Private finance and its role in supporting the transition to net zero – Environmental Law

Background

Although particular attention has been given to the role of public finance, until recently less attention has been given to the critical role that private finance can and should play, if the goals of the Paris Agreement; to limit global warming to less than 2 degrees Celsius (preferably 1.5) degrees, and for developed economies to invest $100 billion a year – must be met.

The transition to net zero requires a fundamental rewiring of our global energy system. It will drive disruptive innovation in nearly every industry and every region of the world.

What role does Guernsey play?

There is a significant opportunity for global private finance to partner with Guernsey’s financial sector to drive a proactive sustainability agenda and to establish Guernsey as the world’s leading center for financing the transition to net zero.

This includes traditional sectors such as: trusts and corporates, funds, insurance and investment management, as well as the development of new specialist expertise and support services, for example around ESG, data and fintech.

The key differentiators that allow Guernsey to seize this opportunity are:

• A solid track record of innovation




• A committed and supportive regulator




• Quick and easy access to global markets




• A strong, stable and trusted home for private capital




• A trusted house of specialized solutions




• A pool of experienced advisers

Services Dixcart

Investment Funds: Dixcart Fund’s services offer private and corporate clients the opportunity to establish Guernsey fund structures with a responsive and open regulator. Dixcart aims to support the growth of the green investment sector in Guernsey, from a total net asset value of almost £5bn in 2022 to a projection of £56bn by 2040. Wider opportunities exist to help green projects provide foreign investment in regions such as sub-Saharan Africa. and other geographies, encouraging net zero investment project targets for Guernsey registered, licensed and private investment funds

Trust & Company: Dixcart remains one of the leading fully independent, client-relationship and service-level driven trust, corporate and private fund services groups in the Crown Dependencies and beyond. Dixcart has a clear objective to develop opportunities to become the leading trusted provider for private clients (especially Family Offices) and corporate clients, who invest sustainably in the industry.

The way forward in Guernsey

Guernsey has pledged to achieve net zero by 2050 and an interim commitment to reduce emissions by 57% below 1990 levels by 2030. Working with the States of Guernsey, Guernsey Finance has made a clear the ambition that Guernsey plays a leading role in driving the transition to a greener and more sustainable future globally.

Via Guernsey Green Finance, Guernsey has already proven to be at the forefront of innovation in the green and sustainable finance sector.

A number of key examples include:

TISE Sustainable – Based in Guernsey, the International Stock Exchange (TISE) hosts one of the most comprehensive sustainable market segments in Europe and is aligned with the United Nations Sustainable Stock Exchange initiative

Guernsey Green Fund – the world’s first regulated product in this space, now channeling nearly £5 billion into green projects

Guidelines and frameworks – developing industry-first frameworks and guidance, including an ESG framework for insurers and green private equity principles

Cooperation and commitment – Sustainable Finance Week, took place on the 20^e at 23^rd September 2022 and brought together global leaders and experts in this field, to act as a catalytic force for innovation and collaboration. The week started with an exciting initiative, with the publication of a report on the Green Fund: Guernsey Launches Sustainable Finance Week with New Green Funds Scheme and ‘Just Transition’ Report | We are Guernsey

Guernsey also actively participates in a number of key international initiatives and networks including; the United Nations Financial Centers Network for Sustainability (FC4S), UK Green Finance and the Network for Greening the Financial System (NGFS).

Conclusion

While the challenges are great, the solutions exist in Guernsey.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.