Forecasts for demand and future supply of sustainable finance is big number territory. Some 2.5% of global GDP annually needs to be invested in the energy system until 2034 to reduce global temperatures by 1.5°C. These numbers don’t diminish as we put things off – they just get bigger.
But despite the latest warnings of the International Panel on Climate Change (IPCC), many people and, sadly, many finance professionals, remain oblivious to what sustainable finance aims to achieve or the scale of the task ahead.
The European caught up with Dr Andy Sloan, Chairman of Guernsey Green Finance, to discuss the island’s progress in the area of green and sustainable finance.
What has been Guernsey’s response to any of the challenges presented by climate change?
Andy Sloan: We have created the green and sustainable finance strategy, which is part of a development programme for Guernsey’s finance sector. The strategy seeks to position us as global financial specialists and to pivot us as a force for global good by becoming a centre for green and sustainable finance.
Our approach is to:
• Align with and build on a global green taxonomy.
• Rapidly develop a comprehensive product offer.
• Develop a programme of engagement.
• Work with global public policy groups, including our membership of the UN’s Financial Centres
for Sustainability (FC4S), to foster international
co-operation in developing green finance.
This complements and supports the UK management industry, and should enable us to create the broadest green and sustainable finance ecosystem.
How did you start on this journey?
AS: Our first step was launching the Guernsey Green Fund (GGF), the only regulated investment fund regime for green assets globally. We found there was a dearth of genuine product – however this is not a strategy to supply new product to create demand, but to create product to meet anticipated future demand.
How does the fund work?
AS: The Guernsey Green Fund provides market confidence in the product from the regulatory wrapper, reassurance that funds are invested into green assets, and offers a platform through which investments into green initiatives can be made. It enhances investor access to the green investment space by providing a trusted and transparent product.
As demand rises, we expect that capital-raising will become easier for funds with the certification. We are looking to create a global benchmark.
What has been the response from the financial community?
AS: The interest in the Guernsey Green Fund has been exciting. The first GGF raised significant capital off the back of the announcement, a second was from a manager with credentials in sustainable agriculture investment, with more to follow. ν