• Tue. Sep 20th, 2022

Guernsey offers first natural capital fund scheme

ByChad J. Johnson

May 10, 2022

The Guernsey Financial Services Commission (GFSC) has released two consultation papers, proposing to introduce a new regime.

In a bid to protect against greenwashing, the Guernsey Financial Services Commission (GFSC) has released two consultation papers in which it proposes to introduce a natural gas investment fund.

The aim of the scheme is to help channel investment into biodiversity and natural capital projects building on the success of the Guernsey Green Fund, which was the world’s first regulated green investment fund scheme .

Natural capital is considered the global stock of natural resources, which includes geology, soil, air, water and all living organisms.

The first consultation paper proposes the creation of a natural capital fund designation that is committed to making positive investments for nature. It will complement the Bailliage’s existing regulated Guernsey Green Fund scheme, which now channels over £4.4bn ($5.4bn) into green investments.

The second consultation document aims to strengthen levels of trust in the Bailliage’s sustainability framework by introducing measures that help prevent the potential risk of greenwashing.

Together, the Guernsey Green Fund and the Natural Capital Fund are designed to provide Guernsey funds with a choice of complementary sustainability designations based on international standards.

“It is not possible for the world to reach net zero without being positive for nature,” said Stephanie Glover, Head of Sustainable Finance at WE ARE GUERNSEY. “Leaders in biodiversity finance have called for more private investment and regulation to protect and restore the natural world,” she added.

“In the latest IPCC report, nature-based solutions represent three of the top five solutions to limit climate change. The proposed Natural Capital Fund regime will stimulate investment in these solutions and help investors to be confident that their investments are going to projects that will protect the natural environment and avoid and capture carbon emissions,” she said. declared.

“The proposal to introduce a Natural Capital Fund strengthens Guernsey’s position as one of the world’s leading centers of sustainable finance,” said MP Nick Moakes, Member of the Economic Development Committee for the States of Guernsey and Chairman of the Guernsey Green Finance Strategy Group.

In order to be eligible for the designation of the Natural Capital Fund, funds will be needed to set and monitor appropriate targets aligned with the 2030 action targets of the post-2020 global biodiversity framework of the Convention on Biological Diversity. and relevant United Nations Sustainable Development Goals, the Commission said. . The required measures relating to these objectives and the controls of these measures should provide investors with the assurance that the sustainable investment objectives of the Natural Capital Fund correspond to the expectations of investors.

GFSC chief executive William Mason said the Commission was not aware of any greenwashing practices undertaken by Guernsey-based licensed entities, but added that it was important to continue to guard against the risk of greenwashing.

The Commission is consulting to keep the bailiwick in step with investor protection measures in other developed jurisdictions. This consultation paper also seeks views on the future review of anti-green money laundering measures for other sectors, beyond investment licensees and funds.

“In 2018, the Commission launched the Guernsey Green Fund, creating what we believe to be the world’s first regulated green investment fund,” Mason said. “The Natural Capital Fund proposals and accompanying measures to combat greenwashing aim to enable the Bailliage to continue to develop as a leading center for sustainable finance,” he added. .

Guernsey, located in the Channel Islands, is an independent British Crown dependency, which has access to European markets through demonstrated regulatory compliance. It has around 1,000 investment funds domiciled or managed on the island, 150 licensed trustees and 700 licensed insurance vehicles.