The UK’s green investment is set to increase as £3 billion could become
available through climate bonds.

Financial services company, Green Finance Institute (GFI), announced on the 1st of November (2023) the launch of their ‘Local Climate Bonds Toolkit’. The purpose of this toolkit is to help local authorities create and develop green bonds for their local area. The toolkit has many similarities to the UK Government’s previous funding that provided £16 billion in 2021.

This £16 billion green investment was used to fund sustainable projects including offshore wind projects, zero emissions, and projects that involved decarbonising buildings, including commercial and domestic properties.

Through this year’s (2023) funding, the Local Climate Bonds can be increased by local councils and authorities. This green investment can then be used to fund initiatives that will ultimately lower emissions. This can occur within a number of sectors, such as the transport, energy, infrastructure, and building sectors. This funding is also available to anyone, from individuals, homeowners, businesses, and organisations.

This money can then be used to fund initiatives that will ultimately lower emissions.

There are currently eight councils that have issued these climate bonds, including Camden, Cotswold District, Islington, Lewisham, Telford and Wrekin, Warrington, West Berkshire and Westminster. In 2020, both Warrington and West Berkshire invested £1 million each in climate bonds.

Since then, these eight councils have raised around £6.4 million. This green investment has then been used to fund several sustainable projects including:

Green Investment
  • Infrastructure for electric vehicle (EV) charging
  • Improving the energy efficiency of buildings, both commercial and domestic properties
  • Increasing the use of renewable energy
  • Restoring nature

Miles Ashton, the Green Finance Institute’s Local Green Investments Lead, states that:

“Local Climate Bonds have enabled eight pioneering councils to
raise millions for green projects, while engaging with
and empowering local residents..”

This green investment has the potential to reach £3 billion according to the Green Finance Institute (GFI). This investment will allow communities to take advantage of sustainable opportunities they could not previously access due to the lack of funds. For this to take place more local councils and authorities need to start developing climate bonds.

The GFI hope that their toolkit will help local councils throughout the UK to increase their green investments through climate bonds. Ashton also states that:

“This toolkit aims to make the issuance process easier to
understand for councils exploring a Local Climate Bond.”

Christopher Hammond, the Chief Executive of UK100, an organisation made up of local electives that work towards reducing and preventing the impacts of climate change, has claimed that local authorities are in need of guidance and claims that local authorities are:

“facing increasingly stretched budgets…
[and] need innovative finance to deliver climate action”.

Therefore, he states that the release of the GFIs toolkit could not have come at a better time, as it is crucial that local councils and authorities receive the guidance they need to be more sustainable and increase their green investment.

As well as increasing the work local authorities are doing to be sustainable, this increase in green investment could also help the UK as a whole. As the UK Government works towards its legally binding pledge to reach net zero by 2050, an increase in green investment would help to bolster the effort.

Research carried out by the UK Government shows that 82% of our emissions can be influenced by the actions of our local councils and authorities. Therefore, green investments can make a huge difference to the UK’s target of net zero. Currently, 75% of our local councils have, since 2019, begun to add sustainability and climate change mitigation into their future plans.

Renewable energy reduces CO2 emissions

Therefore, with this figure in mind, the Green Finance Institute believe that this toolkit is necessary to help councils looking to start the process of issuing climate bonds through green investment.