Guernsey sponsors green investment fund certification

The Guernsey Financial Services Commission has released a set of rules and standards for the island’s recently developed green investment fund initiative.

The commision plans to award varying degrees of certification to environmental fund managers who can demonstrate their adherence to the outlined regulations.

According to the committee’s consultation paper, investment funds must fall into a category related to environmental protection, such as renewable energy, energy efficiency, transport, wastewater and non-energy greenhouse reductions.

Once a fund identifies its environmental focus, it then must fulfill the committee’s investment criteria for accreditation. First and foremost, a fully certified Guernsey Green Fund property must “be invested… with the ultimate objective of mitigating climate change resulting in a net positive outcome for the environment”, according to to the fund’s rules. Another important criterion is that perspective funds must be authorised or registered Guernsey Private Investment Funds.

The accreditation system is part of the island’s wider financial services strategy, which seeks to promote a strong set of regulatory standards for Guernsey’s investors.

“Guernsey has the benefit of already being a secure and experienced jurisdiction in which to hold investments and has the wealth of knowledge and expertise necessary to build a green fund platform on top of existing versatile structures,” says Andy Sloan, acting director of strategy at Guernsey Finance.

In terms of FDI, the Guernsey Green Fund has the potential to boost outward environmental investments from Guernsey to other markets around the world. Guernsey has already established a reputation as a source market for FDI projects. Guernsey’s outward FDI has increased steadily from just two projects in 2005 to 12 projects in 2017, according to fDi Markets.

“Showing that we are capable of committing finance to the environment is a strong indication that Guernsey is an innovative and forward-thinking place in which to do business,” says Mr Sloan.

The majority of Guernsey’s outward FDI projects fall within the construction (26 projects) and financial services (17) sectors, while the renewable energy sector only accounts for three projects, according to data from fDi Markets.