Endless Opportunities In Sustainability – Funds Forum Key Takeaways, Panel Session 1 – Fund Management/ REITs

“Endless opportunities” was the upbeat theme of WE ARE
GUERNSEY’S 2022 Funds Forum, with two panels exploring how
sustainability and technology will help drive the post-pandemic
economic recovery globally. 

There are, of course, headwinds. As keynote speaker for the
event, renowned economist, author and broadcaster Dharshini
David delivered a canter through recent events that have led
to the current state of the global economy. While she pulled no
punches in her assessment of our challenges, she was cautiously
optimistic about the future.? 

Dharshini asked whether inflation and rising costs of living
across the world posed a threat to the progress toward a
carbon-neutral future. She questioned whether net-zero has become
had become a ‘nice to have’, acknowledging that
sustainability is driven by customer choice, but must also make
commercial sense for industry with a need for clear global
political leadership.

While Dharshini took comfort in humankind’s ability to
innovate and adapt in order to find climate solutions, with these
abilities evident during the pandemic, she added that without data
to scrutinise, progress might be lost. Transparency and trust were
themes that permeated the first panel session.

Panellists

• Gillian Browning – Director of the Investment,
  Fiduciary and Pension Division – Guernsey Financial Services
  Commission 




• Dylan Cox – Head of Private Markets Research -
  PitchBook 




• Lorraine Johnston – Partner –
  Ashurst 




• Sona Stadtelmeyer-Petru – Executive Director – J.P.
  Morgan 

 Key takeaways

• Regulation of climate-orientated investments
  was initially about exclusion and reducing risk for investors; that
  perception has evolved to signal opportunities for impact and
  returns.

• Progress is needed on a consistent taxonomy.
  Currently, there is no shortage of ESG standards out there, with UK
  and Europe taking different policy approaches to regulation and
  indeed the meaning of sustainability itself. Guernsey’s
  approach to regulation has been to develop policy that refers to
  existing standards or overlays what is out there while ensuring
  it’s relevant and proportionate to the market.?

• A significant challenge is a lack of quality
  data, particularly around areas such as biodiversity. Typically,
  data is backwards-looking and not always complete. Without data to
  create confidence that the impact of the investment is measurable,
  capital flows into environmental assets could be slowed. Alongside
  data, it’s helpful to have an understanding of a company’s
  carbon-neutral pathway and be in the right place to challenge them.
  Collaboration and transparency are critical.?
  




• The risk of greenwashing looms large; however,
  to some extent, that comes from having so many different
  definitions, fund ratings and standards. It’s early days in
  terms of systematic data for sustainable investments. A lack of
  consensus can lead to accusations and mudslinging. Companies must
  be held accountable without creating a negative dialogue around a
  sector.? 




• The next frontier for sustainable investment is
  natural capital and biodiversity. Investors will need assurance
  about entering this fast-moving space. Like the world-first
  Guernsey Green Fund, natural capital-regulated funds will help
  create trust and, therefore, investor interest in this
  sector.? 

• Every step towards net zero is a step into a
  new world. It is a learning process for everyone as this new era is
  built and progressed. Regulation provides the scaffolding to help
  asset managers think about what is in the fund and build trust in
  the sector for investors.? 

For more information about Guernsey’s finance industry
please visit
www.weareguernsey.com.

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