Environmental, Social and Governance (ESG) issues have moved firmly into the mainstream in response to regulatory changes, investor demand and an urgent need to address material financial risks arising from issues like climate change. Increasingly, asset managers are moving beyond responsible investing on a “do no significant harm” basis, towards seeing financial benefit from integrating ESG criteria into investment decisions.
The Channel Islands, as leading International Finance Centre, have key roles to play in helping to direct capital flows to tackle today’s societal and environmental problems. Not being seen to do so, or attempting so-called “greenwashing”, has reputational repercussions. Both Jersey and Guernsey are taking jurisdiction-level action on sustainable finance, albeit with different approaches. Guernsey is a member of the UN Finance Centres for Sustainability network (FC4S), and the Guernsey Green Finance initiative is driving significant repositioning of the island as a global force for good. Jersey is also currently developing a new sustainable finance initiative and has recently consulted on a proposed ESG disclosure regime.
Channel Islands' banks, asset managers, insurers and administrators all have different challenges and opportunities arising from the focus on ESG and sustainable finance. We are seeing significant changes in what investors and clients expect from financial services businesses on the islands, both in terms of the ESG credentials of local business operations, and understanding and measuring the impact of assets under management. There is also a significant raft of regulation in many of the Channel Islands’ key markets, notably in the EU, but with the UK and many other jurisdictions catching up fast. Much depends on the specifics of industry sectors and geographies involved in your value chain. But two things are clear; this agenda is here to stay and a strategic approach is increasingly helpful.
We have experienced local specialists in the Channel Islands with a wealth of expertise on ESG and sustainable finance. We also have access to our market-leading global expertise in this field, including a team of over 100 sustainability experts in the UK. We can help you whatever your starting point, and whatever stage of the investment life-cycle you are focused on, from developing an ESG approach and strategy, through to business integration, corporate reporting and disclosures, assurance and impact measurement. For private equity funds, we can provide ESG support throughout the deal cycle; on acquisition, through the holding period and on exit.
We also walk the talk. We are proud of our own response to ESG issues and how we seek to make a positive societal impact, in line with our business purpose to build trust in society and solve important problems.
Please get in touch to discuss how we can help you.
ESG is an extremely wide field. What matters is that those material issues which have significant real or potential financial implications for your business are well understood and managed, from both a risk management and value creation perspective. We find the most successful businesses align this with a focus on purpose and strategy, and through ensuring they have the right skills and diversity of thought at Board level. We assist our clients to review roles, responsibilities and governance for ESG, to develop strategy, and to explore and define organisational purpose.
Reporting requirements for financial services on ESG are increasing in rigour and complexity in many jurisdictions. For example, the EU’s Action Plan on Sustainable Finance has some far-reaching implications, whilst implementation of the Taskforce for Climate-Related Financial Disclosures (TCFD) is now relevant in different contexts, including for premium-listed entities on the London Stock Exchange, and for signatories to the Principles for Responsible Investment (PRI). Take-up of voluntary best practice standards for impact investing are also increasing, for example the IFC’s Operating Principles for Impact Management. Working with our global experts in this field, we can support you with implementing requirements, such as strengthening governance and scenario testing under the TCFD. We can review your readiness for disclosure, help you develop your reporting, or alternatively we can provide independent verification and assurance over your disclosures to relevant international standards. We are also delighted to provide third party certification for funds under the Guernsey Green Fund and for TISE Green.
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