Councils ‘must invest to combat climate change’

7 Nov 19

Panellists at CIPFA’s treasury and capital management conference agreed councils declaring climate emergencies need to back up this sentiment through investment strategies.

Social impact investments, which create commercial financial returns and improve social outcomes, must be used to mitigate against the effects of the climate crisis, said Danny Mather, head of financial and business planning at Warrington Borough Council.

Andy Hinds of brokerage firm RP Martin told delegates yesterday that as climate change has risen up the political agenda councils “are going to have to do something” to address it.

He noted that two thirds of councils in the UK have now declared climate emergencies and now they must develop plans that reflect this.

But Mather told the conference: “Most councils are passing climate resolutions and don’t understand the meaning of them”.

His comments follow warnings from lawyers that councils that fail to include carbon reduction targets in their local plans risk legal action.

Mather, whose council recently launched a £75m social impact investment fund, called on more councils should do the same.

Warrington’s fund will invest in areas such as solar and wind energy projects and special needs schools.

Mather said: “Councils are facing sever social problems at the moment around areas like homelessness and social impact investment can diminish that.”

He suggested that the biggest barrier to moving towards social impact investment was “tradition”, as this kind on investment is relatively new.

But Euan Maclaren chief executive of investment firm Mulberry Green Capital said: “The climate is in real danger and as a generation we have an opportunity to make a difference.”

Maclaren noted that over the next decade roughly £920bn will be divested from fossil fuels globally with around £650bn being invested into renewable energy sources.  

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