Green Bonds – Are they the future?
For those who know me, they’ll know that I’ve spent the last two years working to develop an innovative green bond proposition designed to help local authorities and social housing providers respond to current financial and service pressures by offering a new generation of funding for green retrofit and new housing.
So I read with great interest this week that Metropolitan Housing Trust looks set to become the first housing association since the July Budget to enter the public bond market after being assigned an AA- rating by Standard & Poor’s.
I think most local authority and social housing professionals would agree that the challenge facing local government has never been so acute. There is no public sector transformational funding solution – local authorities and housing associations can only do so much – and future funding has to come from new private sources.
The potential green bond market is $567bn in size and the scale of green bonds grew from $11bn in 2013 to $36.5bn in 2014. At the end of June this year some $65bn had been completed. The money is out there, persuading councils and housing associations to do it differently is the challenge. The case for a new intervention is powerful and we will keep pushing the approach.