Structuring a new type of UK sovereign bond to help finance the move to net zero

Our work with policymakers, the UK financial services sector, academia and other organisations fed into the government’s design of the UK’s inaugural green gilt, which has raised over £16 billion since autumn 2021.

A new kind of bond

In 2020, we worked with the Green Finance Institute and the Grantham Research Institute at the London School of Economics and Political Science (LSE) to propose a structure for a new type of sovereign bond that could deliver climate action and social benefits and scale up the UK’s drive to a net zero carbon economy.

Interest in the proposal was overwhelming, attracting support from more than 40 asset owners and investors, representing assets of more than £10 trillion. Following this success, we were appointed as Secretariat to the UK Treasury and Debt Management Office’s Stakeholder Discussion Forum on green finance.  

After extensive engagement with policymakers and ministers, our proposal was used in the UK government’s design of their inaugural green gilt, featuring an innovative commitment to report on social co-benefits. First issued in September 2021, the green gilt has attracted over £16 billion in investment.

In June 2022, the inaugural green gilt was honoured by the Climate Bonds Initiative, winning its ‘Largest Green Sovereign Bond’ and ‘Sovereign Green Market Pioneer’ awards.  

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