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I ask David Ovens to respond on issues that were raised by the earlier panel and to talk a bit about Archangel Investors’ role and how you see your organisation addressing some of the funding gaps in support for SMEs?

Our main business is an evidence session on financing the transition to net zero for small and medium-sized enterprises. The session is intended to give us a snapshot of the SME experience during the transition to net zero, and of the financial help and support that is available. Our witnesses are all joining us remotely.

I thank everyone on the first panel very much for taking the time to speak to us. I welcome Jo Chidley, who is a co-founder of Beauty Kitchen; Michael Cusack, who is the head of sustainability and business transformation of ACS Clothing; John Ferguson, who is the managing director of Pi Polymer Recycling; Paul O’Keeffe, who is a partner at Thomas Tosh; and Murray Whittaker, who is the director of projects at Whittaker Engineering.

We look forward to hearing about the transition of your businesses to net zero, what you are hoping will come out of the 26th UN climate change conference of the parties, some of the challenges that you are facing, and what your thoughts are on access to financial support to facilitate the transition to net zero.

A few weeks ago, the committee heard from the Federation of Small Businesses and Scottish Enterprise, which talked about the difficulties for some businesses of making the transition to net zero and the pressures that Covid recovery is placing on businesses.

Mr Whittaker, your business is well established—I think that you have been operating for three decades. I am interested in how prepared you feel for the transition to net zero, what your business has done to make it fit for the future and what support you have had to enable that.

What made the business decide to take those steps? You said that there could be more funding available and regulatory incentives to make you make the change. Why did Whittaker Engineering decide to start on this journey now?

I have a short follow-up question. You have described a very positive picture of the levels of support that you are getting from Government agencies. You are in a very competitive market, because you are involved in fashion and textiles. How is the business able to compete internationally with an industry that has a reputation for overreliance on cheap products and cheaper textiles?

I thank all the panellists for spending time with the committee for what was a very interesting discussion. We will now have a short suspension, while we change over the witnesses.

We are joined by our second panel of witnesses, who will speak from the investment perspective. I thank panellists for joining us. I welcome Simon Crichton, who is head of relationship management at Triodos Bank UK; David Ovens, who is the joint managing director of Archangel Investors; and Fraser Sime, who is the regional director for SMEs and mid corporate at the Bank of Scotland.

We are holding this evidence session because we are weeks away from the start of the 26th United Nations climate change conference of the parties—COP26. We are interested in hearing witnesses’ expectations of COP26, as well as their responses to our evidence session this morning with SMEs.

I noticed that Triodos is a member of the bankers for net zero initiative, which has identified some issues for SMEs around misaligned or weak incentives and inadequate information in supporting businesses that are moving to net zero. Let us start in that area and talk about the support that is available. Simon Crichton, would you like to respond?

I have a couple of questions about the FTs on the back of Michelle Thomson’s questions. The cabinet secretary will know that Scottish Enterprise set out to the committee that it is facing a funding gap as a consequence of the drop in financial transaction returns.

Also, can you address the issue of the SNIB? The assumption was that FTs would provide the source of capital for the SNIB. Is the position on FTs to wait and see what the UK Government decides, or is an alternative plan being put in place for the SNIB? According to the forecasting that was originally done, it will be challenging if the financial transactions continue to be reduced.

Please come in, Ms Gray.

Thank you. Before we close, I will return to the issue of the Scottish National Investment Bank. You have given a firm commitment this morning to finance the SNIB and have also just referred to the bank’s independence. Has the Government set a target rate of return for the bank?

You will be aware that a number of bonus or incentive payments have been made in the initial months of the bank’s establishment. Previously, the Government said that there would be no annual financial target-based bonuses within the bank and there would be medium to long-term incentive schemes. Do you have a view on the recent bonuses and the payments that have been made in the short lifetime of the bank?

We will take a short break before the next panel.