The position places Edinburgh ahead of global financial centres including Seoul, Paris, and Chicago, and puts it within touching distance of Sydney, Zurich and Singapore.

Glasgow also made strong inroads on the index, moving up seven places from 53rd to 46th position.

London has maintained its number 1 position in the index, highlighting the UK’s global strength as a green finance centre more broadly.

Commenting on the news, Sandy Begbie CBE, chief executive at Scottish Financial Enterprise, said: “The latest Z-Yen Global Green Finance Index is another mark of progress for Scotland’s ambition to be one of the world’s premier green finance centres.

“It’s hugely positive to see Scotland’s two largest cities carving out a name for themselves in this increasingly competitive arena and using their unique and historic strengths across areas like banking and asset management, as well as their growing strengths in different areas of technology.

“Scotland benefits from an incredibly diverse and high-quality financial services ecosystem which has made financing the journey to net zero a central priority.

“Working with stakeholders across business, government and broader society, we are ensuring that the big momentum we have seen, particularly since COP26, is underpinned by real progress to make sure we are taking advantage of the huge opportunities that green finance represents for Scotland.”