First five UK councils join national Local Climate Bonds campaign
- commit to exploring green bond launch in next 18 months
Five councils from England and Wales today announce they have become part of the Green Finance Institute and Abundance Investment鈥檚 Local Climate Bond campaign, launched in July this year to drive the adoption of an innovative type of municipal investment. Following successful pilot issuances last year by Warrington and West Berkshire councils, Blaenau Gwent, Cotswold, Eastbourne, Islington and Lewes councils are the first of the UK鈥檚 404 authorities to commit to exploring the launch of a bond or related municipal climate investment within 18 months of the critically-important global climate conference, COP26, this November.
A Local Climate Bond is a type of 鈥榗ommunity municipal investment鈥� which was pioneered by West Berkshire and Warrington councils in 2020, and is expected to become a core part of the way local authorities finance their planned transitions to net-zero and meet the climate targets they have set out. These types of municipal investments allow local authorities to raise capital to fund specific 鈥済reen鈥� initiatives in their neighbourhoods, from wind farms to solar panel installations, rewilding and electric vehicle plans, through a regulated crowdfunding model. Local residents invest from as little as 拢5, benefitting from a low-risk and fixed return investment, comparable to other Government-backed investments such as Gilts, and a way to mobilise their savings to help tackle the climate emergency in their area.
Abundance has calculated that this type of climate investment could raise as much as 拢3 billion if issued by the 343 local authorities in England alone. Furthermore, for the first time, a new type of Community Municipal Investment (using a regulated peer to peer loan structure) is now available which is eligible to be held in an Innovative Finance ISA. This will enable councils to reach new investors and begin to tap into the 拢650 billion ISA market.
Dr Rhian-Mari Thomas OBE, Chief Executive, Green Finance Institute, says, 鈥淢any councils across the country have been driving forward ambitious plans to transition their public buildings, places and services to support a greener, cleaner future; it is exciting to see our first cohort formally committing to this innovative financial solution and we look forward to working with them, alongside Abundance Investment, to support net zero ambitions that will directly benefit their residents.鈥�
The Green Finance Institute and Abundance鈥檚 campaign works with councils鈥� finance, environment, and climate teams to share knowledge and provide close support through the process of understanding, formalising and then launching a Local Climate Bond, providing access to green finance and municipal investment experts throughout.
All five councils have declared climate emergencies and are working with their residents to identify and prioritise projects to be funded. Importantly, their locations, environmental challenges and identified green projects are varied, showing the appeal of this type of finance to places across the UK.
Blaenau Gwent 成人大片
成人大片lor Dai Davies, Deputy Leader and Executive Member for Regeneration and Economic Development at Blaenau Gwent 成人大片, commented:
鈥楥limate change is a global issue and it鈥檚 absolutely vital that we act now to protect our environment for the well-being of future generations. Funding for projects aimed reducing our reliance on fossil fuels is always a challenge. I am therefore pleased that we are one of the first 成人大片s to launch a local climate bond. This innovative model improves engagement with our local community, supports bringing locally identified projects like wind turbines to life quickly and fits perfectly with our decarbonisation plan鈥�.
Cotswold District 成人大片
Cllr Rachel Coxcoon, Cabinet Member for Climate Change and Forward Planning at Cotswold District 成人大片, said:
鈥淲e need to be both ambitious and innovative if we are to meet our local, national and global greenhouse gas reduction targets. Giving Cotswold residents the opportunity to invest in regulated municipal climate investments is one way we can go faster and further in implementing green projects in our district. This initiative gives everyone the chance to be part of the solution to the climate crisis. It improves the local area, fights climate change, and gives a financial return. We are looking forward to taking the next steps to bring this exciting project to life.鈥�
Eastbourne District 成人大片
成人大片lor Jonathan Dow, Cabinet member for Climate Change at Eastbourne Borough 成人大片, said:
鈥淚 am delighted we are among the first councils in the country to support this campaign, underlining our commitment to delivering a carbon neutral town by 2030.
鈥淭his is one of various steps being taken towards that goal and particularly attractive because it would give local residents the option of investing some of their savings, which in turn contributes to helping our town tackle the climate emergency.鈥�
Islington 成人大片
Cllr Rowena Champion, Islington 成人大片鈥檚 Executive Member for Environment and Transport, said:
鈥淲e know that a cleaner, greener, healthier Islington will be a better and more equal borough for all.
鈥淚t is clear that urgent action is needed to address the climate emergency, with nearly three-quarters of 16-25-year-olds that took part in a recent survey revealing that climate change makes them frightened for the future. We owe it to present and future generations to act now to protect our planet, before it鈥檚 too late.
鈥淭hat is why we鈥檙e working tirelessly to tackle the climate emergency, through our programme of people-friendly streets, the ongoing electrification of vehicles across the council鈥檚 fleet, and by delivering greener, more affordable energy to households across the borough.
鈥淚t鈥檚 essential that residents, businesses and partners are at the heart of our vision, and we look forward to providing them with the opportunity to play their part in helping the council to build back greener.鈥�
Lewes District 成人大片
成人大片lor Matthew Bird, Cabinet member for Sustainability at Lewes District 成人大片, said:
鈥淭his campaign aligns perfectly with our target of becoming fully climate resilient and achieving carbon net zero by 2030.
鈥淚 welcome these bonds which would allow people across the Lewes district to invest as little as 拢5 in projects that help tackle the climate crisis in their community.鈥�
Karl Harder, co-founder and Managing Director, Abundance Investment, says, 鈥淟ocal 成人大片s will play a vital role in the success of the UK鈥檚 transition to Net Zero, and launching a Municipal Climate Investment has proven an effective way to galvanise local interest and energy. Individually the challenge of the climate emergency can feel daunting but by investing together we can kick start hundreds of local green revolutions, investing from 拢5.鈥�
The Local Climate Bond initiative is supported by UK100 and Innovate UK.
Polly Billington, Chief Executive, UK100, says:
"The ambitious local authorities in UK100's Network need to finance the projects that will enable the place-based transition to Net Zero, many of them are developing good investment opportunities underpinned by a strong business case. These bonds won't just help us meet our goals on climate but enable local authorities to access the economic opportunity Net Zero represents on behalf of their communities."
West Berkshire and Warrington councils each issued a pilot Local Climate Bond in 2020, raising 拢2 million in total for projects including solar panels, habitat restoration, tree planting and LED lighting.
The Green Finance Institute wants to hear from other councils investigating innovative ways to fund green projects and who wish to explore joining the Local Climate Bond campaign; information can be found at www.greenfinanceinstitute.co.uk/LCBs.