ESG regulatory outlook event takeouts
Our ESG seminar held in Guernsey covered the need-to-know topics impacting the Investment Management and Wealth sector and explored what it means for Guernsey Funds.
Key event takeaways:
1. The Sustainable Finance Market
Non-Executive Directors and those individuals working within the Guernsey Fund Sector were given the chance to delve into the intricacies and challenges of ESG investment and corporate reporting, as well as the evolving landscape of regulation, greenwashing risks, and the future direction of sustainable investing.
The sustainable finance market among the International Finance Centres is gaining significant momentum. Guernsey and Jersey are positioning themselves as leaders, while the Isle of Man is showing progress in developing a sustainable finance roadmap.
Jersey issued a consultation on designing a Policy and Regulatory Framework for Sustainable Finance in March this year. There is significant increase in consultation1 respondents, (16 in 2021 to 126 in 2024) indicating the rapid growth in awareness and interest in sustainable finance within Jersey’s financial services industry. 63% of participants were based in the financial services sector.
93% of respondents agreed on the need for a clear policy and regulatory framework, highlighting the industry’s desire for guidance and certainty in navigating the evolving landscape of sustainable finance. Jersey may be likely to adopt a robust and ambitious sustainable finance framework based on the International Sustainability Standards Board (ISSB).
2. Isle of Man Sustainable Finance Roadmap
Finance Isle of Man (FIOM) launched a comprehensive Sustainable Finance Roadmap2 (the Roadmap) which underpins their Sustainable Finance initiative.
This initiative aims to channel capital flows towards sustainable solutions encompassing climate action, social impact, and nature-based initiatives.
The Roadmap strategically outlines significant opportunities for the Isle of Man financial services businesses to develop innovative products and services, meeting the rapidly increasing global demand for sustainable investments. It proposes a two-year implementation framework (2025-2026), supported by plans for a new regulatory framework and upskilling programmes.
Developed in collaboration with the Ireland-based International Sustainable Finance Centre of Excellence (ISFCOE), the Roadmap is grounded in extensive research and stakeholder engagement. It presents 10 targeted actions across four key development pillars, driving the sustainable finance agenda forward.
The Isle of Man Financial Services Authority will support five of the Roadmap’s 10 targeted actions, focusing on embedding climate and nature-related risks into governance and risk management, combatting greenwashing, exploring sustainable investment product labelling, improving transparency, and reviewing regulatory frameworks to achieve broader sustainability goals.
3. Taskforce on Climate Related Financial Disclosure Reporting
Based on Deloitte’s analysis of the Channel Islands and Gibraltar entities reporting on the Taskforce on Climate related Financial Disclosures “TCFD”, 27 of the 65 LSE listed companies incorporated in Guernsey in the financial services sector report on TCFD, in which three of those entities obtained assurance on their ESG metrics. Please see page 3 of the ESG regulatory outlook.3
4. Event Survey Results
The survey results from the event focused on the fund sector in June 2024 and highlighted that 82% of respondents were seeking assurance on their sustainability report. It was also interesting to note that 40% of respondents plan to comply with the International Sustainability Standards Board’s S1 and S2 in the short to medium term and that 47% of respondents of respondents were not sure. The full survey results can be found on pages 4 to 8 of the ESG regulatory outlook.4
5. GFSC Discussion Paper
The GFSC has issued a discussion paper on the future of sustainability reporting in the Bailiwick of Guernsey5 indicating its intention to consider aligning with ISSB standards. Deloitte continues to lead discussions that shape the future approaches to ESG investment and reporting, particularly emphasising the role of transparency and regulatory compliance in fostering a sustainable finance market.
6. ESG Podcast
Listen to ‘The ESG Edit with Jessica Hodges’6 podcast series for further insights from Deloitte ESG and Investment Management and Wealth industry experts who discuss the opportunities and challenges linked to ESG topics.
For more insights and detailed information on the seminar's discussions, please email Stuart Crowley Associate Partner, Guernsey Audit & Assurance.
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References
2 https://www.financeisleofman.com/news/finance-isle-of-man-launches-a-sustainable-finance-roadmap/
3 https://ukpages.deloitte.com/rs/676-RGI-700/images/Guernsey-ESG-regulatory-outlook-analysis.pdf
4 https://ukpages.deloitte.com/rs/676-RGI-700/images/Guernsey-ESG-regulatory-outlook-analysis.pdf
5 https://www.gfsc.gg/news/discussion-paper-future-sustainability-reporting-bailiwick-guernsey
