MSPs have formally established the Scottish National Investment Bank.

Scotland’s new public bank will be legally obliged to meet ethical standards following a vote in Holyrood on Tuesday which formally established the institution.

MSPs backed a government amendment which obliges the Scottish National Investment Bank to hold a list of minimum ethical standards for its investments, a key demand of environmental campaigners.

Existing changes to ensure the bank must finance a transition away from fossil fuels to help create a zero-carbon economy were also rubber-stamped.

Following the vote, Friends of the Earth Scotland is urging the Scottish Government to rule out any investment in fossil fuels and to publish in full the bank’s ethical policy and list of investments.

Ric Lander, the charity’s divestment campaigner, said: “Because of the hard work by climate activists the Scottish National Investment Bank must now invest in climate solutions and maintain ethical standards across its activities. This is a huge achievement. We can now say that the creation of this bank is good news in the fight against the climate crisis.

“With its legal obligations to tackle the climate crisis, the Scottish Government should now clarify that this new public bank will not invest in any fossil fuels, plastic production, deforestation or other projects that will push up our climate emissions.”

Mr Lander said the bank should invest in shaping Scotland’s economy for the future, prioritising “people and planet” in the shift to a zero-carbon economy.

He added: “With its objective to target finance towards a just transition this bank should be tackling fuel poverty, creating new renewables supply chain jobs, decarbonising our heating and financing zero carbon transport.

“Now that the Bill to create the Scottish National Investment Bank has passed parliament, it urgently needs to get going in providing finance that can help us realise a just transition to a fossil free economy.”