Sustainability is not just about the environment. If approached proactively, the green agenda can offer a real boost to local businesses, jobs and supply chains, and make local areas more economically and socially sustainable too.

The global market for low-emission goods and services is expected to be worth £4tr by 2015, and councils should be doing all they can to capture the benefits of that for their local economies.

Initiatives to reduce carbon emissions and conserve energy are now prevalent in almost every council in the land, but they need to be more closely aligned with economic development activities. This includes attracting investment and supporting local businesses to take part in the green economy, as well as ensuring the right skills are in place and public procurement underpins local labour and supply chains.

The few glimmers of hope on the current public funding horizon seem to be green. While the Comprehensive Spending Review (CSR) settlement was the harshest in decades, it did provide a government-wide low carbon plan, £860m for the renewable heat incentive, £200m for low-carbon technologies, and £1bn for a Green Investment Bank.

Energy secretary, Chris Huhne, has promised some 100,000 jobs under Green Deal plans to upgrade and insulate homes across the UK. There are also financial incentives to ensure the Climate Change Act 2008 targets to reduce greenhouse gas by 80% are met by 2050, including feed-in tariff payments for generating renewable energy, which forward-looking councils can certainly cash in on.

These national initiatives need to be considered in the context of last month’s sub-national economic growth White Paper.

New local enterprise partnerships (LEPs) can bid for inward investment support and may take on powers to distribute European funding. They can also bid for the £1.4bn regional growth fund (RGF) that will operate between 2011 and 2014 to stimulate enterprise by supporting projects with potential for creating long-term local economic growth and employment.

Eco-friendly projects – retro-fitting housing and public buildings with energy-efficient measures, using electric fleet and developing renewable-energy sources such as biomass, geothermal, wind and tidal energy – all have massive economic growth and employment potential.

There are impressive examples of councils providing a catalyst for developing the green economy locally. Southampton City Council supplies integrated geothermal combined heat and power to commercial customers in the city.

Birmingham’s Green New Deal created a demand for energy-efficiency measures by offering residents and businesses grants and low-cost loans to install insulation, efficient boilers and solar panels. The scheme was self-funding and relied on partnership working to create jobs and maximise supply chains.

And Kirklees used a mix of grants, revenue contributions, capital receipts and borrowing and Scottish Power contributions to fund its Warmzone scheme so householders could have loft and cavity wall insulation installed. This created more than 100 jobs and stimulated the district economy by procuring materials locally.

Developing new green skills has also been an important aspect of the Welsh Assembly’s £30m Arbed scheme, which involves working with social housing providers to tackle fuel poverty and make properties more energy efficient. Targeted recruitment and training through schemes such as JobMatch is central to contracts, and 156 weeks of training must be delivered for every £1m spent. A new construction training centre, developing expertise in solar installation in Brigend, the country’s third most educationally-disadvantaged ward, is one example of Arbed’s success.

Dovetailing green initiatives with economic development initiatives makes perfect sense, but there is a lack of guidance. APSE is currently producing a green tendering toolkit and embarking on a Knowledge Transfer Programme, which will offer practical advice on how to deliver economic development alongside environmental benefits.

We are not suggesting councils do everything themselves. Instead, they need to be proactive in leading this agenda and forge links with the private sector, each other and the voluntary and community sectors to make the most of the green economy opportunities which are emerging.

For example, manufacturing solar panels in Cornwall was not competitive compared with China – but Cornwall Council intends to capture as much of the supply chain for the local economy as possible, through making sure the planning, site preparation and skilled designers and electricians are in place for assembling the panels locally, according to renewable-energy consultant, Stephen Cirell, former director of the Green Cornwall Programme at the authority.

He adds: ‘Local authorities should lead by example and encourage the green economy.

This is not happening because there is not enough information available and people have not made the mental leap as yet.’

While there is understandable caution about legal barriers, as APSE’s recent publication on sustainable procurement showed, measures such as unbundling contracts can maximise local economic impact while remaining within European Union regulations.

Resources may be tighter than ever, but investment in greening your local economy not only helps save the planet – it can also save the pounds and have a tremendous knock-on impact on local businesses, skills and employment.

Mark Bramah is assistant chief executive at the Association for Public Service Excellence (APSE)