The recent spate of high-profile protests and campaigns have not managed to significantly mobilise capital from the private wealth and family office sector into green and sustainable finance, according to new research carried out by Guernsey Finance. The sector is increasingly important for attracting investment, though individuals and family offices appear to be looking for greater confidence in returns and in the green credentials of their investments.
We believe this will catalyse a modal shift of the deployment of private capital into climate finance.
Our research was carried out with 20 family offices and high-net-worth individuals, with a combined estimated worth of £25bn, and 50 service providers. It showed more focus is needed in engagement with investment managers and investors on the aims of green and sustainable finance and the benefits of responsible investing.
Investors also wanted greater certainty in the green credentials of their investment – a framework for private capital in the unregulated space, providing confidence to investment managers and investors, is key to unlocking the flow of investment capital from private investors, family offices and private equity into green investments.
The research also showed that although most high-net-worth individuals and family offices surveyed had some investment in green assets – a trend being driven by the younger generation – only half were considering increasing asset allocations into green and sustainable finance. This result seems to fly in the face of populist opinion.
Guernsey Finance launched the research report, “Family Offices Financing Sustainability” at a London roundtable event with Guernsey resident Stephen Lansdown, co-founder of Hargreaves Lansdown. Mr Lansdown runs his family office business from the island, and has considerable interest in green and sustainable investing, particularly investing in Africa.
“You don’t have schoolchildren campaigning in the streets for nothing,” Mr Lansdown said. “They feel very strongly about this, they do know what they are talking about, they want investments which are good for now and good for the future. Whatever we think individually, this is a sector that is going to grow, and we have to make it easy for people to invest.” Mr Lansdown said that Guernsey, which launched the world’s first regulated green fund product in 2018, was well set to service this growing market.