Thursday 1 July 2021

Rishi Sunak’s £15bn green bond bonanza

Rishi Sunak’s £15bn green bond bonanza

The Chancellor is expected to launch the issuance of the UK's first sovereign green bond later today. It is  described as a 'world-first' green savings bond, which he will reveal during his first Mansion House address.

At least £15 billion of green gilts are expected to be issued this financial year.

But how will the green savings bonds work?

The public will be able to invest between £100 and £100,000 and they will be guaranteed a fixed rate of interest for three years.

Once they invest, they will not be able to access their money until it reaches the end of its term.

The money invested in NS&I will be passed onto HM Treasury which will then allocate an amount equivalent to the proceeds raised from green saving bonds, to its chosen green projects within two years.

Zero-emissions buses, offshore wind and buildings decarbonisation schemes, will be among the projects that will benefit from the green bonds.

The social benefits of the projects are expected to be reported, to give investors insight into the number of jobs created and SMEs or households who have benefitted.

The Chancellor is also expected to announce a new Integrated Sustainability Disclosures Requirements scheme, which will require businesses to report the impact they are having on the environment.

The announcement is part of a commitment to make the UK the world’s most 'advanced and exciting' financial services hub 'for decades to come'.

Rishi Sunak is expected to say: "As the button passes to a new generation of leaders in finance, I feel optimistic about the future. Ambitious at home. Confident internationally.

"With a plan to make this country the world's most advanced and exciting financial services hub for decades to come, creating prosperity at home and projecting our values abroad."

Written by

Bruna Pinhoni

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