GFSC introduces Natural Capital Fund framework

GUERNSEY-BASED investment funds prepared to make their activities and investments more sustainable now have a new opportunity to designate themselves as such.

GFSC director-general William Mason. (31311058)
GFSC director-general William Mason. (31311058)

The Guernsey Financial Services Commission’s Natural Capital Fund framework is seen as a new offer in the island’s developing sustainable funds regime and has been devised to complete a pledge made as part of COP26 to extend its regulatory regime to include sustainable funds.

The Natural Capital Fund regime creates a regulatory designation for funds to help channel investment into biodiversity and natural capital projects that make a positive contribution or significantly reduce harm to the natural world.

Notably, the new regime will allow managers to invest in not just green companies, but also those ‘imperfect’ companies prepared to significantly reduce the environmental damage they do.

The intention is to provide environmentally conscious investors with assurance that their capital is deployed in efforts to promote the protection and recovery of the Earth’s natural environment.

The new framework is being seen to complement the Bailiwick’s existing regulated Guernsey Green Fund regime, now channelling nearly £5bn into green investments. Both regimes have sustainability designations based on international standards.

GFSC director-general William Mason said that developments in Guernsey showed the island was a world leader in sustainability, with initiatives being noticed in the EU and beyond.

‘Guernsey is good at doing complex things, and doing things flexibly, which some bigger regulators find difficult,’ he said. ‘We can make a big difference by doing something slightly different from the mainstream.

‘It is exciting to do something to push the planet in a positive direction, we hope to make a small difference. It is a good opportunity to help more private sector funds with nature protection at their heart.’

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