Following the Guernsey Financial Services Commission’s (GFSC) regulatory publications and international developments to green and sustainable finance, some local firms may need to adhere to international regulatory standards of sustainable reporting and upskill.
The GFSC recently published the results of its Guernsey Green Fund thematic together with a ‘Spring Green Consultation Paper’ both of which demonstrated a strong appetite for green finance in Guernsey.
BDO Guernsey’s advisory senior manager Dawn Sealey explained to Channel Eye: “One of the key findings of the thematic report was that green investment knowledge and expertise was not widespread within the finance industry and local firms will have to ensure that staff are appropriately trained,”
“In addition, firms will need to identify which of the various international standards and regulations may apply to them and their clients and upskill their staff appropriately.”
The Guernsey Green Fund provides a platform for people to make investments into green initiatives and enhances investor access, and currently has one set of criteria for green funds to adhere to. The thematic report provides useful clarification for fund administrators that additional measurements can be used if there is a demonstrable approach in the underlying assets to mitigate environmental damage.
The GFSC’s publications coincided with various international developments. Dawn explained: “The Sustainable Finance Disclosure Regulation directive requires alternative investment funds (AIFs) to disclose on their website, in pre-contractual documentation and in periodic reports, how the product meets any environmental or sustainable objectives and the methodologies it uses to measure those and the extent to which it meets those objectives. This is something to consider for when first reporting is due in January 2022.”
The GFSC’s Spring Green Consultation Paper feeds back on the proposal to adopt the EU Taxonomy for Sustainable Finance as an additional alternative green criterion under the Guernsey Green Fund regime. At this stage the Commission are maintaining a watching brief and also noted that the UK has signalled its intention to introduce its own its own Green Taxonomy and also published a roadmap setting out an indicative path towards mandatory climate related disclosures aligned with the recommendations of TCFD (Taskforce on Climate related Financial Disclosures). For Guernsey funds marketed into both the EU and the UK it remains to be seen whether there will be some crossover in the applicable requirements.