No-one wants to be seen as a lax-haven

New legal obligations for listed companies in the UK to publish annual plans on how they will get to net zero could come into force as soon as 2023. This is a move widely seen to be tackling ‘greenwashing’.

While hopes are still high that the island’s interests in green and sustainable finance will help in this regard, we await the impact.

This being a niche area for Guernsey will require the island to not only talk the talk, but to walk the walk. And that is where risk emerges. As Marc Laine, the former deputy now heading up ESI Monitor, the local company which helps businesses and organisations to understand and manage their carbon footprint, says, if the island fails to follow, we risk being called a ‘lax haven’.

Just when we hoped that global corporate tax rates might finally end the days of the ‘tax haven’.

‘We’re in a world where we can’t not follow that best practice, Guernsey won’t want to be seen as a laggard, particularly in financial services,’ he said.

In terms of the island’s path to net zero, in the summer of 2020 the States approved a climate change policy and action plan, which aligned the island to UK policy to ban imports of fuel vehicles by 2035. Added, more vaguely, were proposals to phase out non-recyclable packaging, establish an on-island renewable energy target, and introduce a biodiversity requirement for new developments.

The States say that Guernsey has made ‘relatively good progress’ on greenhouse gas emissions to the date of the report – just under 29% on 1990 levels. And the same report warned that carbon neutrality would require significant and co-ordinated changes from individuals, businesses and government.

Maybe signing up to the UN Paris Agreement on climate change will help to drive matters forward, but on that, last we heard the States was seeking clarity on whether Nationally Determined Contributions on targets would be set by Guernsey or would be an extension of the UK’s.

Which all looks like a destination in mind, but, so far, little in the way of a road map for getting there. While we wait for clarity, we should remember that no-one wants to be seen as a ‘lax haven’.