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London Mayor urged to find new funds for the capital

Wednesday 9 November 2022

LCCI’s Head of Policy and Public Impact, James Watkins, made the call whilst giving evidence today to the London Assembly’s Oversight Committee.

The Assembly is investigating the Mayor’s policy of green bonds. In February, Mr Khan announced proposals to secure over £500 million for investing in climate action by issuing green bonds as part of plans intended to accelerate London’s push to net-zero by 2030. Green bonds would finance London’s public services through raising funds for environmentally beneficial projects, however the financing models of these bonds has come into question due to market volatility. Subsequently, the Committee invited bond market experts to analyse the proposals and provide feedback while bond issuance is postponed.

James Watkins gave evidence to the Committee on alternative bond structures which have been successfully used to fund green projects across the world. Having previously backed bond financing for Transport for London, the Chamber has called for two additional bond structures to be considered by the Mayor – Policy Performance Bonds, which tie interest rates to successful policy outcomes, and Sukuks, which encourages long-term investment and collaboration between different investors through direct investment in outcomes.

Speaking before today’s evidence session, the Chamber’s Head of Policy and Public Impact, James Watkins, said:

“The Mayor is spot on in considering green bonds. We can do so much in London to lever in investment so that we meet net zero targets. Whilst world leaders meet in Sharm El Sheikh to decide how the global community can tackle climate change, it is right that the London Assembly chooses this moment to consider what more we can do in the capital to meet net zero. This must include considering additional bond structures to meet these ambitions. London is the world’s financial capital. Let us use this expertise to help safeguard our city – and our planet – for future generations”.

Read the Mayor’s full announcement about green bonds here.

ENDS