Jersey Finance has set out an ambitious vision for 2030 and beyond – and industry engagement is already creating positive momentum.
The Channel Island of Jersey has set itself an ambitious vision to be recognised by 2030 as the leading sustainable international finance centre in the markets it serves.
Financial services are a major part of Jersey’s economy, employing more than 13,600 people. Jersey Finance, the promotional body for financial services providers on the island, is working with the island’s government to help it meet its own 2030 sustainability targets.
Sustainable finance can be a force for good. It channels funds into environmentally and socially responsible businesses and helps them meet more stringent environmental, social and governance (ESG) targets.
Jersey aims to be at the forefront of this movement. But what does that mean in practice? How will Jersey’s finance industry meet its sustainability goals?
A three-stage progression towards sustainable finance in Jersey.
The ongoing sustainable finance journey in Jersey is evolving in three stages:
1. Sustainability fact-finding
The fact-finding stage aims to discover what the industry in Jersey is doing now in terms of ESG, what more it thinks it should do and what form any innovation should take.
This is already happening. Jersey Finance knows that the key to success will be industry engagement.
The findings of these discussions will be debated in workshops and refined by working groups chaired by Jersey Finance. Representatives from across Jersey’s financial services sector will set the speed and direction of travel.
Importantly, change will be driven by the sector itself. Industry buy-in is essential if goals are to be both ambitious and achievable.
2. Sustainability training and awareness
What is sustainable finance, and how is it applied? ESG training will be crucial to success.
Many financial services companies in Jersey are already training staff in ESG investing, working towards qualifications such as the CFA Institute certificate in ESG and the CISI Sustainable and Responsible Investment qualification.
Intertrust Group is one such company. We have rolled out mandatory ESG awareness training and we offer our own internal qualification in sustainable finance.
The aim is to produce a deep pool of specialists in Jersey who can translate the demands of regulators and investors into innovative ESG funds, as well as ensuring compliance throughout the investment lifecycle.
3. A product to measure sustainability success
Investor demand and government encouragement – coupled with local expertise – will inevitably lead to innovation.
Intertrust has already developed a tool and service to capture and report on portfolio company ESG metrics.
Further new products will emerge as sustainable investment strategies proliferate.
But as well as creating an enabling environment for innovation, we have to define success and chart our progress towards it.
What does that mean in practice? We don’t yet know the details because we aren’t certain what to measure.
ESG adoption across the alternative investment sector is frustrated to some extent by the lack of global ESG reporting standards for funds. If global ESG reporting standards can be agreed upon, funds will be able to capture and report uniform information across the industry.
Investors will then be able to benchmark the different funds they invest in, and fund managers will be able to start building up their ESG track records for future fund launches.
Reporting standards will have to cover sustainability as well as issues such as diversity, inclusivity and gender equality.
Jersey Finance can play a key part in ensuring these global standards are set, by engaging with bodies such as the International Network of Financial Centres for Sustainability and the Institutional Limited Partners Association.
Will new regulation be required in Jersey?
While nobody is ruling out new regulation, it’s hoped that the innovation Jersey needs to meet its sustainability targets will largely stem from the industry itself. No serious financial centre can ignore the trend towards sustainable finance.
Jersey is starting from a good position. It already has the regulation in place to reassure investors that ESG funds are genuine and compliant.
For example, a recent addition to the guidelines of the Jersey Private Fund – the vehicle for funds with fewer than 50 investors – insists that marketing material and reporting for ESG products must justify any relevant claims and be explicit about what is measured and how.
The codes of practice governing the Jersey Expert Fund, the vehicle for larger funds, already stipulate that funds cannot mislead their investors. Those found to be in breach of these codes should expect to face regulatory sanctions.
Jersey doesn’t require a dedicated ESG offering, as its current fund products already mandate transparency and compliance.
A proactive regulatory body with strong punitive powers, the Jersey Financial Services Commission (JFSC) is also part of a sophisticated regulatory regime that will help build trust in the island’s new sustainable vision.
Jersey’s vision for 2030 is ambitious and the journey will not be easy. But the island’s financial services industry is united in believing it is the only path to take.
How Intertrust Group can help in Jersey.
– As a strategic partner, our proprietary innovative technologies combine with global knowledge and experience to deliver added-value services for all asset classes, while increasing manager visibility of portfolios on behalf of a fund’s investors.
– We offer expert guidance on how to take control of ESG data in your portfolio and attain 24/7 access to performance data.
– Our expert teams harness tools and cutting-edge technologies to eliminate costly errors in handling fund administration and corporate actions, investor relations and portfolio management.
– Intertrust Group is a publicly listed company with 70 years’ experience providing world-class trust and corporate services to clients around the world.