Guernsey is at the forefront of the development of green finance after a busy year in this space. The island announced its green development strategy in April 2018, seeking to position itself as the go-to jurisdiction for green financial services.
The ambition is to develop the broadest and best range of products with a green focus among global finance centres, incorporating investment, securities and insurance markets and services.
The first step was the announcement of the world’s first regulated green fund product – the Guernsey Green Fund (GGF) – by the island’s regulator, the Guernsey Financial Services Commission (GFSC), last July. Managers of Guernsey funds can apply for a green “kitemark” if they can demonstrate compliance with defined green rules and offer investors greater certainty.
In October, the first green fund was registered in the island, the Guernsey-domiciled agribusiness-focused Cibus Fund. More are expected soon.
The green focus is not solely on funds. The GFSC has announced plans to work with the global insurance industry to enable insurance companies to access long-term green investments, which will potentially widen the pool of purchasers for green investments.
Guernsey Green Finance, the umbrella body for green finance in the island, is developing and delivering a framework for the island, aligned with the assessment framework developed by the United Nations’ Financial Centres For Sustainability (FC4S) network.
Guernsey attended the network’s AGM in China in October and a month later was part of the launch of FC4S’s European network in Dublin, alongside eight other European centres including London, Frankfurt, Paris and Zurich, building a broader European commitment to sustainable finance.
The International Stock Exchange (TISE), headquartered in Guernsey, has also launched a green segment which will include criteria for bonds, funds and companies. In addition, a “green” bond from Hong Kong has already listed on TISE.
The advisers involved chose TISE due to cost-effectiveness, the simplicity of listing and Guernsey’s green credentials.
We see the potential for green and sustainable finance as enormous, and of course it streams into major global initiatives.
Our work in this area builds on Guernsey’s strengths and expertise in private equity and infrastructure, supports other initiatives in areas such as impact investing, and is part of a general repositioning of the island’s financial services offering.
With green finance, Guernsey is once again demonstrating that it can develop products and solutions to respond to real-world issues.