Green finance a ‘truly innovative’ way for councils to achieve net-zero goals
0Green finance is a ‘truly innovative’ way for councils to achieve their net zero targets due to cheaper borrowing rates and engagement with the community, according to the programme director at the Green Finance Institute.
Ryan Jude explained at the Housing151 conference that green finance is any investment that has a sustainable outcome attached to it.
He said: “If we want to achieve our net-zero targets then you also want to make the term green finance redundant, you need to make all finance, green finance.”
The Climate Change Committee estimated that £50bn of investment is needed each year to reach the UK’s net zero goals by 2030. This is compared to the current annual figure of £10bn.
An example of green finance is a Local Climate Bond (LCB), which is a crowdfunded piece of debt that the local authority issues to invest in green projects in its area.
Jude added: “It allows residents to invest from as little as £5, so they get to have that engagement [with the council] and, for the local authority, it means that more people see the work they are actually doing.”
West Berkshire Council was the first authority to implement an LCB 18 months ago with a £1m issuance, which it achieved in three months. The bond had a total of 640 investors and just under a quarter of the investment came from local people.
The investment was used to fund a variety of solar panel schemes and local tree planting projects as part of the council’s environmental strategy.
Joseph Holmes, executive director for resources at West Berkshire, said at the time the PWLB borrowing rate increased to 100 basis points, so by using an LCB the authority saved money.
He said: “Not only did we make a saving on borrowing costs, on the £1m investment we made about £15k saving. This is not going to solve the gap in the medium-term financial strategy but, at scale, it could make a decent dent into that.”
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