Raising the bar: Jersey’s new sustainability risk management and anti-greenwashing guidance

The Jersey Financial Services Commission has issued new guidance setting out a clearer supervisory baseline for sustainability risk management, applicable to all registered persons and firms governed by the JFSC's codes of practice. Framed as baseline good practice, the guidance, which will take effect from Q1 2027, is designed to shape supervisory expectations and to prepare firms for formal enhancement of the codes. The guidance is structured around two core expectations under Jersey’s codes of practice:

• The first is sustainability risk management under Principle 3, which the JFSC explains through a practical framework for identifying, assessing and managing sustainability-related risks, with a focus on climate change.
• The second is anti-greenwashing under Principle 7, under which firms are expected to ensure that sustainability-related claims about the firm, products or services are fair, clear and not misleading.

This guidance is relevant in the context of Jersey’s Financial Services Competitiveness Programme and the recent launch of Time to Win. For a well-governed international finance centre, credible and proportionate sustainability risk management regulation is a key part of the competitiveness equation - particularly as global investors expect alignment with recognised international standards. The JFSC’s guidance therefore lands at an important moment; helping Jersey stay connected to the direction of travel in other markets, while preserving a practical model suited to the island’s regulatory environment.

Importantly, the JFSC has not created a requirement for firms to build new risk architecture from scratch; instead, sustainability risk management should sit within existing processes. This should be welcome news for firms but should not be mistaken for a light obligation. The guidance still expects firms to assess sustainability risks, document assessments proportionately and escalate conclusions to the board or equivalent; effectively embedding sustainability risks across the same governance disciplines that apply to other financial and conduct risks.

The anti-greenwashing element, which extends the scope of Jersey’s existing legislation, is equally significant. The JFSC says sustainability-related claims must be factually accurate, capable of substantiation, clear, understandable, complete and balanced, and any comparisons must be fair and meaningful. Firms are expected to have governance over how claims are formed, reviewed, approved, updated and withdrawn; and in practice, this brings websites, pitch materials, investor reporting, pre-contractual disclosures, product descriptions and even social media into scope.

The JFSC’s approach is internationally aligned without simply copying overseas models. Like several leading financial centres, the JFSC has prioritised climate risk governance and anti-greenwashing expectations and is asking firms to embed both within existing governance and risk frameworks. This places Jersey firmly within the international direction of travel in terms of sustainability risk management expectations.

At the same time the Jersey model remains proportionate. The guidance is explicit that firms should tailor their efforts to the level of risk identified, and it gives practical examples ranging from a qualitative desktop assessment every three years through to deeper analysis where risks are more material. This differs from other international regimes that are based on extensive taxonomy rules and disclosure requirements.

An important point is the JFSC’s reference to single materiality. The guidance says firms should focus on how climate change may influence their financial position, performance or cash flows, and that a double materiality assessment is not required (although firms may choose to undertake one). Our view is that this should make implementation objectives clear for Jersey firms, particularly those that want to align sustainability risk governance with existing enterprise risk management.

The anti-greenwashing provisions also reflect a pragmatic supervisory style. The guidance looks across the lifecycle of a product or service and emphasises evidential support, consistency across channels, transparency over methodologies and ownership of approvals. This is likely to resonate particularly strongly for asset managers, advisers and administrators involved in product structuring, distribution, reporting and investor communications.

If your firm is in scope, we recommend you consider three core implementation challenges:

1. Risk identification and assessment: the guidance expects firms to consider physical and transition-related climate risks and to map climate risk drivers into current risk categories such as credit, market, liquidity, operational, strategic and reputational risk. This means you’ll need to decide where climate risk sits in your risk taxonomy, who owns it day to day, how it is escalated, what management information is needed and how often the assessment should be refreshed.
2. Documentation and evidence: the JFSC specifically points to keeping records of risk assessments, methodology, judgements and conclusions. On anti-greenwashing, firms should keep records showing how claims were reviewed and what evidence was obtained. If your organisation is more diversified, your evidential burden could become significant quite quickly if there is no clear ownership model. Board papers, risk taxonomies, product approval committees and marketing sign-offs should all be tested for whether they capture sustainability-related financial risk and sustainability claims in a sufficiently rigorous way.
3. Governance: the guidance references board oversight, accountable individuals and escalation routes for concerns. This means implementation is unlikely to succeed if it is delegated solely to compliance or treated as a marketing review. Effective implementation will depend on coordination between risk, compliance, product design, distribution, legal, internal audit and communications teams, with clear roles and challenge points.

Our local team is part of PwC’s global sustainability risk management network and has worked with many international financial institutions on sustainability-related risk and regulatory programmes. Based on our experiences, we have four recommendations for in-scope firms:

1.  Start with a structured gap assessment against the JFSC’s baseline good practice. You should be asking whether climate-related risk has been identified and assessed through ordinary risk processes, whether the materiality judgement is documented, whether there is clear board visibility, and whether existing metrics and reporting are sufficient if the risk is material. For larger firms, go beyond a desktop exercise and test how the framework operates across business segments, products and management information.
2. In parallel, firms should undertake a claims inventory: identifying where sustainability-related claims are already being made across websites, brochures, pitchbooks, client reports, pre-contractual documents, subscription materials and social media, then mapping the evidence, ownership and approval pathways behind each one.
3. Firms should also review product and change governance. The guidance specifically notes that sustainability considerations may need to be reflected in product approval, vendor oversight and internal audit cycles where relevant. Regarding claims, ensure you have a process for reviewing, updating and retiring claims when data changes, methodologies evolve or the product no longer supports the original marketing.
4. Finally, boards and senior management should prepare for the governance conversations that the JFSC clearly expects. The guidance places emphasis on board oversight, management responsibilities, appropriate skills and periodic reassessment. Now is your time to decide what the board will see, how often it will see it, what challenge it will be expected to give and how oversight will be evidenced.

Firms that act early will be better placed not only for supervisory scrutiny before the enhanced conduct expectations come into force; but also for investor and stakeholder questions about how climate risks are managed and how sustainability messaging is governed.

PwC has extensive experience helping financial services businesses manage regulatory change and integrate risk management and control frameworks. If you would like an informal chat, or you’d like support to turn the guidance into a practical plan, please reach out to Tori Davis, Ali Cambray or your usual PwC contact.