C40 Cities, the group of 96 cities around the world that represents one twelfth of the world's population, has put together a free guide to launching a green bank to fund a sustainable recovery from Covid-19.
A green bank is a public, semi-public or not-for-profit institution that offers a variety of financial products focusing specifically on climate mitigation projects, such as renewable energy and energy efficiency programmes.
‘Establishing a City Green Bank' is based on the experiences of major locally operating green banks and is a source of information for those looking to mainstream climate finance through a dedicated local fund or bank.
Curtis Probst, Co-chief executive of New York City Energy Efficiency Corporation (NYCEEC), co-authors of the guide, said: “Green banks have enormous potential to catalyse much-needed investment in clean energy infrastructure.
“They are becoming a critical part of the financial ecosystem that can deliver numerous benefits to communities throughout the world.”
With the world continuing to battle unprecedented public health, social and economic crises, C40 mayors and cities are working to guarantee a recovery that is sustainable, resilient and equitable.
That said, cities were already facing substantial challenges in accessing capital to deliver Paris Agreement-compliant action and must now overcome the additional strain Covid-19 has had on municipal budgets globally.
As such, directing stimulus funds towards the development of green banks would catalyse private sector investment in local low-carbon, climate-resilient (LCR) infrastructure, which C40 Cities said will help with promoting job creation, spurring the green economy, strengthening equity and inclusion, and delivering on the climate agenda.
The American Green Bank Consortium reports that, as of the end of 2019, every dollar of investment made by an American green bank resulted in $3.60 of total investment in a clean energy economy.
Claire Markgraf, head of financing sustainable cities initiative at C40 Cities, said: “City-level green banks have the potential to deliver low-cost investment through a self-sustaining mechanism, offering long-term environmental, social and economic benefits for people.”
LSE Grantham Research Institute, the climate change research group, has already recommended the creation of a UK National Investment Bank with an explicit sustainability mandate.
Polly Billington, director of UK100, a network of local leaders, a member of the report's advisory committee and also a Smart Transport member, said: "A Net Zero Development Bank is an idea whose time has come.
“Green investment will create thousands of jobs, tackle climate change and secure the recovery.
“This is a timely and well considered report which shows how we can fund the route to Net Zero with business and banks taking on a much bigger role in building back better.”