Green & Social Finance Framework

A framework for councils borrowing money through Abundance, to ensure compliance with the Green and Social Loan Principles

Version 1.1  |  23 January 2026

Introduction

This Green & Social Finance Framework (“GSFF”, “Framework”) has been created by Abundance Investment in partnership with the councils raising funding through Abundance.

It covers council green and social investments issued by Councils through the Abundance platform, in the form of bonds and P2P Loan Agreements, to fund Eligible Projects. These investments are referred to as council investments or Municipal Investments.

The Framework provides the overarching criteria, guidelines and processes in place to ensure the investments are in compliance with the Green Loan Principles (“GLP”) and/or Social Loan Principles (“SLP”). The Principles referenced within this Framework are voluntary process guidelines, and are globally accepted as the standard guidelines for issuing and managing green or social investments of this type. They also follow the principles underpinning the UK Government‘s Green Gilt and green N&SI saving bond products.

Abundance has developed the framework in line with the following market standards:

  • International Capital Market Association (ICMA) 2021 Green Bond Principles (GBP1) and;
  • Loan Market Association (LMA) 2020 Green Loan Principles (GLP2), or as these principles may be subsequently amended.

To be compliant with the Green Loan Principles and Social Loan Principles, the investment must be issued under a framework that covers the four components of the Principles:

  • Use of Funds: Only use the money raised for Eligible Projects
  • Process of evaluation and selection: Have a process for selecting the projects the money will go towards and making sure they meet the criteria of an Eligible Project
  • Management of proceeds: Account for how the money has been spent and allocated to each project
  • Reporting: Transparently report to investors and the wider public how the money has been spent

This framework may be updated from time to time to ensure continued alignment with market best practices and emerging standards.

Responsibilities

This framework has been prepared by Abundance with the support of industry experts.

Abundance asks all councils that issue investments on Abundance to do so under this framework, such that the investments are in compliance with the Green Loan Principles and Social Loan Principles.

The Council is responsible for ensuring compliance with this framework throughout the life of each investment using the processes outlined below.

Abundance Investment will provide assurance that the Council is adhering to the Framework and that each investment is in compliance with the Green Loan Principles and/or Social Loan Principles. This includes verifying that the funds raised are used for projects that meet the criteria of Eligible Projects, using the processes outlined below.

It is the Council’s responsibility to maintain a record of all borrowing and how the funds are allocated to Eligible Projects. Abundance supports the Council through its online platform to provide that information to investors.

Use of Funds

The Use of Funds for each Municipal investment is defined in the legal documentation and must go towards either the funding or refinancing of Eligible Projects. The council can deduct the costs of raising money through a Municipal Investment from the amount that must be allocated to Eligible Projects.

The money raised can be used to fund a new Eligible Project, or used to refinance existing debt that was used to support an existing Eligible Project. If the Use of Funds is for refinance, it can only be for Eligible Projects delivered 12 months prior to the Municipal Investment opening for investment.

Where eligible projects and assets are jointly funded between the Council and another party (e.g. Central Government), funding will be applied only to the Council’s share of the eligible project.

Types of municipal investment

Community Municipal Investments will be accredited based on the type of Eligible Project they fund

Green loan

funding Eligible Green Projects

Social loan

funding Eligible Social Projects

Sustainable loan

funding both Eligible Green and Eligible Social Projects

Eligible Projects

Under this Framework there are six categories of Eligible Green Projects and six categories of Eligible Social Projects.

Eligible Green Projects

The Eligible Green Projects are derived from the categories laid out in the ICMA Green Bond Principles, but for consistency follow the framework established by the UK Government for the country’s Green Gilt and Green N&SI savings product scheme.

  • Schemes generating energy from renewable sources such as wind, solar, geothermal, hydropower and bioenergy and only second generation biofuels are used (provided environmental and social impact assessments are undertaken and no significant controversies are identified).
  • Energy storage facilities
  • Schemes for renewable heat such as district heating and heat pumps where energy is derived from renewable sources
  • Schemes that reduce the energy use (heat and electricity) and therefore the carbon intensity of buildings used by the Council or buildings owned by the Council but rented out for social housing or commercial purposes.
  • Schemes that support or provide services to the private residential or commercial market to encourage or implement energy efficiency measures.
  • Schemes that utilise energy more effectively to generate heat or utilise waste heat.
  • Schemes that support low and zero emission mobility, including EV charging infrastructure, EV fleet conversion, cycle way improvement, car reduction schemes and other schemes that encourage cleaner transportation.
  • Schemes that support waste prevention, waste reduction, waste recycling and energy/emission-efficient waste to energy
  • Reduction of air and water emissions and greenhouse gas control
  • Schemes that support the circular economy
  • Schemes that deliver flood protection, resilience and other risk mitigation programmes
  • Schemes that deliver heat protection, resilience and other risk mitigation programmes
  • Engineering activities and technical consultancy dedicated to adaptation to climate change
  • Schemes that protect and enhance terrestrial and marine biodiversity, ecosystems and natural capital
  • Schemes that support sustainable land use and protection, including environmentally sustainable agriculture
  • Schemes that support environmentally sustainable clean water, water storage and wastewater management initiatives
  • Funding for environmental activities of third sector partners.

Eligible Social Projects

The Eligible Social Projects are derived from the categories laid out in the ICMA Social Bond Principles.

  • Building renovation, equipment and facilities for the sites
  • Building renovation, equipment and facilities for the sites
  • Development of public spaces including parks as well as enhancing footpaths and roads
  • Schemes to regenerate areas or communities designed to boost economic activity, provide jobs and enhance community wellbeing
  • Development of social housing
  • Improvements to councils' internal systems designed to increase efficiency and free up money for front line services

Process for evaluation and selection

For new and existing Municipal Investments, the Council will manage the selection process for Eligible Projects by applying professional judgement, discretion, sustainability knowledge and by considering the following objectives, features and benefits:

  • Conformance with the relevant principles
  • Conformance with the eligible criteria set
  • Alignment with relevant council strategies
  • Delivery of Just Transition (see below)
  • Broader environmental and/or social risks associated with the project

The resultant list of eligible assets and their budgets will be reported by the Council to Abundance as the funds from the CMI are deployed on those projects.

Abundance will validate that the Use of Funds for each Municipal Investment only includes Eligible Projects. In cases where Abundance and the Council do not agree on the classification of a project as green or social, a third party opinion may be sought.

Just Transition

A Just Transition seeks to ensure that the substantial benefits of a green economy transition are shared widely, while also supporting those who stand to lose economically – be they, industries, communities, workers or consumers.

A rapid increase in the speed and scale of actions required to reduce the risks of climate change will create new economic opportunities, but at the same time it may move economic activity away from damaging industries and can carry costs for consumers.

Where a Council has a Just Transition plan, the Council will aim to identify where the challenges will occur and plan the transition, so it minimises the costs to more vulnerable sections of the community. Councils will communicate mitigants that they have put in place, where applicable, when delivering Eligible Green Projects to support a just transition.

Management of proceeds

Tracking of use of funds

The Council tracks the receipt and use of funds via its internal reporting systems, ensuring Eligible Projects (re)financed are appropriately identified.

In addition, to ensure appropriate earmarking for the purpose of internal monitoring and external reporting of proceeds, the Council will establish a register that contains details (including value) of all Eligible Projects (re)financed by Municipal Investments.

The Council will service its debt obligations under Municipal Investments out of general cashflows and not specifically from revenues generated by eligible projects alone.

Unallocated funds

Once the funds raised through a CMI are drawn down by the Council, the money may initially be unallocated if the Eligible Project(s) expected to be funded has not yet commenced;

In this circumstance, the unallocated funds shall be:

  • held in temporary investment instruments that are cash, or cash equivalent instruments, within a treasury function; or
  • held in temporary investment instruments that do not include greenhouse gas intensive projects which are inconsistent with the delivery of a low carbon and climate resilient economy; or
  • applied to temporarily reduce indebtedness of a revolving nature before being redrawn for investments or disbursements to eligible assets.

The Council commits to using the funds towards Eligible Projects within 24 months of the issuance of the CMI. During this 24 months, the Council will disclose the unallocated amount of funds and no contractual right of review or repayment will arise, and no loss of green or social classification will occur.

If the unallocated funds have not been allocated to an Eligible Project after 24 months, the council will make a statement to investors setting out their plans for the money, which may include an early repayment.

Sale of asset

If an asset related to an Eligible Project that was funded by a Municipal Investment is sold by the Council, the Council must allocate the proceeds of the sale within 24 months to a new Eligible Project and disclose this in its reporting. If the council is unable to allocate the proceeds to another Eligible Project within 24 months, the council will make a statement to investors setting out their plans for the money, which may include an early repayment.

Reporting

For each Municipal Investment, a Council will publish information on the Use of Funds, including details of the Eligible Projects (re)financed by the Municipal Investment and amount of money spent on each project.

The information will be published as follows:

  • The Council will provide the information to Abundance and Abundance will provide the information through its platform. The information will be made available to investors in the Municipal Investment and the general public.
  • Optionally, the Council may publish the same information on the Council’s own website, or a link provided to the Abundance website on the Council’s website.

Assurance

Abundance is committed to pursuing the highest standards of integrity relating to our council green and social investments.

By providing an independent and third party check, Abundance provides assurance that Community Municipal Investments are being delivered in line with this Framework and the Green Loan Principles and Social Loan Principles, and the money is going towards Eligible Projects.

Abundance conducts the following reviews as part of its assurance programme:

  • When a Council reports the Use of Funds for a CMI, Abundance reviews the projects selected by the Council to ensure they meet the criteria of Eligible Projects. Where the green or social credentials of a project are not clear, Abundance may recommend the recruitment of a technical expert to provide an expert opinion on the qualification of a project.
  • Abundance confirms that the proceeds of a CMI are fully deployed on Eligible Projects and there are no unallocated funds remaining within 24 months of the issuance of a Municipal Investment.
  • Abundance carries out a spot check from time to time to ensure the information provided by the Council on the Use of Funds is accurate and confirm that the Council has the internal systems and controls in place to ensure ongoing compliance with the Framework.