Investors Pour £16M into Net-Zero Initiatives via Local Climate Bond Market

The Green Finance Institute (GFI) has boldly moved, committing £16 million to scale up Local Climate Bonds and fast-track net-zero projects across the UK. This strategic investment from two private backers — Esmée Fairbairn Foundation and Unity Trust Bank — showcases a decisive vote of confidence in municipal investing. The aim? To build strong local returns while advancing sustainable investment at the grassroots level. Ultimately, this funding will support citizen-driven financing for net-zero initiatives nationwide.

Born out of collaboration between Abundance Investment and the GFI, the municipal investment model provides local authorities with a unique opportunity to raise capital from both citizens and private investors, giving communities a direct stake in their regions' environmental future. With this model, municipalities can tap into direct funding to complement their capital projects, pushing local sustainability efforts forward with collective support.

Unity Trust Bank has set the ball rolling, pledging an initial £15 million, which will be co-invested with private partners. These funds aim to invigorate the local green market, helping local governments meet climate improvement goals. Additionally, Esmée Fairbairn Foundation has committed an extra £1 million over the next two years to match residents’ contributions to green investments made by local authorities.

Today, the first step in this journey has been taken: £165,000 allocated to three local authority projects in Bristol, Hackney, and Hammersmith & Fulham. These investments will expand green infrastructure, including rain gardens and energy-efficient upgrades for schools. Greening efforts for community buildings are also on the cards, setting the stage for more climate-conscious, community-driven initiatives.

Miles Ashton, Associate Director, Local Green Investment at the Green Finance Institute, stated: “The Green Finance Institute is proud to have championed this approach to investing in councils, providing leadership in developing innovative financial solutions that meet the urgent funding needs of local authorities while engaging communities directly in the transition to net-zero.

“Now with 14 pioneering local authorities taking the lead, £11.5m in private capital from over 2,750 investors has been mobilised for much-needed local environmental and social impact projects. The success of Abundance’s platform in mobilising citizen investment demonstrates the strength and scalability of the model, and it’s incredibly exciting to be in a position now where we are not only supporting local authorities but originating deals with institutional investors and foundations to accelerate the growth of this market.”