Bonds issued by our local authority to help fund environmental projects could speed up action on climate change and also offer a low-risk ethical investment to savers, says Julia Waterlow.
West Berkshire Council recently made history when it launched a green bond allowing local residents to invest in a local renewable energy project.
Green bonds for a further five local authorities are expected to be rolled out in coming months. So is this something Lewes District or East Sussex County Council should be considering?
How green bonds work
Green bonds, more technically known as community municipal investments (CMIs), can be bought by savers and investors, with the funds raised being used for specific community projects. In the case of the West Berkshire issue, investments start at as little as £5.
Bonds typically pay a fixed rate of interest each year for a fixed period of time, at the end of which investors receive back their original capital (or capital may be repaid gradually over the term).
CMIs are seen as fairly low risk because they are backed by a local authority. Consequently the interest rate offered can be lower than for riskier investments. But they could be a win-win if you want to invest ethically. Plus, as a local resident you may get a say in how the money raised will be spent.
You can find out more about CMIs as an investment here.
Encouraging action in Lewes
In my view, this could be one of the most exciting opportunities to fund projects to make our local area more environmentally and economically resilient and reduce its carbon impact. I am told Lewes District Council is looking at the idea. But if a number of us were to write to LDC, they may be encouraged to take concrete action.
If you’re interested in adding your name to a letter to Lewes District Council, please comment below or email us at firstname.lastname@example.org.