Invest in your local council to help tackle climate change

A new nationwide scheme has been launched to help tackle climate change by encouraging residents to invest in their local councils.

The programme, which is based on research by the University of Leeds, aims to provide residents with a low-risk investment with the money then being used to fund environmentally-friendly projects.

The bonds, known as Community Municipal Investments (CMI), have been developed with ethical investment platform Abundance.

The investment offers a low-risk return of 1.2% per year over five-years and uses an annuity structure to repay the capital in instalments over the lifetime of the bond.

According to researchers at the University of Leeds, if all local authorities use these bonds it could unlock up to £3bn for councils to then use to finance initiatives that neutralise or eliminate carbon emissions.

The first of six pilot projects will begin with West Berkshire Council who are launching a green bond to raise £1m to fund solar panel installations on five council-owned buildings.

Dr Mark Davis, associate professor at Leeds’ School of Sociology and Social Policy said: ‘We know that local authorities are on the frontline of some of the biggest social and environmental challenges our communities face.

‘Despite this, they have lost around 60% of central funding since 2010, have had their usual borrowing channels impacted by rate changes and now have to contend with the COVID-19 pandemic.

‘The CMI we created in our research with Abundance is helping to finance local projects that help to tackle the climate emergency and related social crises.

‘And as interest rates for savers are cut to almost zero, the CMI should offer a better long-term return for people. It’s exciting to see our research having such a tangible impact.’

Cllr Ross Mackinnon, West Berkshire’s executive member for finance and economic development, added: ‘We are very excited to be the first council to offer CMIs to our residents and community groups.

‘Communities investing directly with us will provide us with a cheaper alternative to conventional sources of funds reducing the overall cost of borrowing to all taxpayers across the district as well as making a positive contribution toward our target to be carbon neutral by 2030.’

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