£1m crowd funder to tackle climate emergency to launch in Islington
- Credit: Emma Bartholomew
A crowdfunder is launching to raise £1million to tackle the climate emergency in Islington.
The first of its type in London, the Community Municipal Investment (CMI) sees local authorities issuing a bond through a crowdfunding platform, calling on residents to support low-carbon projects which directly benefit their own community.
Islington's CMI will be launched in partnership with ethical crowdfunding platform Abundance Investment, once rubber stamped by councillors on Thursday (October 14).
The council has not yet revealed what return investors can hope to achieve through the Innovative Finance ISA (Ifisa), but they will be able to choose which project to invest in from £5. Interest is paid twice a year and money is returned after five years.
Projects on the table include the installation of electric vehicle charging points, improving recycling facilities, working towards zero carbon recycling and waste collection, and installing LED lighting and solar panels on public buildings to reduce carbon and the cost of electricity.
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Funds could also be channelled into the council’s School Streets programme.
Since launching in 2012 to "help generate something good for the environment and society as well as bank-beating returns", more than 7,300 people have invested £118m via the Abundance platform.
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An Ifisa, or peer-to-peer loan, usually offers a higher rate of interest than a traditional savings account, because banks are bypassed.
But this has meant that people's money has been at risk in the past, and after several platforms collapsed the FCA imposed stricter rules in 2019 because investors were not protected by the Financial Services Compensation Scheme.
Abundance, however, is the world’s first Financial Conduct Authority regulated investment-based crowdfunding company.
Nevertheless, it warns on its website: "If the company or local authority you have lent money to runs into difficulties, it may not be able to pay your returns and you may not get back all or any of your original investment."
Co-founder and joint managing director, Karl Harder, said: “Our municipal investments were designed to bring together communities that want to take action on the issues that matter to them."