A year of being green
CLIMATE CHANGE is the one of the biggest challenges the world is facing right now, and the focus is often, understandably, on cutting carbon emissions and increasing the use of sustainable energy. One of the key areas that will support this is the need for green investments – money that goes towards supporting green and sustainable projects. And this is where Guernsey is playing a world-leading role.
When it introduced the Guernsey Green Fund rules in July 2018, the Guernsey Financial Services Commission created the world’s first regulated green investment product. In doing so, it effectively created a ‘kitemark’ that once awarded assures investors that specific green criteria have been met and that their investments are having the desired, positive environmental impact.
As we approach the Green Fund’s first anniversary, there have been some notable developments that truly demonstrate the value that the product is also offering to Guernsey’s funds industry.
In April of this year, for instance, the Bluefield Solar Income Fund achieved accreditation as a Guernsey Green Fund and became the first fund listed on the London Stock Exchange to do so. A Guernsey-registered, closed-ended investment fund, Bluefield Solar invests in more than 80 UK-based solar assets, targeting long-life solar energy infrastructure that’s expected to generate stable renewable energy output over a 25-year asset life.
Not only did the accreditation of such a major fund help raise the profile of the innovative Guernsey Green Fund regime, it also reinforced the fact that it’s not just new funds that can apply for Green Fund status. Significantly, Bluefield Solar was launched in 2013 and was already listed on the Main Market of the LSE when it applied for Guernsey Green Fund accreditation.
Interest in the Guernsey Green Fund is gaining momentum with enquiries from new and existing providers increasing as awareness of the product spreads out.
The bigger picture
The Green Fund regime is just one part of a concerted effort to make Guernsey a centre of green investment excellence. Hot on the heels of the Guernsey Green Fund, the International Stock Exchange launched a new market segment, Tise Green, which aims ‘to enhance the visibility of those investments which make a positive impact on the environment’.
Similar to the Guernsey Green Fund, any investment wishing to be admitted to Tise Green must meet an internationally recognised standard of green finance criteria. However, admission to Tise Green is open to all types of green investments, including bonds, funds and trading companies, from all jurisdictions.
Underpinning all of this admirable work is Guernsey Green Finance – the umbrella body which pulls together the island’s government, the GFSC and the wider finance industry. Together, their intention is to provide the broadest, most comprehensive range of green and sustainable financial services.
This not only comes from creating new products such as the Guernsey Green Fund, but also through engaging with international initiatives and partnering with fellow global finance centres.
In the last few months alone, Guernsey Green Finance has announced a collaboration with the UK Green Finance Initiative and also played host to Stephen Nolan, managing director of the International Network of Financial Centres for Sustainability (FC4S).
The reality is that Guernsey has been administering clean technology and ESG funds for some years, so these recent developments are simply building on the expertise in this area and will help attract further investment. Indeed, businesses on the island continue to support managers launching a range of sustainable funds – such as the recent Greensphere Capital launch of their second private fund, which will back companies and projects that help to mitigate the biggest risks facing our generation – resource scarcity, commodity and fuel volatility, and climate stress.
It’s clear that Guernsey is fully committed to its role as a global citizen and will use its position as a leading international finance centre to keep building on its standing in the green finance space. Indeed, Guernsey Green Finance is currently reviewing the potential for the development of green insurance.
And while Guernsey’s finance industry will benefit from increased investment into these green areas, the greater benefit is the overall international strategic commitment to mitigating environmental damage and climate change.