Sheffield climate bonds offer investment in greener future for city
A Sheffield climate bond will be launched next month to allow people to invest in city projects to tackle climate change.
The idea could raise up to £1 million, members of Sheffield City Council’s strategy and resources policy committee heard last week (November 12). Investors including individuals, community groups or local businesses could spend as little as £5 on the bonds, which would mature after five years.
A report to the committee said that the bonds are regulated to “offer a low-risk, low-return investment while providing significant social and environmental benefits, fostering community engagement and diversifying the council’s financing options”. Proceeds from the first bond issued will fund projects including potentially the installation of solar panels on city state-funded schools. Up to six bonds could be issued in total and the final one would last until the end of 2030.
The report said that other “pioneering UK councils” have collectively raised more than £18.4 million to invest in local climate projects. They include West Berkshire, Warrington, Blaenau Gwent, Bristol City Council and London boroughs including Islington and Hackney.
Emissions
The scheme aims to contribute to the council’s ambition for Sheffield to reach net zero emissions by 2030.
Coun Ben Miskell described the idea as a “really good success story”, enabling citizens to buy into a shared vision for climate action in the city.
Coun Douglas Johnson said: “I really welcome this and not before time.” He pointed out that it is five years since the council declared a climate emergency, adding: “This is really, really welcome and I’m glad we’re finally getting there.”
He stressed the need to increase public awareness of the scheme. Under the plans, the bonds will only be issued through the Abundance platform and the maximum raised for each issue would be £2 million.
Each loan would have a maximum term of five years and capital will either be repaid by regular instalments and/or as a lump sum on maturity. The funding could only be used for eligible green projects as defined by the green finance framework.
The projects to be put forward for funding would be those currently not being delivered through the council’s standard borrowing methods.