Five UK councils commit to launching green bonds

Pictured: Eastbourne

The participating councils are Eastbourne District Council and Lewes District Council in East Sussex; Cotswold District Council in Gloucestershire; Islington Council in Greater London and Blaenau Gwent Council in Wales.

Each council will work with the GFI and the Institute’s partner for the campaign, Abundance Investment, to develop the bonds. They are also implored to consult with local residents and businesses to identify and prioritise which projects should be funded.

Abundance first trialled its green bonds for councils last year, with West Berkshire and Warrington councils both issuing a £1m bond. Unlike typical corporate green bonds or sovereign green gilts, the local bonds were open to investment from local people with a minimum requirement of a £5 investment.

West Berkshire and Warrington councils are using their bonds to finance solar projects, but the GFI and Abundance have emphasised that proceeds could be put towards other renewable energy schemes; electric vehicle (EV) infrastructure; habitat conservation and restoration and other initiatives which will help councils meet their net-zero goals.

According to BBC analysis, 121 of England’s 149 ‘top-tier’ councils have made a climate emergency declaration, with most of this cohort also targeting net-zero ahead of the national, legally binding deadline of 2050. But organisations including UK100, Green Alliance and the Government’s own National Audit Office (NAO) have warned that many local authorities need additional funding to walk the talk when it comes to their climate plans.

The GFI’s chief executive Dr Rhian-Mari Thomas said: “Many 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.”

Looking at the climate commitments of the participating councils, Eastbourne District Council is targeting a carbon-neutral town by 2030, while Lewes District Council has the same carbon reduction aim and is also targeting “full climate resilience” by the end of the decade. Cotswold District Council’s overarching ambition is net-zero carbon by 2045, without the use of offsetting. Islington Council is striving to deliver a net-zero borough by 2030.  Blaenau Gwent Council is aiming to become a carbon-neutral organisation this decade and is currently updating plans for reducing emissions across the region.

Abundance has estimated that up to £3bn could be leveraged if all UK councils launch green bonds using its framework.

The news comes shortly after the UK Government launched its first sovereign green gilts, with a £10bn package having raised funding on 21 September. A further £5bn is in the pipeline and Chancellor Rishi Sunak has stated that additional green gilts will be announced in the near future.

Sarah George