Purpose

S&R responded to the Council motion
(7/2/24) on Five Years Since Declaring A Climate
Emergency.  The response indicated that
 "Officers from Finance and the Sustainability and Climate
Change team will explore the practicalities of issuing green bonds
and will report back to the Strategy and Resources Committee with
their initial findings by September.

Content

13.1

The Executive Director City Futures and the
Director of Finance and Commercial Services submitted a joint
report responding to the motion that was passed at Full Council in
February 2024 asking Officers to explore Local Climate Bonds
(LCBs). The report outlines what LCBs are, their potential for
supporting citizen engagement and how they could contribute to
climate action in Sheffield.
 
The report stated that for a Local Climate Bond
to be issued, the Council’s Treasury Management Strategy
would have to be amended to enable the Council to raise funds from
the public. Members are recommended to support this alongside
signing a Local Climate Bond Pledge. Subject to this agreement,
Officers would  then develop a bond
proposal and seek full approval from Committee to launch a
‘Sheffield climate bond’ in
2025.

 

 

13.2

RESOLVED UNANIMOUSLY: That Strategy and
Resources Policy Committee:-

 

 

 

(a) agrees to
updating the Treasury Management Strategy to include Local Climate
Bonds, to enable the Council to raise funds from the
public;
 
(b) agrees to
sign the Green Finance Institute Local Climate Bond pledge;
and
 
(c) requests
that Officers develop a Local Climate Bond (LCB) issuance proposal,
including a Green Finance Framework and that Officers will seek
full approval from the Strategy and Resources Policy Committee to
launch a ‘Sheffield climate bond’ in
2025.

 

 

13.3

Reasons for Decision

 

 

13.3.1

Evaluation has
been undertaken to compare LCBs to other forms of borrowing and
this has demonstrated that under certain circumstances LCBs can be
more cost effective than typical borrowing methods, however the
real value of LCBs lies with the engagement opportunity with
communities.

 

 

13.3.2

Research has been conducted into other Councils who have
delivered successful LCBs, and learning from them has been valuable
in developing this proposal and allows for a more informed decision
to be made.

 

 

13.3.3

Engagement – LCBs offers communities an opportunity to
engage and participate in a wider approach whilst contributing to
climate solutions.

 

 

13.3.4

There has been growing demand from local community groups and
members of the public for the Council to issue an LCB. This report
responds to this demand by providing an overview to allow Members
to make an informed decision about how to
proceed.

 

 

13.4

Alternatives Considered and
Rejected

 

 

13.4.1

As outlined in section 3 of the report, the alternative option
is not to proceed issuing a climate bond, and to continue funding
projects through prudential borrowing methods. This option,
however, means missed opportunities for engaging with residents,
and building an open dialogue with communities about climate
action.