Sustainable finance momentum is picking up in the UK Crown Dependencies

The sustainable finance market in the UK Crown Dependencies is gaining significant momentum.

Jersey issued a consultation on designing a Policy and Regulatory Framework for Sustainable Finance in March this year. There was a significant increase in consultation 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 financial services.

There was an overwhelming agreement, 93% of respondents called 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 ISSB.

The GFSC has issued a discussion paper on the future of sustainability reporting in the Bailiwick of Guernsey indicating its intention to consider aligning with the International Sustainability Standards Board (ISSB) standards.

The deterioration of the UK’s natural environment could lead to an estimated loss of over 12% of GDP. It has also been estimated that $44 trillion of economic value generation (more than 50% of global GDP) is moderately or highly dependent on nature and its services.

The financial services sector plays a pivotal role in shaping a sustainable future. As the "plumbing" of the global economy, financial institutions have the power to direct capital towards environmentally and socially responsible activities and drive positive change. The Isle of Man, with almost half of its GDP derived from financial services and its unique status as the world's only entire-nation Biosphere, is well positioned to become a leader in sustainable finance.

Finance Isle of Man (FIOM) has launched a comprehensive Sustainable Finance Roadmap (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.

To explore the exciting potential of sustainable finance in the Isle of Man, visit Finance Isle of Man, feedback on the Sustainable Finance Roadmap report or express an interest in getting involved by contacting the Finance Isle of Man team as seen on page 4 of the report.

Based on Deloitte’s analysis of Crown Dependencies entities reporting on the Taskforce on Climate related Financial Disclosures “TCFD” as of Q2 2024, 60 LSE listed companies incorporated in the Isle of Man, Jersey, and Guernsey on TCFD, of which 15 of those entities obtained assurance on their ESG metrics.

Contact Dominic Wall for more information by emailing drwall@deloitte.co.uk