Working Towards a Sustainable Future for Finance - Introduction

As I write this, the oppressive temperatures of an unprecedented summer heatwave that is sweeping much of Europe serve as a stark reminder of the imperatives that underpin our sustainable finance strategy, Jersey for Good – A Sustainable Future.

Launched in March 2021 and backed by a Pathway to Success document for the first two years, this initiative brings together key stakeholders from industry, policy and the regulator around a common goal – to ensure that Jersey plays its part in the global transition to a more sustainable economic model. As we focus on building the capabilities and an enabling environment that will help us to deliver our mission statement, we are also creating the conditions for Jersey’s ongoing success as an international finance centre: one which is capable of servicing and creating sustainable value for a client base increasingly focused on environmental, social and governance (ESG).

Now more than ever, we believe that Jersey’s vision to be recognised as the leading sustainable finance centre in the markets it serves by 2030 sets the right level of ambition. It helps us to focus our efforts as we work with the Government of Jersey to scope out a future regulatory and legislative framework for sustainable finance that is both credible and workable.

It serves as a constant reminder that our industry needs to upskill, strive for quality and demonstrate innovation in providing sustainable financial services that meet the evolving needs of our clients, whether in the alternative funds space or in the management of private wealth.

We have already achieved a huge amount. The first year of our strategy resulted in Jersey implementing a robust new antigreenwashing regime, join a number of key global networks such as the UN-convened Financial Centres for Sustainability and participate in COP26 as part of the extension of the Paris Agreement commitments to our Island by the UK Government. We have also supported the domestic net-zero agenda through the Government of Jersey’s Carbon Neutral Roadmap. The first stocktake of sustainable finance activity in Jersey last year shows some encouraging signs that firms are using frameworks and standards to start re-allocating capital towards sustainable investments.

Our clients expect nothing less. A recent survey by Jersey Finance showed that a jurisdiction’s sustainable finance credentials are increasingly expected to play a part in a company’s choice of domicile. On our part, we have been supporting thought leadership on key issues such as the interface between fiduciary duties and sustainable investing, helping to develop a global understanding of the challenges and opportunities for fiduciaries.

In deploying our strategy, we are fortunate to be able to draw on the expertise and innovation of a diverse range of Jersey Finance members who form part of our growing sustainable finance ecosystem. We are proud to be showcasing this local talent, through initiatives such as our Sustainable Finance Demo Day and our inaugural Sustainable Finance Awards.

Yet there is much more to do if we are to realise our ambition and deliver on our responsibilities as a finance centre. Also, there is no doubt that headwinds are gathering – alongside the cost-of-living crisis, inflation, global energy and food security issues, the very concept of ESG is experiencing growing pains.

Concerns over the lack of clear ESG data and definitions, the slow pace of convergence in global standards and signs of a regulatory crackdown on firms that make unsubstantiated sustainability claims, all contribute to the sense of a reckoning for sustainable finance.

However, as the current extreme weather events remind us, the clock is ticking down during this crucial decade for action on interconnected issues such as climate, a just transition and the nature crisis. In that context, there is no alternative but to stay the course and, building on our early successes, Jersey will double down on its efforts to build a sustainable finance centre.