Scotland set to lead UK's green economic growth

2 September 2021

  • Scotland is in pole position to lead the green economic revolution as the UK seeks to recover from the pandemic.
  • London will play an important role in financing the transition. 
  • The UK Green Growth Index, developed by Oxford Economics for Lloyds Banking Group, analyses the UK’s readiness to drive a greener economy.

Scotland is in the strongest position to drive the growth of the green economy in the UK, according to the UK Green Growth Index, which has been developed by Oxford Economics and Lloyds Banking Group.

The nation leads the Growth Index (80.6) by a significant margin and is best-positioned to support the UK’s green economy based on its existing green infrastructure and future potential.

Scotland has a strong base of 21,000 existing green economy jobs in sectors such as onshore and offshore wind and hydroelectric power. Based on the size of its labour market, Scotland has the highest concentration of green jobs in the UK.

Relative to its population, Scotland also benefits from the largest number of higher education students studying green-related subjects such as engineering and technology, building and planning, and agriculture. The density of students in green-related subjects is more than 27% greater than in second placed Wales.

London's essential role in financing the transition

London has the lowest Growth Index score (36.5) as a largely service-based economy (91%).

The location of the City and region makes it difficult to develop green economic activity based on manufacturing and natural resources. London also has the lowest renewable energy capacity across the UK with limited options for wind or tidal turbines and less residential roof space for solar installations. 

Nonetheless, London has an important role to play in financing the transition to the green economy, given its role as one of the world’s leading financial centres. London already holds 17% of the total jobs in the UK and an estimated 12% of jobs in the UK green economy.

In total 42% of London workers operate in a STEM (Science, Technology, Engineering and Mathematics) based roles, the highest in the UK, and have the kinds of knowledge and skills needed to support the UK making long-term changes.

Wales primed to seize green opportunities

Wales follows Scotland closely in second place in the Growth Index (63.5) with the Welsh workforce accounting for almost 5% of the UK’s green economy jobs. The nation has a high share of green and automotive activity, and strong future growth in the energy sector is expected in Wales. 

However, 7% of Welsh jobs are still in high emitting sectors, presenting challenges to the balance of the nation’s economy. Investment will be needed to re-orientate infrastructure and economic activity towards cleaner activities and technologies in the future.

Other regions, such as the East of England, score well for research and development (R&D). The region invests an average of £1,064 per resident in R&D, which is almost twice the UK average and its proportion of STEM workers also sits above the UK average at 37%. However, the East of England is weakened by having a low proportion of businesses (5.5%) innovating to reduce their environmental impact.  

While Northern Ireland ranks mid-table for current proportion of jobs in the green economy, its Growth Index score (42.7) is held back by lower rankings for innovation and skills, while relatively low investment in innovation also holds back the score for Yorkshire and Humber (45.1). More investment in these areas could help them develop the technologies and techniques needed to decarbonise its economy and capitalise on green growth opportunities.

UK Green Growth Index

The UK Green Growth Index, developed by Oxford Economics and Lloyds Banking Group, explores how well placed the nations and regions across the UK are to capitalise on the opportunities of the green economy – defined as low carbon, resource efficient and socially inclusive.

Currently it is estimated the UK would need to invest £1.4 trillion between 2020 and 2050 with the potential for up to 2.5 million green jobs needed before 2050 to meet its net zero objective by 2050.

The Index considers each region’s existing base of green industry; innovation activity; take-up of relevant skills and training; and renewable energy infrastructure and use, to determine a ‘green growth opportunity’ score for each part of the UK.

The UK Green Growth Index


UK nation or region









South West England



South East England



The Midlands



North of England



East of England



Yorkshire and the Humber



Northern Ireland





Companies across the UK are actively participating in the green economy, according to additional Lloyds Banking Group research provided by YouGov.

More than one-third of UK businesses (36%) say engaging in the green economy is a high or very high priority for their company, rising to more than half (55%) of large organisations.

A quarter of those in North East England (26%), London (25%) and South West England (25%) say participating in the green economy is something they’re already exploring or operating in.

Jonas Persson, Managing Director Sustainability and ESG Finance, at Lloyds Banking Group, said: "The research shows clear signs that the UK’s green economy is starting to take shape. Every nation and region has its own story, but each has an important role to play in transitioning to a greener economy. In line with this research, we are committed to supporting regional regeneration to ensure no part of the UK is left behind by the transition. We will mobilise support across our business help to make sure every nation and region can seize the huge opportunities that the green economy represents.

"With the United Nations Climate Change Conference (COP26) taking place in Glasgow in just a few months, all eyes are on the UK when it comes to adopting greener ways of living and doing business. While COP26 is a moment of international cooperation, it also prompts us to consider how our domestic economy can thrive in the future."