For CFOs and Section 151 officers, the path to net zero is not just about emissions. It’s a powerful lever to improve financial resilience, protect against price volatility, and build long-term public value if done strategically.
Across the UK, local authorities are facing a financial squeeze. Rising energy costs, inflationary pressures, and growing service demand are forcing finance teams to make difficult decisions about what to fund and what to cut. In this context, it is easy to view climate investment as a cost centre, yet doing so risks missing a fiscal opportunity available to the public sector today.
Net zero, when approached as an investment strategy rather than a compliance burden, can strengthen the public balance sheet. Carefully targeted climate measures can reduce long-term liabilities, build durable assets, and protect councils from economic shocks. They offer hedge value, operational savings, and in some cases new revenue streams.
Climate Measures That Have a Positive Impact on the Balance Sheet
Much of what sits under a local authority’s decarbonisation strategy aligns with long-standing principles of sound asset management and investment. For example, installing solar panels adds generation capacity to the council estate, locking in future energy cost avoidance. Shifting fleet procurement towards electric vehicles cuts exposure to fuel price swings and future regulatory costs, while modernising core infrastructure like streetlighting brings both energy savings and resilience.
While these interventions are often driven by environmental policy, their fiscal impacts are concrete: Energy efficiency, on-site generation contributing to energy security, and zero-carbon transport all reduce operational expenditure. When planned effectively, the financial returns are comparable to other long-term municipal investments.
Building Long-Term Public Value
Strategic climate investment also enables councils to reshape the long-term value of their estate. In a year where the UN Secretary General confirmed the world has missed the 1.5°C climate goal, it is clear that councils must act not just to reduce emissions, but to build resilience into their financial and physical infrastructure.
Energy performance improvements, low-carbon heating systems, and decentralised energy infrastructure are not one-off expenses – they can be income-generating, value-preserving assets. These measures contribute to the council’s asset base, enhance property value, and in some cases enable direct revenue generation through power purchase agreements, grid services, or lease arrangements.
In parallel, these assets help decouple local authorities from future volatility. Energy prices over the past years have illustrated how exposed councils are to global markets. Those with more resilient estates, cleaner vehicles, and greater control over energy consumption have fared better, not just environmentally, but fiscally. Net zero investment can act as a local insurance policy against national and global instability.
Managing the Risk of Debt-Funded Projects
Of course, not every climate measure is self-funding in the short term. Some require significant upfront capital, particularly retrofit schemes or infrastructure transformation. In a high interest-rate environment, borrowing must be evaluated carefully.
Projects that deliver returns over 15-30 years may stretch beyond the electoral or budgetary cycle. Savings assumptions depend on delivery quality and usage behaviour. Some benefits, such as reduced risk or improved compliance, are not easily monetised. These challenges mean that Section 151 officers and their finance teams must treat decarbonisation like any other capital investment – with rigorous appraisals, sensitivity analysis, and careful delivery oversight.
However, risk should not be a reason to delay action; it should be a reason to act strategically. Councils that structure investments clearly, prioritise high-return interventions, and monitor outcomes closely are better positioned to manage costs and demonstrate value.
How City Science Can Support You
City Science works with local authorities across the UK to connect carbon strategies with fiscal outcomes. We can help you with economic appraisals and sensitivity analysis, supporting you in making strategic decisions.
Moreover, we help you understand whether observed emissions reductions reflect genuine decarbonisation or simply changes in methodology. Through tools like our acclaimed platform CarbonTrack, we help you see where emissions are concentrated, how they align with operating costs, and where investments will have the biggest impact, both environmentally and financially.
Take Action Today
To find out how City Science and CarbonTrack can support you, get in touch for a demo or discovery session at info@cityscience.com.