Traditionally, your exterior walls were insulated inside of the wall. They were often painted on the outside. This is true for stucco, plaster, wood, and masonry. Recently, contractors have been offering new services that somewhat change the way it is done. You still need to have your walls insulated on the inside. Insulation on the inside of your walls helps to reduce the thermal bridging effect. It will also help dampen the noise. However, you need to protect your walls somehow. That is why new treatments for exterior walls have been developed.
As you might have assumed, hydrophobic treatments are treatments that are averse to water. When you talk with a contractor about exterior wall insulation in Scotland, they will talk about hydrophobic treatments. In Scotland, it rains fairly often. That rain will start to degrade and destroy just about any material over time. Lumber that has been pressure treated is resistant to rain and rot but consistent rain will slowly wear away at the material. Masonry is incredibly resilient. It will last for a very long time. However, it can start to be eroded by consistent rain. One of the ways to prevent that is by treating your house with a hydrophobic treatment.
You also want the walls to remain breathable so that they can dry faster. So, you want a hydrophobic treatment for your exterior walls that will allow air and moisture to escape the walls. None of this sounds as if is insulation, though. What does repelling water have to do with insulating your walls?
Your body understands a concept of heat exchange instinctually. When you get hot, you start sweating. It is not the actual moisture on your skin that cools you down. Instead, you cool down when the sweat evaporates and takes some body heat with it. The same is true of your walls. If your walls pick up moisture through the air or during a rainstorm, they will start to shed heat. When the water on your walls evaporates, it will take some of the heat in your home with it. This means that your walls will cool down faster and your heating bills will be higher.
If you want to cut down on your heating bills, you need to cut down on the amount of heat lost through your walls. You can do that by insulating the walls and by reducing moisture. It also helps if you reduce dirt on the walls. A good wall treatment will often make it easier to clean your walls as well. Cleaner walls will gather less moisture, which means less heat loss. All of these benefits will eventually lead to lower heating costs and a more comfortable home.