and increased flooding risk resulting in insurance claims (costing £57,000 to £76,000 per household).

Good soils management is therefore important to deliver thriving and healthy soils that support Scotland’s economy, culture and people, and help us to address the twin nature and climate crises. The Climate Change Committee has recognised the climate resilience value of investing in healthy soils, and that this is an adaptation priority for Scotland.

Through the Scottish Biodiversity Strategy Delivery Plan and our National Adaptation Plan, we will continue work across government, with stakeholders and Scotland’s communities to put in place actions that protect, restore and enhance soils. We will build upon our recently published Soil Route Map to ensure the actions taken across all sectors result in thriving soils that underpin our landscapes’ ability to adapt to climate change, and to support the economy and people of Scotland.

3.6.2 Empowering Scottish businesses to prosper sustainably

Businesses have a pivotal role in supporting the economic transformations needed to tackle climate change, nature loss and pollution. As part of our wider approach to economic development, we are committed to nurturing purposeful businesses. This means supporting the enormous potential for business as a force for good in society - contributing to a thriving economy and healthy, prosperous, more equal communities, and helping to safeguard our planet for future generations. Evidence shows that embedding clear purpose makes businesses more successful by boosting innovation, productivity and long-term profitability, and responding to increasing demands from customers and investors for ethical and sustainable business practices. It also improves businesses’ resilience in times of crisis. To harness these benefits, we established the Business Purpose Commission, in partnership with Prosper,^[59] to explore ‘how Scotland can become known at home and globally for nurturing purposeful businesses which make a positive impact on economic prosperity, social wellbeing and environmental sustainability.’ We have responded^[60] to the Commission’s recommendations^[61] and will continue to pursue opportunities for building Scotland’s leadership in this area.

We recognise that the transformations described in this Strategy have implications for business. Government has an important role to play in creating an enabling environment by helping to ensure that sustainable choices are affordable and practical for businesses, and providing the certainty needed to build business and investor confidence. We must also be able to communicate the benefit for business as we proceed. To do this, we need to work in partnership with businesses to understand the opportunities offered by these economic transformations, as well as potential barriers, including costs and any implications for international competitiveness. This partnership approach is at the heart of our New Deal for Business commitment.

Significant action is already underway to help businesses to capture the benefits from embracing sustainable business practices. This include grants, tools and advice from our Enterprise Agencies, Zero Waste Scotland, the Scottish Business Climate Collaboration and the Net Zero Nation website. We also support the Scottish Environment Business Awards, in order to celebrate innovation and success. Building on these approaches, we will explore further opportunities to support businesses to:

Strengthen environmental risk management

Reporting information on environmental impacts and risks, and using this to guide business planning, can help businesses to improve their sustainability while also creating a range of potential economic benefits. For example, it can help to maintain or enhance businesses’ competitiveness in global markets, particularly given requirements in some regions for imports to meet environmental due diligence requirements. It can help to secure access to capital, recognising the growing expectations from investors for businesses to disclose their environmental impacts. It can also help businesses to plan ahead for how their operations and supply chains may be impacted by climate and nature-related risks and dependencies.

International frameworks have been developed to facilitate reporting.^[62] We will work with businesses to explore opportunities for harnessing these benefits by supporting voluntary reporting. This will include improving our understanding of the scenarios where voluntary reporting could achieve the greatest positive impact (e.g. taking into account the size of businesses), what barriers businesses may experience and options for addressing these. This will help to deliver our obligations under the new Global Biodiversity Framework^[63]. We will also work with the UK Government to understand the implications of new mandatory reporting requirements in the EU for Scottish businesses exporting to Europe, including the Corporate Sustainability Reporting Directive.^[64]

Over time, this Directive and initiatives such as the Taskforce on Nature-related Financial Disclosures could increase demand in voluntary nature and biodiversity markets as UK companies increasingly incorporate nature-based solutions into their long-term strategies for financial disclosure, transition planning and supply chain management. This is explored further in the section on public and private finance on page 50.

Embrace circular economy business models

Businesses can make a significant contribution to reducing their carbon footprint and impact on nature by adopting circular business models. At the same time, this has the potential to create important growth opportunities for businesses. Being more circular can boost businesses’ productivity by increasing efficiency and reducing waste. It can both bring down input costs and increase the value from final goods by extending their lifetime. It can generate new revenue streams, for example by offering repair and servicing opportunities, or by using co-products or waste to make a product. By creating new value from materials that have previously been considered waste, it can reduce businesses’ dependence on virgin material, including that imported from abroad. This, in turn, can help to ensure that Scotland’s businesses are more resilient to the growing risks associated with global supply chain shocks and resource scarcity, particularly for critical materials where global demand is rising.

Zero Waste Scotland provides advice and support for businesses to transition to circular business models. The Circular Economy and Waste Route Map identifies opportunities for businesses to improve their circularity - for example, by prolonging product lifespans; putting in place reporting to improve the management of food waste and surplus; avoiding disposal of unsold goods; and encouraging leasing, repair, refurbishment and reuse of products. The Route Map also commits to developing a Product Stewardship Plan to provide a framework for prioritising products where producers will have responsibility for addressing environmental impacts. The forthcoming Circular Economy Strategy will build on this by identifying priority sectors and systems where action is needed, giving a clear direction of travel for businesses.

Pioneer new green ways of doing business

Scotland’s thriving social enterprise sector is paving the way towards new, sustainable forms of business, galvanising our transition to a green economy. Green social enterprises are developing and scaling sustainable business models in a range of exciting areas, from community energy and food initiatives, to nature education, repair cafes and sharing libraries. By combining entrepreneurial zeal, creativity and passion for social purpose, they are helping to create innovative solutions to social, environmental, and economic challenges while enhancing community resilience and promoting social justice.

Our vision is for social enterprises to be at the forefront of a new wave of ethical business in Scotland, guided by our Social Enterprise Strategy. Our 2024-26 Action Plan - Social Enterprise: Driving a Wellbeing Economy for Scotland – sets out ambitious steps for realising the full potential of social enterprise, building on Scotland’s leadership in this area and learning from experience in other countries. We also support Social Enterprise World Forum, which works internationally to support social enterprise and share best practice. The Forum has recently launched a new accreditation scheme called People and Planet First to support integration of social enterprises into international supply chains, helping to scale up business models that support social justice and sustainability.

3.6.3 Embedding sustainability throughout supply chains

Since Scotland is embedded in global value chains, it is important to understand and address the environmental impacts along whole supply chains of the goods and materials we import. This includes the emissions generated at different stages, including production, processing, and transport. Environmental due diligence requirements for businesses can be a key mechanism for improving supply chain sustainability. This is a reserved area. However, we will continue to engage with the UK Government on potential opportunities for due diligence measures, including on the development of new due diligence requirements for tackling global deforestation and forest degradation. We will also consider the implications of strengthened EU action on due diligence.^[65]

We are collaborating with the UK Government to support the development of a Carbon Border Adjustment Mechanism (CBAM) to impose a price on carbon emissions embedded in certain imported goods, helping to support global progress towards net zero and address the problem of ‘carbon leakage’.^[66] To ensure the CBAM does not detrimentally impact Scottish business operations, and certain imports and exports, we will also aim to engage with the UK Government as they seek to link the UK Emissions Trading Scheme with that of the EU.

Finally, we will continue to advocate to the UK Government to fully consider environmental impacts and opportunities during the negotiation and implementation of trade deals, and within WTO multilateral discussions.

3.6.4 Enabling these transformations

We recognise that government has an essential role in empowering and enabling Scotland’s businesses and industries to embrace these opportunities, and to harness the benefits this will create. For example, we are exploring the potential to:

Ensure sustainability standards provide clear direction for business and secure access to market

Sustainability standards for products and services have been a key driver of decarbonisation. Action is underway to strengthen standards in areas where Scotland has devolved powers, in ways that will create wider economic opportunities.

For example, in 2024 we set ambitious standards for clean heating through the introduction of the New Build Heat Standard, and we are currently developing proposals to deliver a Scottish equivalent to the Passivhaus standard to further improve the energy efficiency of new buildings.^[67] As explained on page 37, the clean heat transition has the potential to create significant economic and job opportunities in Scotland, including export opportunities for manufacturers in the clean heat and energy efficiency supply chain.

We have also committed to explore opportunities for introducing or strengthening standards for priority products identified through the forthcoming Product Stewardship Plan. Alongside this, we will engage with the UK Government to explore opportunities for aligning with the new EU Ecodesign Regulation,^[68] which forms the cornerstone of the EU’s approach to improving product sustainability. Improvements to product sustainability standards offer significant economic opportunities for Scotland and the rest of the UK. For example, WRAP have estimated that policies to promote packaging reuse could result in a net saving to the UK economy of around £2 billion per year and create around 70,000 new jobs. Similarly, significant growth is expected in the EV and battery sectors as Scotland continues its transition to electric mobility and clean power. Ensuring that Scotland keeps pace with new EU requirements for batteries, including digital passports, would enable harmonisation with the sector’s top trading partner, helping to secure market access for Scottish businesses. It would also support investment in domestic reprocessing for the 6,000 tonnes of batteries Scotland currently exported each year at their end of life.

Consider future development of tax measures to ensure sustainable options are cost effective for businesses

There is increasing interest in role of tax levers in incentivising behaviour changes needed to achieve climate and nature goals. For example, they can help ensure sustainable options are more cost-effective for consumers to purchase and businesses to produce. They can also help raise revenues for investment in public services and environmental projects.

Scotland’s Tax Strategy, Building on our Tax Principles, sets out the next steps in the evolution of the tax landscape in Scotland. We will deliver the commitment in the Strategy to consider how taxes can support positive behavioural change, including incentivising those needed to achieve climate and nature goals. Current examples of this include the introduction of the Scottish Landfill Tax, which has supported progress towards a circular economy and highlighted how tax can be effective in encouraging behaviour change.

Moving forward, we will complete the introduction of the Scottish Aggregates Tax and work with the UK Government to implement Air Departure Tax in Scotland. We will also explore options for a potential Carbon Land Tax, as part of our work with the Scottish Land Commission to consider the role of taxation in supporting land reform and reducing emissions from land use. As we take this forward, we will consult with land owners and investors to understand the potential impacts of a Carbon Land Tax.

These commitments are supported by the recent publication, alongside the Tax Strategy, of a review of international examples where fiscal measures were used to support emissions reductions,^[69] which adds to the evidence base and discourse on the role of tax in achieving environmental objectives. While the report does not represent Scottish Government policy, the principles identified will help guide and inform policy development wherever appropriate opportunities to use our tax powers are identified. When considering such opportunities, we will also engage with and carefully assess impacts on communities and businesses, to ensure fairness and help tackle inequalities.

Strengthen coordination across regional and place-based initiatives

There are already good examples of regional and place-based economic development policies supporting sustainability ambitions.^[70] We will continue to consider where and when delivery of certain goals may be more effectively driven at a regional level. We will also work with regional partners to explore opportunities to improve coordination with regional environment and climate initiatives to strengthen delivery of shared goals.^[71] For example, this could include enabling collaboration and knowledge-exchange across partnerships and exploring opportunities to scale up implementation of innovative approaches that deliver multiple benefits, like community energy and blue-green infrastructure. This could help to build thriving, green local economies, aligning with the holistic approach recommended in our Wellbeing Economy Toolkit.

Reflect environmental aspects of wellbeing in how we measure economic success

The National Performance Framework (NPF) is Scotland’s wellbeing framework. Its National Outcomes describe the kind of country we want to be, with indicators for tracking progress. The Scottish Parliament’s inquiry into the review of the NPF and National Outcomes concluded in January 2025. We will now consider the recommendations, and wider evidence, to support the development of the next iteration of the NPF. Complementing the NPF, our Wellbeing Economy Monitor assesses the development of a Wellbeing Economy in Scotland by drawing on health, equality, fair work and sustainability indicators, alongside GDP. Environmental wellbeing features prominently in both of these frameworks. Scotland’s Natural Capital Accounts are also published as a complementary measure to GDP. We will ensure this broader understanding of wellbeing is reflected by integrating environmental sustainability and equality in policy development. We will also continue to engage with international partners, including through the Wellbeing Economy Governments Network, to deepen our understanding of how to bring wellbeing approaches into policymaking.^[72]

3.6.5 Investing in a better future

The transformations set out in this pathway will help chart our course towards a better future by tackling the climate and nature emergencies while creating new opportunities for jobs, businesses and the green industries of the future in Scotland. Achieving this will require significant investment of public and private finance, as well as targeted support for infrastructure, innovation and skills. To deliver this, we will explore opportunities to:

Unlock an appropriate mix of high integrity public and private finance

Achieving net zero and nature targets will require investment on an unprecedented scale, at a time when public finances are extremely stretched. However, the costs of inaction are far greater, and timely investment now will secure significant, long-term economic opportunities for Scotland.^[73]

The infrastructure investment needed to enable our net zero transition, in sectors such as renewable energy and buildings, goes beyond the scope of traditional funding sources and will require both public and private investment at scale.^[74] The First Minister’s Investor Panel has developed recommendations for attracting international capital to help finance these infrastructure needs.^[75] Building on these recommendations, we are adopting a new approach to how the Government and our agencies work with investors to attract the scale of global capital required to fully realise our ambitions and create a proactively ’investor-friendly’ environment. This offers important economic advantages for Scotland. For example, offshore wind is one of our most significant investment opportunities. We are investing up to £500m over 5 years to support market certainty, create a highly productive, competitive offshore wind economy and support thousands of jobs, while embedding innovation and boosting skills. Our strategic investment is expected to leverage additional private investment of £1.5 billion in the infrastructure and manufacturing facilities critical to growing the sector.

Similarly, our Biodiversity Strategy recognises that a range of funding sources are needed to support the scale of nature restoration needed to meet biodiversity targets. The Biodiversity Investment Plan identifies the actions needed to mobilise public, private and philanthropic finance. This is supported by the Natural Capital Market Framework, which sets out the steps the Scottish public sector will take to attract responsible private investment in natural capital. The market framework focuses on three key areas:

i) Expanding high-integrity voluntary carbon markets through the Woodland Carbon Code^[76] and Peatland Code^[77];

ii) developing credible opportunities for investment in Scotland’s nature and biodiversity;

iii) embedding Scotland’s six Principles for Responsible Investment in Natural Capital.^[78]

Guided by these principles, we will continue to ensure our approach to attracting high integrity private finance is designed to avoid greenwashing and deliver a just transition. We will continue to take a strategic approach to overseeing the roles of different funding types, ensuring they are deployed and targeted in a way that reflects the priorities they are best suited to deliver.

For example, to ensure companies can invest in high-integrity ecosystem restoration and biodiversity initiatives, the market framework commits the Scottish Government to exploring options for an ecosystem restoration code. This code would establish robust governance, measurement, reporting, and verification standards – helping to channel responsible private investment into projects that enhance ecosystem structure, function, and resilience. We aim to have fully tested options for this new ecosystem restoration code by 2026. This will include defining its objectives, ownership and governance structure, monitoring and verification approach, and the process for issuing nature credits. The code is being co-developed with stakeholders and informed by the outcomes of the recently completed CivTech contract with CreditNature.^[79]

The Scottish National Investment Bank also plays an important role in leveraging private finance through its missions on net zero and place. The Bank’s Investment Strategy^[80] outlines its positions as a mission impact investor, investing where the private market is failing to invest; and a cornerstone investor, crowding in private sector investment alongside its public capital.

Public investment will continue to play a vital role in supporting delivery of climate and nature goals. Green budgeting tools can be used to help improve our understanding of the environmental impacts of public spending decisions. Scotland is already taking an ambitious approach by publishing assessments of the climate impact of each Budget.^[81] In 2024, we piloted a new assessment to provide improved information on climate impacts and incorporate a wider range of goals, including biodiversity and climate adaptation. We aim to mainstream this from 2025.

Support international efforts to green the financial system

The Scottish Government established an industry-led Scottish Taskforce for Green and Sustainable Financial Services (convened by the Global Ethical Finance Initiative) to set out the actions needed to help position Scotland as a leading centre of global excellence in green finance. We responded to the Taskforce’s recommendations in September 2024, which included finding investments for green projects in Scotland.^[82] It is also important to ensure the financial sector avoids funding activities that have damaging environmental impacts. For example, evidence suggests some investment activities of UK banks are linked to deforestation. This is a major global issue and extends beyond Scotland’s devolved powers. However, we will seek to support international efforts to green the financial system, working with the UK Government.

Promote implementation of the sustainable procurement duty

The Scottish public sector spends more than £16 billion a year buying goods, services and works.^[83] To support our sustainable procurement duty, the Sustainable Procurement Tools help public sector organisations optimise environmental outcomes from their procurement activity. This purchasing power can direct flows of finance towards green business activities, helping to stimulate market development and innovation. We will further develop these Tools and promote their use across the public sector. This will draw on commissioned research to explore opportunities for strengthening delivery of circular economy goals through public procurement decisions.^[84]

Invest in the infrastructure needed for Scotland’s green economy

Infrastructure will play a pivotal role in enabling these transformations. We will continue to invest in the infrastructure needed to achieve our goals for net zero and circular economy. We want our infrastructure to be designed using sustainable materials and to plan ahead for reprocessing decommissioned infrastructure. The Green Industrial Strategy commits to developing interventions to support a circular approach to the energy transition, including pioneering approaches for recycling or remanufacturing renewable wind economy facilities at the end of their life. It highlights the important benefits this will create for Scotland’s supply chain resilience. Zero Waste Scotland has committed to developing a roadmap, working with the both the built environment and net zero infrastructure sectors, to promote circular practices and the economic opportunities that flow from that.

The consideration of lifecycle greenhouse gas emissions of developments is an important component of sustainable infrastructure design. National Planning Framework 4 states that developments should be sited and designed to minimise lifecycle greenhouse gas emissions as far as possible.^[85] We are developing supporting guidance which will provide information on tools and approaches that can be used to help demonstrate whether and how lifecycle emissions of development proposals have been minimised.

We also want to expand the use of blue-green infrastructure, given the strong potential for delivering multiple benefits for Scotland’s economy, communities, environment and climate resilience (see Box E). The Infrastructure Investment Plan 2021-22 to 2025-26 sets out a strategic approach to delivering our National Infrastructure Mission.^[86] One of its three core themes focuses on supporting Scotland’s net zero transition and environmental sustainability. It also introduces a new definition of infrastructure, incorporating natural infrastructure. Future strategic infrastructure needs, from 2026 onwards, will be addressed in the next Infrastructure Investment Plan.

Catalyse these transformations by supporting innovation

Our National Innovation Strategy sets out a vision for Scotland to be one of the most innovative small nations in the world. It identifies priorities for driving the innovation needed for our net zero energy transition and recognises further opportunities for innovation in natural capital investment^[87]. Building on this, we are exploring the scope for mission-led approaches to boost innovation and delivery of policy goals in key areas, for example in maximising the impact of our Green Industrial Strategy.

Support the green skills needed by Scotland’s workforce of the future

We recognise the critical importance of meeting the skills needs for Scotland’s just transition to a net zero, nature positive, circular economy, and harnessing the opportunities this creates for good, green jobs. Scotland leads the UK in creating green jobs, with the number advertised tripling since 2021.^[88] This demonstrates that our education and skills system is already adapting, with colleges and universities acting as key anchor points for research, innovation, and training. In addition, we are delivering an extensive programme of reform for our education and skills system, making it more agile and responsive to our strategic skills needs, which will help to ensure we support the green skills needed by our current and future workforce.

A significant programme of action is already underway to support net zero skills, with skills now being mainstreamed throughout our climate policies, including the Green Industrial Strategy, just transition planning and sector-based initiatives. For example, we have established a Grangemouth Industrial Cluster skills offer to support the industrial transition, and we have already allocated £9.7m to a package of skills-focussed projects through our Just Transition Fund for the North East and Moray. Through this, we are enabling workers to develop the green skills they need, as well as kickstarting the development of the recently launched skills passport for oil and gas workers seeking to transition into renewable energy. We are also providing targeted funding to colleges in 2025-26 to establish an Offshore Wind Skills Programme, helping to create region-specific training hubs for offshore wind skills.

Alongside this investment in net zero skills, we will continue to address wider green skills needs, supported by actions in our circular economy and biodiversity policies. Around one in ten jobs in Scotland already relate to the circular economy and there is significant potential for expansion. As outlined on page 38, 10,000 tonnes of waste can create up to 296 jobs in repair and reuse, compared to 1 job in incineration, 6 jobs in landfill or 36 jobs in recycling. The transition to a circular economy provides a wealth of opportunities for creating both high quality and entry level jobs and roles, in areas with persistently high unemployment. To help realise these benefits, the Circular Economy and Waste Route Map sets out a range of actions designed to support the skills needed for the jobs and roles of a circular economy. Jobs in nature-based sectors also already make an important contribution to Scotland’s economy and there is significant potential for growth.^[89] Next steps for realising this, through support for nature-based skills, are set out in the Biodiversity Delivery Plan and NatureScot’s Nature-based Jobs and Skills Implementation Plan.

Lastly, within the public sector, we will consider opportunities for strengthening climate and nature literacy, to empower staff at all levels to take steps towards tackling the climate and nature crises in their organisations.

3.7 We build Scotland’s resilience to climate change and other global environmental risks

The climate and nature emergencies are an existential threat to humanity. According to the World Economic Forum’s 2025 Global Risks Report, the top four risks facing countries around the world over the next decade are environmental. These include the impacts of climate change, biodiversity loss and risks of crossing Earth system tipping points (Figure 11). As well as planning for the transition of our economy and society so that we can live and prosper within sustainable limits, we must build Scotland’s resilience to these risks.

3.7.1 Building Scotland’s resilience to climate change

Global temperature rise has pushed past the internationally agreed 1.5°C warming threshold for a 12-month period, and we know this is set to increase further, with some impacts locked in for decades to come. Scotland is already feeling tangible effects of climate change. Nine out of ten of our hottest years have all come in the 21st century, and the increased frequency of storms, floods and droughts is already having a real impact on our communities, public services and key sectors in our economy. Adapting to climate change is at the heart of the Scottish Government’s mission to improve the wellbeing of people living in Scotland, now and in the future. The CCC advises planning for a global temperature rise of 2°C and assessing risks up to 4°C. While we know it is vital the world comes together to avoid such catastrophic scenarios, early planning and preparation is better than late response and recovery.

Our Scottish National Adaptation Plan 2024-2029 sets out a long term vision for building Scotland’s resilience to climate change, with ambitious actions over the next five years to support communities, businesses, public services and nature to adapt to the changing climate in a way that is fair and inclusive. We are also investing in supporting adaptation measures. For example, we have boosted the annual £42m funding to local authorities for flood protection with £150m extra over this Parliament and £12m for coastal erosion.

Scotland’s first Flood Resilience Strategy was also published in December 2024 and sets out what is needed to make our communities more flood resilient over coming decades. It focuses on building community flood resilience and resilient placemaking, puts people at the heart of the process and supports an increase in the range and rate of delivery of actions both to manage our flood exposure, and to reduce the impacts of flooding when it does occur. The Strategy supports a flood resilient places approach, recognising that reducing the impacts of flooding is as much about the design of our places as it is about the design of specific flood actions.

3.7.2 Building Scotland’s resilience to nature-related risks

The World Economic Forum’s Global Risks Report identifies biodiversity loss and ecosystem collapse as the second greatest risk facing humanity over the next decade. Nature is our life support system, we all rely on it for our survival and quality of life – from the air we breathe to the food we eat, to sources of medicine and the foundations of our economy. Halting and reversing nature loss is of fundamental importance for the future of humanity and all life on Earth.

Nature loss also poses immediate risks for our prosperity and wellbeing. While our economy is ultimately entirely dependent on nature (Figure 10), over half the world’s GDP is moderately or highly at risk from nature loss.^[90] The Green Finance Institute identifies declining soil health, water shortages, global food security repercussions, zoonotic diseases (like Covid-19) and antimicrobial resistance as the most important nature-related risks impacting on the UK economy. [91] It estimates that these risks are at least on a par with those posed by climate change. Since half of these risks come from overseas, through supply chains and financial exposures, it is vital to continue to work internationally to tackle nature loss, alongside restoring nature in Scotland.

3.7.3 Climate and nature-related risks are intrinsically linked

The risks from nature loss and climate change are mutually reinforcing, so a joined-up approach to tackling them is essential (Figure 12). Restoring nature on land and in our seas is not only vital for tackling the nature-related risks mentioned above. It is also our best chance for building Scotland’s resilience to climate change. By investing in ecosystem health, we can help to ensure Scotland’s people, and the rest of nature, can adapt to the inevitable impacts of climate change. The Adaptation Plan sets out actions for using nature-based solutions as a climate adaptation tool, including landscape-scale approaches to strengthen nature’s connectivity and resilience.

3.7.4 A resilient, net zero, nature positive Scotland

Becoming a net zero, nature positive nation will increase the resilience of our economy and communities in other ways too. For example, achieving our vision for a flourishing, net zero energy sector will improve our energy security, reducing the exposure of households and businesses to fluctuating energy prices. Building a circular economy will make us less vulnerable to disruptions in global supply chains. The many opportunities to improve people’s health through promoting sustainable transport, low carbon heat, tackling pollution and improving access to nature will support a preventative approach to health care, increasing the resilience of our public services.

Looking ahead, we will continue to build our resilience to climate change and nature-related risks by implementing the actions in our Adaptation Plan and Biodiversity Delivery Plan, as well as helping to tackle overseas nature loss through the pathway for the outcome ‘Scotland’s global environmental impact is sustainable’. We are integrating climate- and nature-related risks into our approach to horizon scanning in government. We will also explore opportunities for helping businesses to benefit from improved environmental risk management, as described on page 45.

3.8 These transformations are achieved through a just transition and support climate and environmental justice

These transformations present huge opportunities for strengthening Scotland’s economy, creating jobs, tackling inequalities and improving the health and wellbeing of people across Scotland. We are committed to ensuring these benefits are shared widely, through a just transition. This means equipping people with the skills needed to secure high-value jobs in green industries, while also providing job security for those in industries that will play the biggest part in the transition. In parallel with our just transition, we are committed to supporting climate and environmental justice overseas.

3.8.1 Delivering the just transition to a net zero, nature positive Scotland

Scotland has taken a pioneering approach to supporting our just transition to net zero, guided by statutory just transition principles and advice and scrutiny from our independent Just Transition Commission.

In our 2021 National Just Transition Planning Framework, we committed to deliver Just Transition Plans for sectors, sites and regions, to outline how emissions reductions will be achieved in a way that supports just transition outcomes in the Framework. In 2023, we published a draft Energy Strategy and Just Transition Plan and we have recently consulted on draft Just Transition Plans for Grangemouth and the Transport sector. We will be consulting on a draft Just Transition Plan for Land Use and Agriculture later in 2025. Since 2022, we have allocated £75 million of our Just Transition Fund to projects and communities across the North East and Moray. Our new bidding round worth up to £8.5m for 2025-26 launched on 2 May, driving forwards the transition to net zero. Our ongoing support for the Fund will ensure we continue to create jobs, support innovation, and secure the highly skilled workforce of the future.

We will also apply just transition principles in our national efforts to tackle the nature emergency. A just transition approach is already embedded in our new Natural Capital Market Framework and the Biodiversity Delivery Plan commits to strengthening our understanding of how just transition principles can be applied to our transition to a nature positive future. This will include maximising the many opportunities for societal co-benefits discussed in these pathways and ensuring these are shared fairly, designing our approach to help tackle inequalities. It will also mean ensuring impacts on sectors and communities affected by the transition are fairly managed, supporting social justice.

Community-led action and public participation are at the heart of our ambitions for a just transition. We are supporting this through a wide range of initiatives, including Community Climate Action Hubs and community energy^[92] and forestry^[93] projects.

The Scottish Government’s Community and Renewable Energy Scheme (CARES) encourages local and community ownership of renewable energy projects across Scotland. CARES provides advice and funding to communities looking to develop renewable energy, heat decarbonisation and energy efficiency projects. Since its inception, CARES has advised over 1300 organisations and provided over £67 million in funding to communities throughout Scotland, supporting over 990 projects.

It is essential to ensure that the renewable energy transition delivers real and lasting benefits for people across Scotland. In the last 12 months, around £30 million in community benefits from renewable energy projects were offered to Scottish communities,^[94] guided by our voluntary Good Practice Principles. These principles set national standards and foster strong collaboration between communities and developers. We recently held a public consultation to ensure these principles continue to reflect the needs of Scotland’s diverse communities, with a view to shaping updated guidance.

More broadly, we have commissioned Stockholm Environment Institute^[95] to review what evidence tells us about the most effective approaches for supporting community action and engagement in achieving our goals for climate and nature and will consider their recommendations in the design of future just transition policies.

3.8.2 Supporting climate and environmental justice in Scotland and overseas

Important environmental health inequalities exist in Scotland. These include inequalities in people’s access to quality greenspace and in their exposure to pollution and impacts of climate change. For example, around 2700 deaths per year in Scotland are attributable to air pollution, disproportionately impacting the young, the elderly and those with pre-existing health conditions. Inequalities in people’s access to greenspace near their homes are linked to factors including ethnicity and wealth. We are committed to taking action to address these inequalities, including through our policies on environmental quality and climate adaptation. As outlined on page 32, we will also continue to explore opportunities for using rights based approaches to strengthen environmental justice in Scotland. This will include supporting people’s right to access to justice on environmental matters, under the Aarhus Convention.

Lastly, Scotland has a strong moral obligation to support international climate justice. This recognises that people in the Global South are least responsible for causing the climate emergency but are impacted first and most severely by it. Climate justice is embedded as a principle in our 2019 Climate Change Act and is at the heart of our International Strategy. Scotland was the first nation to commit funds specifically to climate justice, launching the Climate Justice Fund in 2012, and we committed to trebling this to £36 million over the course of this Parliamentary Term.^[96] We were also the first Global North government to commit finance explicitly to address loss and damage,^[97] including £10 million from our Climate Justice Fund. In addition, we are partnering with the Climate Justice Resilience Fund to deliver a £5 million programme of non-economic loss and damage interventions, with a specific emphasis on supporting women and girls. Climate justice will continue to be a key area of focus in Scotland’s international engagement, including through our Feminist Approach to International Relations and our commitment to amplify the voices of communities and institutions in the Global South.