Green Finance Institute set to unlock £3bn opportunity for local green investment

The London based Green Finance Institute (GFI) has published its Local Climate Bonds (LCB) Toolkit to support local authorities seeking to unlock a potential £3bn in green community municipal investment opportunities which will help deliver their net zero mission.

Local Climate Bonds, a type of community municipal investment, enable local authorities to raise capital to fund decarbonisation projects in their communities such as wind farms, solar panels, rewilding, retrofit of schools, and electric vehicle charging points.

LCBs were first piloted by West Berkshire and Warrington councils which raised £1m each in 2020 and have the potential to raise billions for councils looking to invest in their green infrastructure.

LCBs are open to anybody to invest from as little as £5 via a crowdfunding platform hosted by Abundance Investment. Almost 2,000 investors have participated in LCBs so far, receiving a return on their capital for supporting climate action, while the local authority can engage their local community on their net-zero transition.

The GFI has published this Toolkit to provide local authorities with a succinct source of information on Local Climate Bonds, outlining the optimal issuance process and tackling common misconceptions about LCBs. It features case studies from West Berkshire (the first council to issue an LCB) and Westminster City (the fastest raise by an LCB).

Following the pilots in West Berkshire and Warrington, the GFI and Abundance Investment launched the Local Climate Bond campaign in July 2021, supported by UK100, Innovate UK, and Local Partnerships.

Research by Abundance Investment and the University of Leeds has calculated that LCBs could raise as much as £3bn if issued by the 343 councils in England.

According to the UK government’s own Net Zero Strategy, 82 per cent of all UK greenhouse gas emissions are within the scope of influence of local authorities, and since 2019, over 320 councils in the UK have declared a climate emergency, many working with their residents to shape plans of action, but access to diverse sources of funding is still a ‘barrier to action’.

Miles Ashton, Local Green Investment Lead, GFI, commented: “Local authorities will be vital to the UK reaching its net zero target. Over 75 per cent of local authorities have declared a climate emergency and have ambitious targets to reach net zero before 2050.

“Local Climate Bonds have enabled eight pioneering councils to raise millions for green projects, while engaging with and empowering local residents. This toolkit aims to make the issuance process easier to understand for councils exploring a Local Climate Bond.”

By Matthew Neville – Senior Correspondent, Bdaily

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