Unlocking Climate Capital: A Business Case Framework for Local Authority Net Zero Projects

Achieving Net Zero requires significant investment in capital-intensive programmes, yet local authorities often face limited resources and fragmented guidance when deciding how to finance them.

The “Unlocking Climate Capital: A Business Case Framework for Local Authority Net Zero Projects” insight, commissioned by Innovate UK from City Science, introduces the Net Zero Finance Options Framework, developed to support local authorities in navigating these complexities and making well-informed investment decisions by offering a structured preparation procedure for the Green Book option process. Moreover, the insight also highlights key financial metrics and appraisal techniques that improve transparency and comparability.

Drawing from established tools and principles such as Multi-Criteria Decision Analysis, Whole System Finance and HM Treasury’s Green Book, the Net Zero Finance Options framework is tailored specifically to the challenges of Net Zero programme delivery.

By guiding local authorities through five structured steps – from defining their role to finally arriving at the Green Book’s option process – the framework helps clarify decision making, prioritise limited resources, and ultimately maximise value.

Through this process, the framework strengthens a local authority’s capability to appraise investment options, reduces financial risk, and builds confidence among stakeholders. This insight also offers practical guidance, workshop structures and recommended tools for applying the framework across Net Zero initiatives.

Key findings

Adopting the Net Zero Finance Options Framework can help local authorities:

• Maximise value for money by improving cost efficiency
• Improve resilience by reducing funding risks
• Enhance decision-making by improving understanding of finance options
• Build stakeholder confidence and trust through clearer appraisal processes