In 2023, Jersey Finance undertook the second ‘stock take’ of sustainable finance in Jersey, the first having taken place in 2021.
This stock take further strengthens our commitments within our ‘Jersey for Good’ initiative and sets out to establish a baseline against which progress can be tracked and helps to support further policy development in a fast-moving global landscape for sustainable finance.
What is the FC4S assessment programme?
The UNDP Financial Centre for Sustainability (FC4S), provides centres like Jersey with a globally-recognised tool for carrying out this type of stock take.
42 financial centres are part of the network and 26 completed the 2023 assessment programme. Jersey Finance are the FC4S member representing Jersey as the financial centre.
The aim of the FC4S assessment programme is to help identify areas where centres like Jersey can take action to improve their effectiveness in deploying capital to help meet the needs of the net-zero transition and the wider sustainable development agenda under the 17 UN Sustainable Development Goals (SDGs).
The assessment covers three key ‘pillars’:
- Institutional Foundations
- Enabling Environment
- Market Infrastructure
Performance in these areas is benchmarked against a range of criteria and indicators of best practice for sustainable finance centres, with the finance centre’s alignment level in each key area rated 0 to 5 (where 5 represents full alignment to the requirements of a sustainable finance centre). The results were collected through the FC4S assessment programme survey between April and July 2023.
2022 - 2023 assessment results
- In the Institutional Foundations Pillar, Jersey Finance surpasses the median of 4.1 with a score of 4.4, placing it in fourth position within the FC4S Network and improving upon the previous rating of 3 in 2021. Jersey Finance equals the median in all the categories of this pillar: Activities, Action Plan, Stakeholders, Low-Carbon Transition (Financial Centre Level) and International Connectivity.
- The improvement in this score is mostly attributed to Activities, Action Plan, Low-Carbon Transition (Financial Centre Level) and International Connectivity, areas in which Jersey Finance remarkably achieved a higher performance.
- Jersey Finance demonstrates a leading performance within its regional cluster, surpassing the regional median of 4.3 with a score of 4.4 and sharing the third position.
- Jersey Finance attains a distinguished standing within its economic cluster, sharing the third position with a notable score of 4.4, surpassing the cluster’s median of 4. This positioning is attributed to the remarkable performance in Activities and Low-Carbon Transition (Financial Centre Level).
- In the Enabling Environment Pillar, Jersey Finance’s overall performance places it at the FC4S Network median, which is 2.8, and in the sixth position within the Network. It has outperformed the median on Low Carbon Transition (Country Level) and aligns with the network median in Financial Policy & Regulatory Environment, Public Institutional Environment and Professional Development & Education, but there is room for improvement in Carbon Pricing, as the score falls below the median.
- Compared to 2021, Jersey Finance demonstrated improved performance in its enabling environment, as its score in the previous edition was 2.4. This is partially attributed to enhancements in Financial Policy & Regulatory Environment and Low Carbon Transition (Country Level).
- Compared with its regional cluster, Jersey Finance’s score of 2.8 is below the cluster’s median of 3.2, placing it in sixth position. Strengthening Carbon Pricing would lead to an enhancement of its regional standing.
- In the economic cluster, Jersey Finance’s score of 2.8 is also lower than the median of 3.2, placing it in sixth position.
- Jersey Finance’s overall performance (1.8) places it at the FC4S Network median of 1.8, compared with 0.8 in the previous assessment, and in seventh position. This result is attributed to its good performance in Banks. In addition, in Capital Markets, Asset Management, Debt Markets Jersey Finance matches the network median. However, there is room for improvement in Insurance, as the Financial Centre score is below the median.*
- When benchmarked against regional peers, Jersey Finance shares the fifth position, but its score of 1.8 puts it behind the cluster’s median of 2.0. This is due to its performance in Asset Management, Insurance and Debt Markets, scoring below the regional median.
- In the comparison with its economic peers, Jersey Finance score of 1.8 puts it in seventh position, below the cluster’s median of 2.2. Bolstering Insurance would result in an improvement of its economic standing.
- An analysis of banks, asset management and insurance indicates that efforts could be strengthened across the evaluated dimensions of best practice, climate alignment, sectoral exclusion and capital allocation.
* It was noted that, as for the first stock take, Jersey Finance decided not to complete the assessment programme for the island’s insurance sector and advised UNDP FC4S of this, together with the rationale.
Next steps
UNDP FC4S are presenting Jersey Finance’s Sustainable Finance Steering Committee with the recommendations from the report in April. The Steering Committee will then be tasked with implementing the relevant recommendations, in parallel to the Government of Jersey’s Sustainable Finance Consultation Paper.
Useful resources
Work
Tom McKenna › Sustainable Finance Lead
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