Islington is the first London council to launch a green fund so residents can invest in helping it meet its targets to tackle the climate emergency.
The move comes at the start of the global climate emergency conference in Glasgow and at the end of Islington’s two-week Islington Together environment festival.
The borough is one of six in London most at risk of the effects of climate change such as flooding and high temperatures.
The Islington Greener Futures Fund aims to raise £1m to combat these risks.
The five-year community municipal investment (CMI) fund means people can invest from £5 to a maximum of £20,000 for a fixed 1.55 per cent return tax free over the next five years.
The scheme is run by Abundance Investment and is the first one in the country eligible for the Innovative Finance ISA.
Islington has an ambitious target to become a net zero carbon borough by 2030 and announced a climate emergency in 2019.
Investors will get interest every six months and their original investment will be paid back after five years.
The scheme is also open to non-residents and closes to investors on 31 December this year.
The Town Hall plans to use the money for projects to improve air quality, such as its school streets scheme, reaching zero carbon recycling targets, and putting in electric vehicle charging points.
The money could also go towards better recycling facilities and putting in LED lights and solar panels on public buildings to reduce carbon and electricity bills.
Cllr Rowena Champion, who has responsibility for environment and transport, said: “The climate emergency and the health inequalities that arise from it are two of the greatest threats to present and future generations – we must take action now to address this. ”
She added: “Islington Greener Futures will give people across our borough the opportunity to invest as little as £5 in projects that will make a real, tangible difference and help create a more environmentally-friendly Islington for present and future generations.
“We look forward to seeing local people enjoying the environmental and financial benefits that Islington Greener Futures can bring to the borough.”
West Berkshire council last year became the first UK council to launch such a scheme. Under a quarter of the 640 investors were local. The council raised £1m within months of the launch and this year 106 investors donated their returns to a wildflower verge project.
Warrington Borough council in Cheshire also launched a fund in 2020 to raise £1m for a new solar farm near Cirencester in Gloucestershire.
Camden Council is planning to reveal details of its own scheme next year.
Details of Islington’s Greener Futures Fund can be found here.