Scotland has seen the UK’s highest growth in economic activity from net zero businesses since 2022, according to new research.

A report from the Energy & Climate Energy Unit and CBI Economics states that Scotland’s green sector has grown by a fifth over that period.

North East Scotland is a key net zero hotspot, contributing 5.1% to the UK’s net zero economy. This figure is set to grow with the planned Energy Transition Zone, a 30–40 hectare innovation hub dedicated to renewables, particularly floating offshore wind and green hydrogen.

Energy generation was the key driver for this strong economic performance, accounting for 41% of the value generated by Scotland’s net zero economy.

“This is unsurprising given Scotland benefits from natural advantages in renewable energy, such as onshore and offshore wind, and is also home to local net zero hotspots, such as Aberdeen, to support the development of new technologies (for example, carbon capture and storage),” says the report, The Future Is Green.

“Scottish strength in net zero looks set to continue with the government’s flagship Great British Energy being headquartered in Aberdeen.”

Since 2022, Scotland’s net zero economy has grown by 20.1% and now makes up 4.9% of the Scottish economy, generating £9.1 billion in GVA for Scotland.

Over the same period, total employment supported by the net zero economy in Scotland has grown 19.5%, or the equivalent to 16,500 full-time jobs, and now supports 100,700 FTE jobs.

Across the UK, the net zero sector now supports the equivalent of 951,000 full-time jobs, including 273,000 directly tied to net zero businesses and 678,000 through supply chain and related activities.

Private investment has played a pivotal role in driving this growth, with net zero businesses attracting £23bn since 2019, alongside £1.1bn in Innovate UK grants.

The report found that jobs supported by net zero businesses were 38% more productive than the UK average, generating £105,500 in economic value per fulltime job. This led to higher-than-average wages, with these jobs generating an average of £43,076 to a full-time worker.

Yorkshire & the Humber, Northern Ireland, London, and the South East, have also demonstrated “remarkable” productivity and investment growth, with job productivity in these areas significantly outperforming regional averages.

“The results of this growth are clear: the net zero economy is not only driving environmental progress but also delivering transformative economic and social benefits across the UK,” says the report. “With its high productivity, investment, and innovation, the sector is a vital pillar of the UK’s transition to a sustainable future.”

The report concludes that over the past year, this sector has not only expanded by 10.1%, contributing an additional £7.7 billion to the UK economy, but it has also become a significant driver of job creation and productivity.

Louise Hellem, chief economist at the CBI, said: “Our analysis has consistently shown that the net zero economy is growing at a faster pace than the rest of the economy.

“This reflects growing investor confidence that adapting the economy to climate risk will secure huge competitive advantage through inward investment, export opportunities and mitigating volatility of high exposure to international energy markets.”

In a press conference last week, First Minister John Swinney said the Green re-industrialisation of Scotland would deliver “good jobs, well paid jobs, and a resurgence of economic opportunity”.

SNP MSP Jackie Dunbar said:  “Last week John Swinney said growing the green economy will deliver results for Scotland – these figures show that is already happening.

“Adding £9.1 billion to the economy, and an additional 16,500 jobs since 2022 – it is clear that Scotland is already seizing the economic opportunities of Net Zero.

“Across the UK and across the world we’re seeing the rise of politicians seeking to undermine the transition to Net Zero. 

“To combat this, it is absolutely essential that people see the vast economic benefits of taking action to combat the climate crisis in their day to day lives.”