Local Climate Bonds have the potential to raise millions of pounds for green projects in the UK. They are finance products launched by councils to access cost-effective local funding for specific decarbonisation projects.
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Local Climate Bonds have the potential to raise millions of pounds for green projects in the UK. They are finance products launched by councils to access cost-effective funding for specific decarbonisation projects, offering local people an opportunity to invest in their area in a way similar to crowdfunding and to make a return from doing so.
What are Local Climate Bonds (LCBs)?
- Pioneered as Community Municipal Investments by Abundance Investment in 2020, they are regulated debt instruments issued by local authorities to raise money directly from the public.
- They create a powerful model for councils to engage with citizens as investors, with anybody able to invest £5 or more via a crowdfunding platform accessible to ordinary investors.
Why would a local authority decide to issue one?
- LCBs allow local authorities to create interactions with their local community while diversifying their sources of funding and help meet their Net Zero targets.
- Local investors may decide to donate all or part of their interest payments back to the council to finance specific projects, making the solution even more cost effective.
What types of projects have been developed with the funds raised through LCBs?
- With the LCB Pledge, local authorities aim to raise funding for specific local Net Zero projects, committing to set and share publicly their target dates for completion, and to provide public updates on their measurable positive impacts.
- This means that LCBs need to be deployed in funding councils’ Climate Emergency and Net Zero Plans, for example through the installation of solar panels on council facilities, the development of EV charging points, or urban tree planting.
Committed Councils
- Warrington – In Warrington, the funding by the 527 investors was put towards the development of a 20MW ground mounted solar system with the addition of 40MW of battery storage. See here for the relevant press release from the council on the issuance.
- Telford & Wrekin – In Telford & Wrekin, funds are going to help fund its Climate Change Fund and implement energy efficiency upgrades to its temporary and supported housing accommodation, and the electrification of its community minibus fleet. See here for the relevant press release from the council on the issuance.
- Cotswold – In Cotswold, the investment will focus on helping residents go green with public EV charging points, and upgrades to buildings to reduce the council’s own emissions. See here for the relevant press release from the council on the issuance.
- West Berkshire – In West Berkshire, the £1m raised from 643 investors was used to build Solar PV roof-based projects on council facilities and other such as urban tree planting, wildlife improvement, travel infrastructure etc. See here for the relevant press release from the council on the issuance.
- Blaenau Gwent – In September 2021, Blaenau Gwent signed the LCB pledge committing to issuing a bond or related municipal investment in the 18 months following COP26.
- Camden – In Camden, the investment made by 398 citizens will help fund more public electric vehicle charging points, as well as support the continuing roll out of the “Healthy School Streets” programme and replacing Camden’s fleet with green alternatives. See here for the relevant press release from the council on the issuance.
- Islington – In Islington, 661 investors contributed to the council’s ongoing efforts to improve air quality and EV charging points and other EE solutions on public buildings. See here for the relevant press release from the council on the issuance.
- London Borough of Hackney – See here for the relevant press release from the council on the issuance.
- Hammersmith & Fulham Council – Hammersmith & Fulham closed their first LCB issuance on 7 February 2024 and are now the first council to issue a second LCB. See here for the relevant press release from the council on the issuance.
- Lewisham Council – Following the signing of the LCB pledge in November 2022, Lewisham Council issued a Local Climate Bond in March 2023. See here for the relevant press release from the council on the issuance.
- Westminster City Council – Following its signing of the LCB pledge in July 2022, Westminster City Council issued its Local Climate Bond in March 2023. See here for the relevant press release from the council on the issuance.
- Southwark Council – Following signing the LCB Pledge, Southwark Council issued a Local Climate Bond in February 2024.
- Lewes – In September 2021, Lewes signed the LCB pledge committing to issuing a bond or related municipal investment in the 18 months following COP26.
- Eastbourne – In September 2021, Eastbourne signed the LCB pledge committing to issuing a bond or related municipal investment in the 18 months following COP26.
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