Businesslife Magazine, Issue 83, May/June 2023

Page 1

price of staying quiet about your eco credentials BUSINESSLIFE Nature loss • Sustainable Disclosure Requirements • Measurement of ESG • Article 9 funds Greenhushing

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Digging deep

OVER THE PAST half a decade or so, three small letters have had a vast impact on the business and finance sector. Every boardroom, strategy team, product design department and marketing team has become fixated with the same abbreviation: ESG.

The rise of environmental, social and governance issues in consumer and investor consciousness has been a driver for every organisation rushing to ensure it can demonstrate a good ESG record, offer ESGfriendly products, and show strong ESG awareness and commitment.

The result has been a huge rise in ESG activity – not least the massive inflow of money into ESG funds over the past half a decade, the scale of which was typified by levels in the first half of 2021 alone surmounting the whole of 2020’s inflows.

These are trends that show little sign of abating. Asset managers globally are expected to increase their ESG-related assets under management (AuM) to $33.9tn by 2026, from $18.4tn in 2021.

With a projected compound annual growth rate of 12.9%, ESG assets are on pace to constitute 21.5% of total global AuM in less than five years – representing a dramatic and continuing shift in the asset and wealth management industry, according to PwC’s Asset and Wealth Management Revolution 2022 report.

However, ESG is not without its challenges and risks. That’s why, in this special ESGthemed edition of Businesslife, we get under the skin of the topic – to examine exactly how businesses can strategise to take full advantage of the ESG opportunity, while at the same time equipping themselves to avoid the risks that it presents.


The second in our series of Leaders Debate roundtable discussions certainly sets out a number of strategies for leveraging the opportunities of ESG.

Bringing together a host of influential leaders from across the Channel Islands to share their views and insights, you can read all the key points from the discussion from page 12.

One main message delivered was that the Channel Islands certainly have the chance to seize a sizeable chunk of the ESG market. As one panellist commented: “There is a significant addressable market for sustainable finance that the Channel Islands must be ready to capture. Failure to do so will

undermine the credibility and relevance of our industry. The key advantages we see of the Channel Islands as jurisdictions of choice for sustainable finance are interoperability, efficiency and credibility.”

Our article starting on page 54 of this issue highlights a specific opportunity for Channel Islands firms – the ease with which they can support European investors.

The theory is that, because they are ‘market-neutral’, the islands offer financial services businesses the opportunity to be compliant in multiple jurisdictions.

“The neutral position around disclosure standards is helpful,” a specialist in the article points out. “Jersey and Guernsey robustly ensure there’s no greenwashing, but the islands aren’t aligned to particular standards. There is a flexibility for managers to align with SFDR if they are marketing to European investors, or to use another taxonomy that works for the UK or elsewhere.

“Managers are grappling with many different divergent regimes, so having a single structure in Jersey that’s compliant with multiple regimes is more efficient.”


Of course, it’s not all plain sailing. ESG also comes with its challenges – and many of those have been well documented, such as greenwashing, whereby firms over-promote their ESG credentials, often resulting in negative press and fines.

Our article on page 38 discusses a new iteration of this – ‘greenhushing’ – where businesses actively play down elements of their ESG activity because it might draw attention to less positive activities in other parts of their operation. As our article finds, the risks of being caught acting in such a way are impactful. That’s pushing many firms to more actively address their ESG credentials. But progress can be slow.

Elsewhere this issue, we explore other risks facing firms – such as ESG’s incompatibility with fiduciary; challenges with measurement and what ESG ‘truly’ is; and issues around Article 9 classified funds.

Overall, the message around ESG is clear. While these three little letters offer great opportunity for firms in this sector, they also present concern in the form of an equally important four-letter word: risk. n May/June 2023 3 Welcome
With a projected compound annual growth rate of 12.9%, ESG assets are on pace to constitute 21.5% of total global AuM in less than five years



+44 1534 615886


Carl Methven


Jon Watkins


Angela Lyons


Kate Wheal




6 News

Recent developments in Jersey and Guernsey

10 Appointments

Top-level job changes across the islands

14 roundtable

Five Channel Islands leaders discuss the trends and ongoing evolution of ESG and what the future might look like


The BL Global Discussion Forum

20 biodiversity

Awareness is building that nature loss may have as big an impact on the planet as climate change. So how can financial services help?

28 measurement

The proposed Sustainable Disclosure Requirements are likely to be key to the future of ESG investment

34 fiduciary ESG is starting to underpin high-net-worth plans, but are these entirely compatible with fiduciary duty?

38 green credentials

Far from overstating their green credentials,

some firms are actively playing down their reporting for fear of unwanted attention

44 measurement

Has ESG measurement across organisations become more about hype than real progress towards net zero?

50 funds

There’s been a mass relabelling of Article 9 funds as Article 8 – so how is all of that working out?

54 european funds

Environmental, social and governance investing – once an outlier – has come to dominate financial services

The knowledge Cannabis in numbers, Deborah Meaden in profile, how best to resign, and much more

Follow us @blglobalnews



Following a spate of greenwashing scandals, David explores ‘greenhushing’ – a new trend that’s seeing some firms play down their reporting for fear of drawing unwanted attention.


The mass reclassification of Article 9 funds into Article 8 has been branded the ‘Great Reclassification’. Sophie explores what it all means for the future of funds.


David, meanwhile, asks whether the current measurement of ESG across different organisations has become more about marketing hype than real progress towards net zero.


And Marco examines how Sustainable Disclosure Requirements will likely be integral moving forward – but warns implementation won’t be without its challenges. may/june 2023 5 Contents
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in the NEWS


The International Stock Exchange (TISE) has launched TISE Private Markets – a service giving unlisted companies access to an integrated set of electronic trading, settlement and registry solutions.

The key characteristics of TISE Private Markets are:

• Companies have full control of their dedicated market, from approving and onboarding shareholders to scheduling auction events and managing registers.

• The auction model, using proven trading technology, concentrates liquidity, enhances price discovery and reduces price volatility.

• Pre-funded orders mitigate counterparty risk and facilitate seamless electronic settlement of cash and shares, which don’t have to be held in a depository.

• Existing shareholders of the company have first right of execution in an auction, with approved new shareholders only able to participate in any new surplus.

• There is a single annual subscription fee for the service and no intermediary charges, transaction fees or other commissions.

Private markets comprise investments in assets not traded on a public exchange or stock market. According to McKinsey’s Global Private Markets Review, total private markets assets under management reached $11.7trn as of 30 June 2022, growing at an annual rate of nearly 20% since 2017.

TISE CEO Cees Vermaas (pictured) commented: “We have conducted significant

market research to develop this offering, which we believe will be a particularly attractive alternative for privately owned SMEs considering means to improve the liquidity of their shares and attract potential new investors.

“We believe it could also be used by other privately owned structures. Given the depth and breadth of the funds industry in the Channel Islands, we are keen to explore how TISE Private Markets could have an application in the funds sector.”


Crestbridge has published the results of a survey looking at the challenges facing the alternatives fund management industry.

The Crestbridge Alternative Managers’ Mood Index revealed that the hot topics for investors during the fundraising due diligence process were cybersecurity (71.43%) and ESG (57.14%), as reported by fund managers from a crosssection of alternative asset classes who participated in the survey.

Alex Di Santo, Global Head of Private Equity for Crestbridge, said: “With the increased use of technology in the industry, fund managers are taking steps to protect their data and systems from cyber threats and are expecting their business partners to do the same.

“Similarly, ESG continues to be a key consideration for investors and fund managers must be able to demonstrate increased commitment to ESG in order to attract and retain investors.”

Compliance and regulatory support was a concern for 46.15% of the respondents. But the biggest internal ▼

Done Deals

Collas Crill has taken part in a landmark IPO of a Guernsey collective investment scheme. Onward Opportunities Limited (OOL) is a newly incorporated Guernsey company registered with the Guernsey Financial Services Commission as a closedended registered collective investment scheme. OOL sought Guernsey legal and regulatory advice from Collas Crill on its formation and regulatory approval, and latterly on its successful admission to trade on the London Stock Exchange’s Alternative Investment Market. OOL, managed by Dowgate Wealth, will invest in smaller UK companies to support their growth. It is thought to be the first new LSE-listed fund to IPO since 2021, and is the largest AIM IPO of 2023 so far. The Collas Crill team was led by Gareth Morgan, Group Partner in the firm’s Guernsey Corporate, Finance and Funds division.

The Aztec Group has supported growth capital firm Highland Europe on its fifth fund, which closed after raising €1bn. Aztec Group has been administering Highland Europe’s funds since 2012. In addition to supporting the close of Fund V, Aztec will provide fund administration services to Highland Europe from its offices in Jersey, Luxembourg and Southampton. Highland Europe invests in and supports European technology and software companies. In total, it has raised €2.75bn.

Alter Domus (Guernsey) has supported Norway-based private equity investor Longship with the first and final closing of its Longship Fund III. Following its fund administration role on Longship Funds I and II, the Alter Domus fund services team has worked with Longship and its advisers to deliver this closing. With commitments raised of NOK2.1bn, Longship achieved the hard cap in less than four months, with strong demand from institutional investors, including a 100% re-up rate from existing Longship investors. The Alter Domus team comprised Country Executive Tom Amy, Senior Managers Jordan Smith and Sarah Lacey and Manager Raitis Darags.

Ogier in Jersey has advised City Developments Limited (CDL) on the acquisition of four student accommodation developments from Harrison Street Real Estate for £185m. Working with English counsel at Herbert Smith Freehills, Ogier acted on all Jersey elements of the deal, in which CDL bought assets in Birmingham, Canterbury, Coventry and Leeds. Ogier’s legal and corporate administration teams worked together on the transaction. The legal team was led by Partners James Fox and Richard Daggett, assisted by Senior Associate Alex Fisher and Associate Marcela Tudose. The corporate administration team was led by Director Lawrie Cunningham, assisted by Manager Jonny Falle. n

6 may/june 2023
Talk to us about Financial Planning, Advisory Services and Global Investments. Alongside your everyday banking. Ask in-branch or visit Please remember that the value of investments, and any income received from them, can fall as well as rise, is not guaranteed and you may not get back the amount you invested. Fees and charges may apply. Financial and other eligibility criteria apply. Issued by HSBC Bank plc, registered in England and Wales number 14259. Registered o ce 8 Canada Square, London, E14 5HQ. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. HSBC Bank plc, Jersey Branch is regulated by the Jersey Financial Services Commission for Banking, General Insurance Mediation, Fund Services and Investment Business. HSBC Bank plc, Guernsey Branch is licensed by the Guernsey Financial Services Commission for Banking, Insurance and Investment Business. In the Isle of Man HSBC Bank plc is licensed by the Isle of Man Financial Services Authority. © HSBC Bank plc 2023. All Rights Reserved. The good life? There’s always room for improvement.

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Rialto Investment Partners has acquired chartered accountancy practice ICN Toole & Co and trust company specialist Dumaresq Secretaries. They were acquired from Directors Catherine Day and Denis Thérézien, who remain in the businesses, and will form part of Purpose, which Rialto bought last August. A new brand will be developed later this year as the businesses merge.

Rathbones Group and Investec Wealth & Investment are to merge, creating a £100bn UK discretionary wealth manager. The enlarged group will remain under the Rathbones brand. On completion, Investec will have an economic interest in Rathbones’ share capital of 41.25%, with Investec’s voting rights limited to 29.9% of Rathbones’ voting rights. The deal includes Investec’s wealth and investment businesses in the UK and Channel Islands but not Investec Bank (Switzerland) or Investec Wealth & Investment International.

Amalgamated Facilities Management (AFM) chief executive Victoria McEneaney and the MDs of AFM Guernsey and AFM Jersey – Vince Smith and David Webb respectively – are planning a management buyout. This would transfer full ownership of AFM away from Garenne Construction Group, which has been placed into liquidation having been found to be insolvent.

Stonehage Fleming has completed its acquisition of the business and assets of Rootstock Investment Management, an investment firm based in South Africa. Rootstock’s Worldwide Flexible Fund has been rebranded as the Stonehage Fleming Worldwide Flexible Fund, and its Global Equity Fund has been amalgamated into Stonehage Fleming’s Global Best Ideas Equity Fund.

Guernsey lending provider Tenn Capital has acquired Jerseybased Oaklands Secure Lending, which has rebranded to Tenn Capital. Tenn offers short-term loans secured against UK and international residential real estate. The transaction will give Tenn Capital a presence in both of the Channel Islands as it prepares to increase its lending activity.

TrustQuay and Viewpoint are to merge. Bringing together 12 offices including Jersey and Guernsey, the transaction will enable the businesses to scale up R&D, services and business development. The deal, subject to regulatory approval, is expected to close by the middle of this year. TrustQuay CEO Keith Hale (pictured) will be Group CEO, with Viewpoint CEO Rolf Heemskerk as Chief Information Officer. n

challenge faced by managers in running their funds is sourcing and retaining talent, with more than a third (35.71%) citing this as an issue for them.

The Great Resignation started in 2021 but managers indicate they are expecting this to be an issue through 2023.

Achieving operational efficiency was cited as a challenge by more than a fifth (21.43%) of respondents.

Other challenges mentioned included managing data for both the business and investors (14.29%), keeping up with technological innovation (14.29%) and regulation and compliance (14.29%).


Guernsey has climbed 12 places in the latest Global Financial Centres Index

Published by City of London thinktank Z/Yen, the Index provides evaluations of competitiveness and rankings for the world’s major financial centres.

Only Guernsey and Reykjavik rose 10 or more places in the rankings.

Head of Strategy and Sustainable Finance Stephanie Glover commented: “It is gratifying to see Guernsey perform so well in this evaluation. Despite the many unprecedented global challenges of recent years, Guernsey has remained a secure and stable jurisdiction for financial services.”

The report reviews five areas of competitiveness: business environment, human capital, infrastructure, financial sector development and reputation.

Western European centres performed well, with the ratings showing a high degree of stability and the average being just 0.18% lower than the last Index.

Guernsey showed an above average uplift, with an increase of 17 points.


Jersey has been included in the UK’s agreement with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – a multilateral trade partnership between 11 countries – for the trade in goods.

This will provide Jersey businesses with access to new markets and business opportunities when the agreement comes into force.

There is also the opportunity for the services-related chapters of the CPTPP to be extended to Jersey at a later date.

The CPTPP is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Since its departure from the European Union, the UK government has been pursuing a wide range of trade agreements with countries around the world, some of which already include Jersey, such as Australia and New Zealand.

The Assistant Minister for External Relations, Deputy Ian Gorst (pictured), commented: “The CPTPP is one of the largest trading blocs in the world, with the 11 signatory countries representing 13.4% of global gross domestic product.

“The extension of the CPTPP will provide our businesses with opportunities to access new markets as well as raising the profile of our island across this trading partnership.”

Following the announcement that an agreement in principle has been reached, the necessary legal checks will be made and a formal signing ceremony held at a later date. n

8 may/june 2023
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Lancaster Guernsey has named John Taylor as its Business Development Consultant. John will focus on the Gulf Cooperation Council countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – where he has contacts with families and financial services intermediaries. His 25-year career has included posts for KPMG and Grant Thornton in London. In 2012 he relocated to Bahrain, where he spent a year with EY and five with Charles Russell Speechlys, before moving to Dubai. He returned to London in 2020 and joins Lancaster Guernsey after a period with Future Solutions Group as CEO.

Julia Chapman has joined the board of The International Stock Exchange Group as a Non-Executive Director. Julia, based in Jersey, has more than 30 years’ experience in investment funds and capital markets. Having trained with Simmons & Simmons in London, she moved to Jersey to work for Mourant du Feu & Jeune. She became a Partner in 1999, then General Counsel to the firm’s fund administration division. Following its acquisition by State Street in April 2010, Julia was appointed European Senior Counsel within State Street. In July 2012, she left that business to co-found Altair Partners.

Highvern has expanded its Jersey funds team with the appointment of Gail Atamosa as a Fund Director. Gail has in-depth expertise in the delivery of administration, loan servicing and financial reporting services to funds across various jurisdictions. She joins Highvern after nine years with Sanne, latterly as a Director. Her earlier career included senior roles with PwC, KPMG Channel Islands and BNP Paribas Securities Services. In her new role, Gail will be responsible for a portfolio of fund structures and maintaining client service standards.

Stonehage Fleming has appointed Sarah Bartram-Lora Reina as a Trustee Director in its Jersey Family Office division. Sarah has more than 30 years’ experience in financial services, covering retail, private and investment banking, as well as trust and corporate services. She joins Stonehage Fleming from Ocorian, where she has been an Executive Director for two years. Prior to this, Sarah was a Client Director at Zedra (formerly Barclays Private Bank and Trust Company), having started her career with EFG in 2005 and then Barclays Wealth in 2008. She is also President of the Jersey Association of Trust Companies.

Bedell Cristin has promoted Rob Fullman (pictured) to Partner in Guernsey. Rob, who joined the firm in 2022 after 19 years with Babbe, has more than 20 years’ experience in general and commercial litigation. He is a specialist in debt recovery and has extensive experience in judgment enforcements. Rob qualified as a Solicitor in 1996 and was admitted as an Advocate in Guernsey in 2002. Also in the Guernsey office, Tendai Gakanje has been promoted to Senior Associate in the financial services law team. Tendai joined Bedell Cristin in 2020, having worked as a lawyer in Zimbabwe, where she qualified as a solicitor.

Kroll has promoted Ed Shorrock to Managing Director of its Jersey office. Ed, who has been with the firm for more than six years, has a strong track record of client delivery on due diligence and regulatory support matters. His accountancy career began in 1994 with Arthur Andersen, and he went on to hold senior roles at Liberty Ermitage, Deloitte and Baker & Partners. Kroll says Ed’s appointment will enable its Jersey office to focus on expanding support for customers around restructuring and insolvency services, valuations and litigation issues.

10 march/april 2017 News

Collas Crill has named Pamela Doherty as Jersey Managing Partner. Pamela is an Advocate of the Royal Court of Jersey and a Partner in the property team at Collas Crill. She has extensive experience in residential and commercial property work. Prior to joining the firm in 2017, Pamela spent more than four years with Mourant in Jersey as Counsel. She started her career with Scottish law firm DWF Biggart Baillie and went on to spend more than seven years with Pinsent Masons in Glasgow. Pamela takes over as Managing Partner from Nuno Santos-Costa who is stepping back from his management roles to focus on client and court work.

Jersey family law firm Myersons has appointed Advocate Jamie Orchard as Partner. Jamie specialises in high-net-worth divorce matters and has broad experience in family law, with a focus on complex financial issues. After qualifying in the UK, Jamie was admitted as an Advocate in 2012. Since returning to Jersey in 2009, he has predominantly dealt with family law work, including public and private children law matters. Prior to joining Myersons, he spent eight years with Viberts, latterly as Partner. His earlier Jersey career included two years with Le Gallais & Luce, as well as three with Davies & Ingram.

Apex Group has appointed Alice Read as Country Head, Jersey. Alice joined Apex in 2021 as Commercial Director, focused on the commercial development of the firm’s corporate solutions service line globally and strengthening client relationships. She previously held roles with Intertrust, as Director of Corporate Services in Jersey and Managing Director in Dubai. Her career started with HSBC in 2008. She worked at Appleby, before moving to Dublin with Experian and Walkers. Alice is a recent graduate of Apex Group’s Women’s Accelerator Programme

Mourant has promoted two members of staff to Partner – Sandra Duerden (pictured), a member of the Guernsey litigation practice, and James Daniel from the Jersey-based finance and corporate practice. Sandra joined Mourant in 2006 as a paralegal and since qualifying in 2010 has specialised in commercial litigation and contentious trusts disputes. As an Advocate, she has a particular interest in cross-border disputes or those with international law aspects, as well as insolvency and regulatory matters. James started his career at Mourant in 2008 and now focuses on banking and finance law.

Altum Group has appointed Baroness Helena Morrissey as its Group Chair. Helena has extensive financial services experience and has served in leadership roles including 15 years as CEO of Newton Investment Management. She was Chair of the Investment Association from 2014-17 and is currently Chair of FTSE250 firm AJ Bell and insurer Fidelis. In 2010, she founded the 30% Club, a campaign for better genderbalanced boards, and chairs the Diversity Project in the investment industry. Entering the House of Lords in September 2020, she was appointed a Dame in 2017 for her work on improving diversity in financial services.

Suntera Global has recruited Kathryn Wilkinson as Head of Operations. Kathryn brings to Suntera more than 25 years’ experience in international financial services, spanning compliance, change management, risk and governance across the banking and investment fund sectors. Prior to joining Suntera, Kathryn held the position of Director of Central Operations at the Jersey Financial Services Commission. Her earlier career included 12 years with RBS, senior roles with Standard Bank and Barclays Wealth, and more than eight years with State Street. march/april 2017 11 News

Leaders debate: the ESG challenge


Mirek Gruna , Chief Commercial Officer, Jersey, at IQ-EQ: Mirek has more than 18 years’ experience in financial services, with a focus on working with institutional as well as private investors to implement and oversee the governance structures for their international investments. As well as being an expert in client service delivery, he is well versed in organic growth, new client acquisition and jurisdictional expansion.

Dipak Vashi, Senior Manager, Business Advisory, at Grant Thornton (Channel Islands): Dipak has been a frequent commentator in the media on sustainability matters, as well as appearing in webinars, videos and at external events and panels to promote the importance and urgent need of recognising sustainability within business models. He has engaged widely with the UK government via expert panels and consultation responses, to attempt to shape policy to ensure business leads the transition into a sustainable future.

Ian Corder, Director of Standards and Operations at ESI Monitor – FutureTracker: Ian is a Chartered Environmental Manager with expertise in modelling, forecasting, metrics and audit/ improvement. He has experience in infrastructure, engineering and agri-food sectors, and in lifecycle cost assessments, carbon modelling, value-chain management, business sustainability and productivity improvement. Ian has an MSc in Environmental Management and a BA in Land Economy. He has worked for the WWF and the UK Environment Agency, and is a member of the CIWEM Climate Change Network.

Ali Cambray, Director at PwC Channel Islands: Ali leads ESG, sustainability and net zero services, working with government, corporate and financial services clients on strategy, business integration and reporting. She has 25 years’ experience of sustainable development policy, planning and financing. She is a member of the Jersey Finance Sustainable Finance Steering Committee, Vice Chair of the Jersey Association of Sustainability Practitioners and recipient of the inaugural Jersey Finance Sustainable Finance Leadership in Professional Services Award.

Matt McManus, Managing Associate at Ogier: Matt is an investment funds and regulatory specialist in Ogier’s Investment Funds team in Jersey. He is also a member of the Jersey Finance Sustainable Finance working group and part of the Government of Jersey’s Sustainable Finance Ambassador Group.

ESG trends
ESG continues its march through the financial services and investment spheres, we invited five Channel Islands thought leaders to discuss the key trends and ongoing evolution of ESG – to set out what the future might look like
12 May/June 2023
The panel of experts

ESG has been growing rapidly in significance in recent years. Do you see this focus on ESG continuing to dominate corporate conversations, especially in the world of finance, as we move forward?

Mirek Gruna, IQ-EQ: There is no doubt that the ESG discussion is here to stay. What is now quite clear is that not only are large conglomerates with multibillionpound balance sheets taking the lead, but more increasingly smaller businesses are also doing so. I think attention is now being given to the full spectrum of ESG, which is great news, whereas previously the letter S had been slightly neglected while the main focus was on environmental and governance issues.

Dipak Vashi, Grant Thornton: I agree the focus on sustainability and wider ESG issues will only continue to grow in prominence. This will be driven by two factors. The legislative agenda is rapidly changing, with hard-hitting regulation such as the Corporate Sustainability Reporting Directive (CSRD) and Sustainable Finance Disclosure Regulation (SFDR) coming into play in the EU, and the Sustainability Disclosure Requirements (SDR) in the UK.

Moreso, general corporate reporting disclosure is becoming mainstream. Taskforce for Climate-related Financial Disclosure (TCFD) reporting is now mandatory in many countries, and the International Sustainability Standards Board (ISSB) is releasing standards in June 2023, with adoption in January 2024. The Securities and Exchange Commission (SEC) also expects to release this summer.

Further down the track, the Taskforce on Nature-related Financial Disclosures (TNFD) standards are expected to be released in September.

However, stakeholders are also driving this change. Many are now under pressure to secure their value chains and client bases, to ensure they are only doing business with those who are fit for purpose. Expect this to become a board-level risk item, if it isn’t already.

Ian Corder, ESI Monitor: I think there will continue to be a very strong focus on ESG, and that practice will start to mature and hone in on transparent data, including whether or not companies are really changing to fit a low-carbon, sustainable economy.

Analysts and activists have increasingly smart toolsets and powerful platforms to monitor companies and call out bad

practice, and customers and employees are also increasingly unwilling to work with greenwashing companies.

Plus, as Dipak has set out, legislators have signalled they are becoming increasingly tough on regulation and enforcement. So companies need to be aware of their responsibilities and proactive in discharging them.

Ali Cambray, PwC: It’s a business and societal imperative. Our research shows 55% of global GDP is exposed to material nature risk without immediate action. The pace and scale of transformation required across all sectors to address the energy transition, the ecological crisis, rising inequality and the just transition this decade means this agenda is now more critical and relevant than ever.

ESG is now the major driver of transformation for business and finance. PwC’s recent global research report, Asset and wealth management revolution 2022: Exponential expectations for ESG, projects more than $33.9tn in ESG-oriented AuM by 2026, outpacing growth in the asset and wealth management market as a whole.

This is clearly being driven by investor demand, with more than 80% of US and European investors planning to increase their allocations to ESG products over the next two years.

Matt McManus, Ogier: As others have stated, it absolutely will continue to dominate conversations. ESG considerations are now enshrined within the regulatory sphere, creating an obligation on fund managers and other financial market participants.

But it’s important to remember that this has been driven by investor demands for reliable disclosures and data around the May/June 2023 13 ESG trends
Analysts and activists have increasingly smart toolsets and powerful platforms to call out bad practice

impact of investments on ESG and climate change in particular, and on related risks.

In turn, that is a response to recognising the risks facing the planet and the needs of communities around the world – and recognising that deployment of capital is key to mitigating those risks and creating positive impact.

There are currently signs that the well-publicised economic/market conditions are leading investors to attribute slightly less importance to ESG considerations. But, long-term, the focus on ESG will certainly continue.

Do you think firms’ – and the sector’s – ability to demonstrate ESG credentials and their commitment to ESG is still being hampered by the lack of a recognised, single universal international measurement framework?

Mirek Gruna, IQ-EQ: Since ESG is a very subjective term, there remain many interpretations. The EU taxonomy rules and SFDR have certainly helped, but again these are used in a stricter sense.

My view is that some form of global measurement framework should be available to achieve a level playing field –especially in a macroeconomic sense – so that the huge disparities between nations on the fulfilment of ESG commitments can be remedied.

Dipak Vashi, Grant Thornton: The purpose of the ISSB’s birth was to provide a

global, uniform baseline for sustainability reporting after complaints from users that comparability is impossible.

The board has been shy in stating that its standards are modelled on the existing TCFD, and are aiming to solve this problem. I have faith the standards will do this, and that jurisdictions will adopt and mandate them rapidly.

As users get more comfortable with sustainability-related disclosure, and preparers progress in streamlining their systems and reporting processes in order to produce quality disclosure, I believe we will see a global convergence.

It is important to remember that while the principles of financial accounting date back to the 1400s, sustainability reporting is brand new. But we will get there.

Ian Corder, ESI Monitor: I don’t actually think a lack of frameworks is a legitimate complaint. There have been very widereaching ‘frameworks’ for many years now – GRI was launched in 2000, CDP in 2002, SASB in 2011. And, of course, the IASB is imminently going to bring sustainability reporting together under the accounting professionalism.

I don’t consider CSRD to be a framework, it is primarily a regulation. Some regulations are prescriptive like frameworks, some are not – although regulation may refer to and incorporate frameworks such as TCFD.

There will always be somewhat different levels of regional/national regulation, but

where possible I hope they will refer to well-respected international frameworks and standards in order to maximise compatibility.

It is always difficult to predict the progress of regulation as it often depends on political influences, which can change things at the last minute. It often gets diffused and watered-down through the legislative process as well.

However, the direction of travel by the EU (CSRD, CBAM, Taxonomy) and the SEC in the US seems to be a trend for more prescriptive disclosure rules, rules against unsubstantiated or false sustainability claims (greenwashing) and in some cases taxation/market adjustment mechanisms (such as CBAM).

I hope that mandatory disclosure will be recognised as only one tool in the regulator’s armoury, as I do not believe it is always the most effective way of driving positive behaviour and correcting market failure.

Ali Cambray, PwC: Our research suggests investors believe regulatory standards provide a useful basis for due diligence on investment strategies, with 71% of institutional investors in favour of strengthening ESG regulatory requirements for asset managers.

Proportionate regulation, assessment and disclosure frameworks have a key role to play. What we need is a system that prevents greenwashing, addresses urgent climate and nature risks, supports investor demands for credible and comparable sustainable financial products, and most importantly enables large-scale reallocation of capital to social and environmental objectives and impacts. Otherwise we’re just creating processes for no benefit.

The long-term direction of travel remains towards financial-grade non-financial information, prepared on a consistent and internationally comparable basis.

That said, I also agree the scale and pace of change, the regulatory context and data challenges mean that regional differences will likely persist for some time. That is where jurisdictions such as the Channel Islands can position themselves helpfully for interoperability.

Matt McManus, Ogier: The trend will certainly continue to be towards regulatory alignment, but there aren’t international regulatory codes in many areas – so it’s hard to see a global framework being adopted on this thorny issue.

It’s challenging for a manager looking to promote funds to a global investor base, as they will be subject to different requirements and expectations depending on where their investors are located.

By establishing funds in Jersey it is possible to structure these as Article 8 or Article 9 funds and market to investors

14 May/June 2023 ESG trends

where the SFDR applies, but also to apply different standards where mandated elsewhere. This is made more efficient if there is a common fund structure and management and administration framework in our jurisdiction.

We have seen a huge reclassification in the last year, with around €150bn moved out of Article 9 and into Article 8, as firms and investors struggle with the data and reporting requirements. Is Article 9 simply unworkable?

Mirek Gruna, IQ-EQ: A potential issue for me is one of credibility – if a large institutional investor has invested as part of its own asset-owner strategy into an Article 9 fund, then it would be difficult to stay in the fund if it is now classified as Article 8. Clearly, the reporting framework is something that doesn’t help if it is not consistently applied or if the funds are not getting proper and clear guidance on the interpretation.

Dipak Vashi, Grant Thornton: I think firms are beginning to realise that to be compliant with Article 9 requires a complete overhaul of how you do business – not just at the product level, but across the entire entity, its daily operations, decision-making and business strategy. This must be pushed down from the board, and it takes time. Therefore, firms that initially thought they would meet the dark green requirements are maybe taking the time to reassess their strategy, and deciding to be light green in the interim.

It is too early to suggest Article 9 is unworkable in my view, but the market has realised the requirements are very difficult to achieve. That does not mean the market should give up a credible antidote against the threat of greenwashing.

Ian Corder, ESI Monitor: I don’t know if Article 9 is unworkable as such, but it should of course be a high bar to reach. So a reclassification itself is not necessarily a negative thing if funds cannot demonstrate they reach that level.

Companies that understand their own operations, data and exposure will perform better – in sustainability and everywhere else. Companies now have a responsibility to understand and reveal their participation in sectors that have a high risk of causing environmental or social harm.

This may be discomforting to some investors who see themselves as passive, amoral actors, but they need to understand that how their role is viewed has changed.

Ali Cambray, PwC: This reclassification was always expected to an extent – as the SFDR beds down and firms develop their understanding of the implications of implementation and disclosure.

Most Article 8 and 9 funds to date are repurposed, but our research indicates that this will shift in the next few years to the creation of new funds, for which data and reporting systems can be set up from the start, arguably easier than retrofitting. Data is always a challenge but data collection, systems and analysis are improving all the time. The bigger picture is more important. Over time, we expect SFDR and similar regimes in other jurisdictions to collectively help increase finance allocations for sustainable objectives, and that needs to be the measure of success.

Matt McManus, Ogier: My view is that managers are aware of the risks of falling foul of these complex regimes and will be

weighing these up against their strategic aims in fundraising.

A number of big firms, including some of the world’s biggest banks, have been hit by greenwashing accusations and even fines. Do you think greenwashing is prevalent in some parts of the industry? And do you think these cases may lead to greenhushing (firms actively playing down some elements of their ESG credentials to not draw attention to other areas where they are perhaps underperforming)?

Ali Cambray, PwC: It is clear that firms must be able to back up their claims with evidence in order to provide confidence and transparency to investors and wider stakeholders. No part of the industry is immune to this, and it is important the relevant regulators exercise their powers where appropriate.

No firm is perfect on all ESG factors, and indeed a strategic approach requires identification of material factors as a first step, from both a risk and impact perspective.

We encourage our clients to think of disclosures and reporting as an opportunity to reimagine the story they want to tell to their stakeholders. Several of the disclosure frameworks encourage an explanatory approach based on the concept of materiality, setting out progress to date, challenges and intended next steps. This is generally welcomed by investors and regulators alike.

Dipak Vashi, Grant Thornton: The market and regulator have designated greenwashing as one of their biggest May/June 2023 15 ESG trends
The long-term direction of travel remains towards financial-grade non-financial information

concerns, consistently, hence the application of tough standards such as the EU Taxonomy, SFDR and incoming SDR. Because of this, strong action needs to be adopted to convince all stakeholders against the threat of greenwashing.

Recent cases of this behaviour do damage the reputation of the industry, but it is not always clear whether this is due to deliberate misappropriation of the terms or a lack of understanding.

As the industry gets to grips with standards, I believe these concerns will ease.

Ian Corder, ESI Monitor: I doubt that greenwashing accusations cause a chilling effect in voluntary disclosures. Companies should be clear on what sustainability statements and claims they can make, in exactly the same way that they would not make misleading or questionable statements about product performance or their accounts.

If well publicised greenwashing cases make companies more careful about the validity of their claims, that is generally a good thing.

ESI Monitor’s platform FutureTracker helps companies make clear, unambiguous and data-driven disclosures as part of their wider sustainability change programmes, as well as upskilling, educating and empowering their staff to recognise and avoid greenwashing.

Mirek Gruna, IQ-EQ: The challenge for the biggest banks and large multinational businesses is that their supply chains are so complex that it may be genuinely impossible to adhere to all their ESG commitments – and subsequently retain their ESG credentials.

The question is one of the supremacy of profit and shareholder return versus

stakeholder engagement – especially when the stakeholders are negatively impacted by the businesses not adhering to the agreed ESG standards.

Recent asset and wealth management research predicts global ESG assets will increase to well over 20% of total AuM by 2026. As investors increasingly look to consider ESG, what standards are they most commonly benchmarking against?

Dipak Vashi, Grant Thornton: ESG assets will move from a ‘nice-to-have’ to an absolute essential in all investment portfolios, and quickly. With no current global baseline in place, it is difficult to place a defined benchmark now, but this will undoubtedly come as standards mature.

Investors are rapidly realising that ESG investments give them the best chance of long-term sustainable returns, and this adoption will gather pace.

Ian Corder, ESI Monitor: Most investors looking for an attractive ESG investment will be seeking something that already fits into their investment philosophy and risk/ return profile, but which meets a certain threshold of ESG credential if they are simply making a go/no-go decision. They may have a very simple strategy that

involves only picking certain indices or from investments rated at certain levels by analysts such as Sustainalytics.

Other investors will consider holding lower ESG quality investments if they believe they can influence those investees to become more sustainable. We have seen successes of some activist investors such as Engine No.1, which managed to replace several board members at ExxonMobil to try and encourage the company to follow a more sustainable strategy.

And other investors are seeking positive impact – the investment will make the world a better place – and may be prepared to sacrifice returns to achieve it.

Where investors are purely investing in the securities of listed companies, ESG data may be widely available and easily interpreted within a portfolio.

However, in many other cases, the investor will need to acquire more detailed data on the sustainability credentials of an investment before making a decision.

Ali Cambray, PwC: Broadly, EU SFDR Article 8 has been the benchmark for ESG-oriented funds. However, that will likely change as the new UK and other regimes come into play.

If you look at the financial risk exposure potential and the focus of policy and regulation, a proportionate application of the TCFD framework for

16 May/June 2023 ESG trends
Think of disclosures and reporting as an opportunity to reimagine the story you want to tell stakeholders

climate risk management is increasingly expected as standard.

Understanding ‘financed emissions’ –the emissions associated with portfolio financed economic activities – is becoming increasingly important, in particular given the requirements for banks and larger asset managers to develop net-zero transition plans this year and how we expect that to flow through the value chain.

Hot on the heels of integrating climate action are workforce metrics and standards (gender pay gap, inclusion and diversity, employee engagement) and nature risk (through the forthcoming TCFD).

For alternatives, the industry-led ESG Data Convergence Initiative is a helpful place to start.

In your view, how well positioned are the Channel Islands to deliver for ESG-conscious investors – and what evidence is there that our jurisdiction is at the forefront of the ESG drive?

Mirek Gruna, IQ-EQ: I believe the Channel Islands have a unique opportunity to be at the forefront of the ESG agenda. By their own nature as islands, Jersey and Guernsey need to carefully focus on the preservation of their own nature, resource, as well as human capital and their own reputation, and we have been doing this successfully for some time. We can demonstrate that approach in the financial services we provide to green funds, investors and corporates.

Dipak Vashi, Grant Thornton: The Channel Islands have been at the forefront of legislative change and a dynamic approach to governance and quality for many years, which is why Jersey and Guernsey are leading international finance centres. There is no reason to suggest the status of both islands should change now.

The various island stakeholders are all in agreement that ESG is a top-tier issue to solve. What must happen next is for both public and private bodies to agree on an approach to not only tackle the issue, but seize the opportunities arising from it. We possess the experience, skill, quality and energy required, and a co-ordinated approach now needs to be adopted to maintain the excellent reputation of the islands going forward.

Ian Corder, ESI Monitor: I agree that in many ways the Channel Islands are well placed, with both Guernsey and Jersey being members of the UN Financial Centres for Sustainability (FC4S) initiative.

The jurisdictions clearly also have great experience and strength in financial services more widely, and have led efforts to create new products and regulatory approaches that can serve ESG-conscious investors, such as the Guernsey Green Fund. There are also specialist managers and service

providers located in the Channel Islands who can offer support in areas such as reporting in line with the UN’s Principles for Responsible Investment (PRI).

However, the ESG landscape is still developing and the Channel Islands will need to keep investing in a range of human, technological and regulatory resources in ESG in order to remain effective.

Ali Cambray, PwC: There is a significant addressable market for sustainable finance that the Channel Islands must be ready to capture. Failure to do so will undermine the credibility and relevance of our industry.

The key advantages we see of the Channel Islands as jurisdictions of choice for sustainable finance are interoperability, efficiency and credibility.

In terms of interoperability, the Channel Islands have long recognised the importance of enabling access to and ensuring equivalence between international markets, and are well positioned as enabling platforms facilitating access to products that meet a variety of investor sustainability preferences.

With fast-changing ESG disclosure regulations in different markets, it is increasingly important for funds to take a strategic approach to compliance and reporting in order to meet requirements most effectively.

For example, we are expecting further updates this year on how the FCA’s Sustainability Disclosure Requirements (the UK’s forthcoming product labelling regime, which is not directly equivalent to the SFDR) will apply to overseas products.

A Jersey or Guernsey neutral base supports a strategic multi-jurisdictional approach, and their agile and skilled financial services industries are well placed to provide support.

On efficiency, another advantage of using Jersey or Guernsey arises when a manager already has existing funds based here.

The same administrators can service both SFDR and non-SFDR products; thereby creating economies of scale that can lead to reduced costs, retention of institutional memory and time savings. This allows managers to use the Channel Islands as a one-stop shop for both SFDR and non-SFDR products.

As for credibility, centres for sustainable finance are only credible if they operate in a sustainable manner from a sustainable location. Both islands’ governments have made domestic commitments to net zero by 2050.

On a practical level, the grid carbon intensity of both islands’ electricity systems benefits from low-carbon electricity from France and is already roughly only a tenth of the UK’s current supply. And the transition to a green economy is already well under way on both islands.

Matt McManus, Ogier: I agree the Channel Islands are very well positioned. As I mentioned, it is possible to establish funds in Jersey that can be marketed, under national private placement regimes, as Article 8 or Article 9 funds where SFDR applies.

But by offering the flexibility to adopt different taxonomies, Jersey allows managers to adopt an approach that is potentially more strategic and streamlined.

In terms of the ESG drive in Jersey, you only have to look at the extent to which government and industry are working together to drive ambitions, not only of Jersey’s finance industry (to be recognised as the leading sustainable financial centre in the markets it serves) but also to ensure that in real terms the strong local commitment to net-zero transition is followed through.

The breadth and depth of representation on various working groups and initiatives from across Jersey’s finance industry are testament to how deeply folk want to use Jersey’s role as an IFC to ensure global capital flows contribute to global good. n May/June 2023 17 ESG trends
Managers can use the Channel Islands as a one-stop shop for both SFDR and non-SFDR products

How Natural Capital Funds can transform ESG investment

Examining the value of investments that aim to preserve and protect natural capital assets, promote sustainable practices, support renewable energy projects and conserve natural habitats

NATURE IS OF immense importance to our island communities – that much is clear. Never being far from the sea, we are blessed to live alongside such rich marine biodiversity. Nature is an asset we must protect, no matter the cost.

This is fast becoming the consensus in the local business community. Investors, from individuals to multinationals, are beginning to look squarely at the impact their investments have on the world around them, beyond making a simple profit.

They want their money to have purpose and seek to correct some of the damage caused to our ecosystems. These investors are recognising the value of natural capital, which includes any living or non-living natural element that adds value to society. This includes forests, fisheries, rivers, biodiversity, land and minerals.

But ESG – environmental, social and governance – involves more than simply

striving for net zero. It involves contributing to a just and fair society for all, setting the example of good corporate citizenship and conforming to a transparent, ethical code of governance. These are the hallmarks on which any modern organisation should model their business.

Quantifying ESG can be a difficult challenge. But the ability to collate and present good quality ESG data is becoming more and more important if we are to hold ourselves truly accountable. We can best manage what we can measure.

Likewise, the data challenges inherent in measuring different types of natural capital (such as seagrass or trees) across different jurisdictions present logistical challenges and challenges of comparability. The level of sophistication in measuring natural capital data is, however, improving.

There is growing pressure from regulators to fully incorporate ESG into

18 May/June 2023 Advertising feature
natural capital funds offer investors the opportunity to shape a sustainable future without compromising long-term returns

investment mandates, and knowing the most effective and appropriate way to do so can be a challenge in itself.

The blending of natural capital solutions into ESG strategies via Natural Capital Funds is one way to do just this – and achieve multiple goals at once.


Natural Capital Funds (NCFs) are a relatively new type of investment that align with ESG principles. They focus on those investments that aim to preserve and protect natural capital assets, promote sustainable practices, support renewable energy projects and conserve natural habitats.

At a time when ESG moves higher and higher up the regulatory agenda, NCFs offer investors the opportunity to make a positive impact on the environment. They can help them shape a sustainable future without compromising long-term returns.

Natural capital can seek to improve biodiversity, promote sustainable and equitable growth, while sequestering carbon and facilitating net-zero goals.

In late 2022, the Guernsey Financial Services Commission (GFSC) launched the Natural Capital Fund regime.

The Natural Capital Fund Rules (NCF Rules) require that investments seek a return through making a positive contribution – or significantly reducing harm – to the natural world.

The NCF Rules also require transparent benchmarking to international frameworks – and these include the UN’s and the EU’s biodiversity and sustainable development goals.

This helps facilitate the delivery of multifaceted goals of reducing carbon emissions, protecting or preserving nature loss, alongside seeking traditional financial returns.

In parallel to the above, the GFSC has issued guidance on anti-greenwashing. This outlines a clear expectation that the underlying assets are environmentally sustainable, not misleading, and are capable of being evidenced by the scheme or its service providers.

This is monitored both during the application process and through the ongoing supervision.

For its part, Jersey has so far opted not to introduce new fund products or labels targeted at specific ESG themes such as natural capital. Its regulator and

policymakers have instead focused on introducing a broad anti-greenwashing regime that applies across Jersey’s different categories of fund and investment business.

When introduced in 2021, this regime was the first of its kind in the Crown Dependencies. Its objective was to promote investor confidence in sustainable finance while giving asset managers flexibility to align their products to a full range of environmental and social objectives.

These pragmatic safeguards are coupled with Jersey’s extensive suite of fund types and structures, its comprehensive infrastructure and access where needed to list on exchanges such as the dedicated sustainable segment of The International Stock Exchange.

This all makes Jersey an attractive option for sponsors looking to establish ESG-focused funds – notwithstanding the absence of a specific NCF regime.


An NCF’s objectives should relate to its investment strategy and its positive contribution – or significant reduction of harm – to the natural world.

Under the Guernsey regime, in order to establish an NCF one must:

• Choose an existing fund structure

• Establish natural capital targets

• Set up a framework for monitoring, measuring, reviewing and reporting the fund’s progress against its targets. To also comply with NCF Rules, a scheme will need:

• Certification from an expert verifier

• Confirmation of compliance with the objectives

• Targets and monitoring procedures. In Guernsey, the scheme’s governing body is expected to seek third-party expertise for certification. However, in-house expertise is also acceptable in certain circumstances where strength and qualification can be evidenced to the GFSC. It is also worth noting that the GFSC will take appropriate action – in line with its statutory obligations – where scheme rules and investment claims cannot be properly verified.

If you are a company looking for an effective way of incorporating natural capital or ESG into your business strategy, or if you would like to understand emerging ESG regulations, please get in touch with a member of our team or visit n


KPMG helps clients reach their investment and ESG objectives. Our services aim to assist in the understanding of the criteria and objectives of Natural Capital Funds, as well as its day-to-day functioning.

We have a global team of experts with deep expertise of nature-related risks and opportunities, and are dedicated to sharing our knowledge of natural capital, naturerelated risk disclosure and responsible investment. We also work with leading standard developers and associations, including the Taskforce on Nature-Related Financial Disclosure (TNFD).

KPMG also helps clients identify opportunities to create additional value by incorporating ESG strategies into organisational behaviour, as well as providing guidance on global ESG standards, ESG disclosures and the impact of climate change on organisational supply chains.

We are committed to nature-positive action and we aim to reach carbon neutrality by 2030. May/June 2023 19 Advertising feature
The Natural Capital Fund Rules require that investments seek a return through making a positive contribution


of nature

Nature loss is less high profile than climate change but awareness is quickly building about the impact it could have on the planet. So how can the financial services industry help tackle this crisis?


Steve Falla

NATURE LOSS and biodiversity might not have quite the profile of ‘environmental concerns’, ‘ESG’, ‘net zero’ and other more commonly talked about sustainability issues – yet. But a biodiversity framework was agreed in 2022, and the link between biodiversity and finance was officially made at COP15 last December, highlighting the need to reroute $500bn of harmful government subsidies and put that capital to better use.

Biodiversity and nature loss is an issue that’s rising up the political, and boardroom, agendas.

Guernsey has launched the Natural Capital Fund framework, a concept designed to attract commercial capital committed to a more nature-positive world, while Jersey is developing a holistic coordinated roadmap for the future of green finance. But how do fund managers

and investors view this new tranche of environmental investing? Will it really play a part in protecting 30% of the earth’s lands, oceans, coasts and inland waters, as well as halving food waste, by 2030?

William Mason, Director General of the Guernsey Financial Services Commission, recognises that the widespread awareness of climate change was the springboard for nature loss and biodiversity to come to the fore. “A lot of environmentalists have thought climate change was a useful vanguard issue through which a lot of other environmental issues could flow –once a hole was broken in the ‘profit is a god’ defences historically put up by some business leaders,” he says.

Wayne Atkinson, Partner at Collas Crill, believes the intangibility of nature loss has meant it has previously been pushed to the back of people’s minds.

20 May/June 2023 Biodiversity

“With climate change, there are things you can very clearly do at home or in the office to make a difference,” he says.

“The loss of nature is a harder thing to deal with – it’s that little bit more conceptual and the immediate benefits of changed behaviours are not as visible. But I think we are starting to get the picture.”


If the government subsidies currently backing harmful practices are to be diverted to support more positive developments, two of the areas to tackle are scalability and short-termism, Atkinson believes.

“A lot of what people are working on are qualitative niche solutions. Slower, longer-term capital projects that require, for example, 10 years for trees to start producing nuts, are very different to planting in spring and getting some cash in autumn.

“Slow capital is a challenge and permanence of subsidy regimes is similarly a challenge. If I’m going to commit to something, am I going to still have that subsidy in five years’ time or is it suddenly going to become an expensive field that I’ve devoted to doing nothing?”

Paul Douglas, Managing Director of Accuro in Jersey, agrees. “For business to invest in those areas, one does need to take a long-term view; you can’t expect a shortterm return.

“That’s where finance can come in. In finance, there’s an awareness of the need to do this and it’s an awareness driven by the right ethos. And launching things like green products and green bonds is essential to accelerate that.

“There’s a need to inform society on these areas and make it aware of the disparity of government subsidies and the impact that is having on the cost of things like energy.”

Mason concurs that governments could have a part to play in encouraging naturepositive investment.

“If there is spare public money – an always doubtful claim – it can sometimes be usefully employed in blended finance to crowd in other investment,” he adds.

“Public funding can sometimes persuade others it is safe or worthwhile to invest in an otherwise economically marginal project.”

Atkinson says: “There are two aspects to it. One is that you stop funding bad; the other is how you start funding good. May/June 2023 21 Biodiversity
Capital projects that require 10 years for trees to start producing nuts are very different to planting in spring and getting cash in autumn

“A lot of the challenge around that is a scaling challenge, because it’s quite easy to scale less helpful practices. But biodiversity and nature protection is often a smallscale issue, particularly if you want to be a profit-making enterprise.

“Some examples have gone very well,” adds Atkinson. “Shade-grown coffee is a classic example where, through agroforestry, you can increase biodiversity while improving your crop. But can you roll that out to every crop?


Atkinson continues: “I was talking to someone in New York in 2019 who was running a seaweed farming cooperative in America that was doing very well. It was untapped, completely new and very naturepositive in that it was socially positive and was replacing the fishing industry, which was declining.

“It was allowing people to use their skill sets and the seaweed that they were harvesting was also creating a fish nursery that was rehabilitating the damage. But the extent to which you can scale that globally would require dietary changes.

“That said, there are definite wins – like black soldier fly reactors for waste facilities to generate protein to feed fish.”

Douglas suggests the focus should be on the cost of not making changes. “It’s

quite startling,” he states. “If the current temperature rates continue to rise as they currently are, global economic values will fall by 10% by 2050, according to a study by Swiss Re.

“So commercial capital has both an impact but also a reliance on nature.

Businesses that embrace this will flourish because as government and institutional capital moves towards these types of projects, if they are invested and their supply chains are invested in these areas of protecting and sustaining nature, it’s natural that they will survive – and those that don’t will not.

“The World Economic Forum did a study that showed that the market in sustainable goods rose by 71% in the past five years. Those figures speak for themselves. It’s supply and demand economics.

“Those firms that take a longer-term view will see that their capital will naturally survive and grow,” he adds.

“I’m a trustee and we hold assets for cross-generation members of families. And when we are deciding on holding assets, we are naturally going to think across those generations.

“As a group, we have put more than $2bn into sustainable ventures on behalf of our clients and because of the interest that’s there – and there’s a real hunger to

understand – clients are coming to us to ask us to help them learn more about the subject.

“Unfortunately, the investment community is quite often thinking about quarterly performance rather than longterm performance and that’s why certain of the managers taking a longer-term view are the ones that will likely do very well.


Atkinson continues: “There’s also regulatory uncertainty and policy uncertainty that needs to be ironed out, May/June 2023 23 Biodiversity
Public funding can sometimes persuade others it is safe or worthwhile to invest in an otherwise economically marginal project

because with the uncertainty, investors struggle to deploy capital to these projects. They need to know the regulation and policies are there so they can benchmark their investments and know that those are credible benchmarks that are internationally accepted – because investors think across borders, they think globally.”


As for Guernsey’s Natural Capital Fund Framework, launched late last year, there are promising signs of early interest.

Mason explains: “I was speaking at the Natural Capital Investment Conference in March and was approached by a firm that is exploring turning its fund into an NCF fund. So I’m positive about the future of this regime at present.

“We have had other enquiries, with people taking time to understand the concept, given it’s something of a world first, before embedding the COP15 standards, which were only agreed last December.”

Atkinson is also in discussion with a client about the NCF. “They were already on Guernsey and doing other things, and this was one of a number of opportunities that popped up for them. I think people do come to the island because they are hearing about the green finance regime,” he explains.

“Guernsey and Jersey have a lot to offer in this space because this is international stuff, so it makes sense to use an IFC as opposed to anchoring it in your home jurisdiction. It’s something we do well: custody of assets, making sure things

are set up properly. So we are well placed. But you need a few wins. Jersey has nicesized philanthropic ventures in this space. It’s the investment piece that both islands are looking to get to that next stage in.”

One thing that all commentators agree on, however, is that 30 by 30 – the commitment to protect at least 30% of land and sea by 2030 – may be optimistic.

“The challenge is making sure that it’s not just ‘any 30’,” says Atkinson.

“This is a global issue where we need to come together and really support those areas where there are these biodiversity hotspots – rather than being a little bit nimbyish and saying we’ve got to look after our bit. That is also important, but nature doesn’t respect international borders.”

Mason adds: “I don’t believe playing accounting games to get to 30 by 2030 is actually that helpful.

“I want to see public and private sectors stop treating nature as a free good to be despoiled and for it to be normal for everyone to take into account and preserve natural capital in all that they do. That way we will win for the planet.” n

Are Jersey firms at risk of assisting the laundering of proceeds from illegal wildlife trade?

With Jersey’s MONEYVAL assessment round the corner, authorities and firms in Jersey have been preparing for some time to demonstrate the robustness of Jersey’s AML/CFT arrangements.

One area subject to greater awareness is proceeds from green crimes. More specifically, despite billions of dollars (estimated by the FATF to amount to $7bn$23bn per year), generated and laundered from the illegal wildlife trade (IWT), few countries have focused on the financial aspects of this crime.

Is Jersey at risk of assisting in the laundering of proceeds derived from IWT? With many firms in Jersey operating as international organisations and as trust and corporate services providers, the answer may be yes. The laundering

methods used for the proceeds of IWT, and the geographies and industries involved, should be as much on the training agenda as red flags for tax evasion, fraud and terrorist financing.

Criminal proceeds from IWT need to be laundered to be of use to the

criminals. Methods often involve financial services and the setting up of cross-border companies.

Criminals take advantage of the differences in regulatory environments internationally when establishing and operating these companies.

Such companies, which may in part be legitimate businesses, are often used to co-mingle criminal and legitimate proceeds.

Companies used are often involved in international movement of goods (for example, plastics, timber or frozen foods) or in legal wildlife trade such as taxidermists, farms, pet shops and zoos. Other types of firms deemed at risk of misuse in this area include medicine, jewellery and fashion.

24 May/June 2023 Biodiversity
Credit: vanchai tan
regulatory and policy uncertainty need to be ironed out – with uncertainty, investors struggle to deploy capital to projects

Q&A: Technology and work

Sure Business Head of Enterprise Products Iain Davidson and Group Professional Services

and Product Director Joe McCusker discuss the latest trends around tech for business

EVERY BUSINESS IS digital in some way. It could be that all your meetings take place online, your files are all stored in the cloud, or that you simply use email as your main form of communication with your clients. No matter what industry you’re in, you will likely be having to use technology to do your day job.

In a fast-paced digital environment, it’s important to know what the latest trends are, and no one knows this better than the expert team at Sure Business.

We sat down with Iain Davidson, Head of Enterprise Products, and Joe McCusker, Group Professional Services and Product Director, to talk remote working, cybersecurity and more.

What do you think is the biggest change in the digital landscape in recent times?

Joe McCusker: The digital environment is reflective of our real-world experiences, so the changes brought about by the Covid-19 pandemic are undoubtedly the greatest we’ve seen in some time.

Just as society was changed almost overnight back in 2020, so too was technology. The pandemic accelerated digital transformation massively, and many of those changes are still with us now – like working from home and remote working.

Iain Davidson: Joe’s right, the flexibility around working now is a huge difference. However, I do think we’d have got here eventually. Hybrid and home working was around before 2020, it was just for

the select few: either management level or those working in IT who were comfortable with the technology required.

What are the challenges of hybrid working models for businesses?

Iain Davidson: Businesses of all sizes have spent years putting sophisticated protections in place and locking down their networks, and now they find their people are working on their home networks, which the business has no control over.

Understandably, home networks are not as secure as business ones so employers have to have a degree of trust in their employees’ setups.

Joe McCusker: When working in the comfort of your own home it’s completely natural that you feel more relaxed. That’s great and it’s not necessarily a bad thing, but it might mean you’re less vigilant than you would be at work as you’re in a different mindset.

Employers need to find a way to ensure that their employees remain alert to threats when at home just as they would be at work.

Are cyber criminals reacting to people working in different ways and from different places?

Joe McCusker: Cyber threats are constantly evolving – and these criminal actors are always looking for new ways to access networks and data – so any social changes are bound to be noticed by them. Working remotely definitely gives cyber criminals different routes they will look to exploit.

Iain Davidson: Attempts to scam people, get access, and steal information are becoming increasingly sophisticated, and change all the time.

Ransomware is one example where we’ve seen an evolution in strategy from criminals: previously they’d gain access to your data, steal it and ransom it back to you. Now they get into your data and change it – just small things here and there – and not tell you what they’ve done until you pay them.

Imagine if you’re a bank and they’ve changed a whole series of customer direct debits and you have no idea which ones –that can have serious implications.

What can people do to keep themselves safe when working remotely?

Joe McCusker: Keep all your devices updated, patch laptops and phones whenever they require it to keep the security measures up-to-date. Don’t log onto random coffee shop networks all the time, as these are rarely secure. Use a VPN – most devices have a built-in free one you can use.

Iain Davidson: Password management is so important. It is staggering but true that the most common password in the world is still ‘password’.

Use at least eight to 10 digits for a password, or use a password manager to generate a completely random one for you. And change your passwords every 90 days or so, perhaps more often for the really important things like internet banking. n


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WHEN THE FINANCIAL Conduct Authority (FCA) published its proposed Sustainability Disclosure Requirements (SDRs) in October last year, the response was largely positive.

According to some, concerns over greenwashing are most prominent in the UK. The FCA’s package of regulatory measures is designed to combat greenwashing, increase trust in sustainable investing and protect investors from fund managers who exaggerate their climate credentials.

These include restrictions on how terms like ‘ESG’ and ‘green’ can be used and three new sustainability labels for investment products. Among these, the Sustainable Improvers label may be the most transformative (see panel overleaf).

Rather than considering immediate ESG impact, the label confers the sustainability tag on assets that may not be sustainable now but are aiming to have a positive environmental or social impact in the future.

So could this pave the way to net zero and a new wave of sustainability-friendly investments?


“If you want to achieve net zero, you need to transition what is ‘bad’ now into ‘good’ – that’s what’s really going to turn the dial,” says Stephen Metcalf, Head of Sustainable Investing for RBC Wealth Management in the British Isles.

According to consultancy McKinsey, an additional $3.5trn a year is needed to reach net-zero emissions by 2050. Investments in Sustainable Focus or Impact products, says Metcalf, only go so far.

As government commitments fall short, private money will be urgently needed to ensure the biggest polluters –companies in industries such as energy, transport, manufacturing and construction – raise the capital they need to become more sustainable.

Corporations have come alive to this risk. More than 2,300 companies have set

science-based emissions targets approved by the Science Based Targets initiative (SBTi) at the World Resources Institute.

Chemical companies and steel manufacturers that invest in low-carbon production processes now are those that stand to outperform their peers and impact emissions reductions in the long term.

For Paul Douglas, Managing Director of Accuro in Jersey, the Sustainable Improvers label creates an enabling environment to help these companies transition.

“Having companies fall into the Improvers category forces them to comply. Company directors know that if they don’t change, they’ll struggle to receive the finance they need to continue.”


There’s an investment case too. The energy crisis, and rising interest rates, caused some investment managers to switch focus back from ESG products to investments in industry and fossil fuel companies. “The Improvers category opens up a whole

28 May/June 2023 Measurement


If the future of investing is sustainable, real ESG investment is going to be the best chance of a profitable return – which means the proposed Sustainability Disclosure Requirements are likely to be integral moving forward. But implementation won’t be without its challenges…

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universe of stocks and investments in an ESG portfolio, which allows for more diversification and should help returns,” Metcalf notes. “We’re already thinking about how our current sustainability offering fits into this new framework and we may have to change things if fund managers don’t get on board.”

While investment managers are often assessed on short-term performance, Douglas hopes the Improvers category will trigger a wider industry shift to a more long-term view.

In family trusts, synonymous with longterm succession planning, he says, the Improvers category helps bridge the gap between older generations and younger generations more interested in sustainable impact, enabling family capital to be deployed into different kinds of companies.

“Having the Improvers category addresses the polarising effect that either people do invest in sustainable investments or they don’t,” says Douglas.

The impact of the SDR, and the need to ensure that the standards are met, will extend the role of accountants too.

Dipak Vashi, Senior Manager in Business Advisory Services at Grant Thornton Channel Islands, has received multiple inquiries from market-leading funds.

“Right now, the message is keep in touch, read the regulations and do your gap analysis to scope out where you want to get to and what you’re already doing that could apply,” he says.

“Funds that start early and get the Improvers category right are going to be the winners in terms of longevity and profitability.”


There has been some criticism, however.

Chris Cummings, Chief Executive of The Investment Association, claims the SDRs will exclude 60% to 70% of all retail investments, worth £91bn.

One issue is the inclusion of ‘additionality’ in the definition of the Sustainable Impact category, requiring that, by investing, you make something happen that wouldn’t otherwise happen.

“That’s difficult to evidence in public markets, where you’re buying shares and don’t have direct control over underlying assets,” Metcalf explains. “A lot of public equity funds that are labelled ‘impact’ will have to change.”

Portfolio management services can only use a sustainability label if 90% or more of the value of all the constituent products in which they invest qualify. For multi-asset portfolios with asset classes that aren’t

covered by the SDRs and wouldn’t count towards the 90% – such as commodities and government bonds – this presents another challenge.

“The regulation is focused on asset managers and fund providers,” says Metcalf, “but we need more clarification for wealth managers on the private client side.”

With regulation set to come into effect later this year, firms are under pressure to act quickly. The SDR labels are not mandatory, but businesses with products currently marketed as ‘sustainable’ must choose to either meet the relevant criteria and apply a label or remove sustainability references from the fund names and marketing materials.

“The key challenge for firms is to assess whether references in client communications are consistent with the sustainability profile of the product or service, and are proportionate and not exaggerated,” explains Lyons O’Keeffe, ESG Director at IQ-EQ.

While ultimately helpful for retail investors, the complexity of implementing the SDRs – understanding the requirements, gathering data, designating the right labels and building robust reporting systems – will come at a cost that will likely be passed on to the consumer.

For O’Keeffe, the biggest headache is the lack of alignment of the SDRs with other sustainability rules, such as the EU Sustainable Finance Disclosure Regulation (SFDR).

Funds classified under SFDR Article 6 have no sustainability scope – Article 8 funds promote environmental or social characteristics, while Article 9 funds have sustainable investment as their objective.

Yet the three Articles don’t correlate with the labels proposed in the SDRs, meaning

Measurement May/June 2023 31
Funds that start early and get the Improvers category right are going to be the winners in terms of longevity and profitability

firms could have products that fall under the EU standard, which don’t comply with UK regulation.

“The SDRs add to reporting complexity for firms who have to comply with the requirements of multiple jurisdictions –that’s a significant distraction from the focus of effecting change in portfolio companies and is actually making people nervous about sustainable investments.”

Still, O’Keeffe says, in the long term, the SDRs will drive positive change. “Whereas the SFDR categories represent levels of disclosures that the fund will make, the SDR labels are designed to help consumers identify sustainable investment products and navigate the market.

“Rather than setting a hierarchy of sustainability, the Improvers label encourages betterment among managers who want to do the right thing but need more time and support to get there. Firms will have to consider the role of stewardship in meeting the label requirements and make a measurable improvement in ESG performance.”


While the politicisation of ESG and its dismissal in some quarters as ‘woke virtue signalling’ could delay progress, Metcalf believes a move towards global sustainability standards is inevitable.

The SDRs build on the international Task Force on Climate-Related Financial Disclosures (TCFD) and, once adopted, will incorporate the work of the International Sustainability Standards Board (ISSB).

In January, the Skidmore Review called net zero “the growth opportunity of the 21st century”. In March, the government released its Net Zero Growth Plan to

cement the UK’s position as a leader in the net-zero transition.

For Vashi, the SDRs are another sign of the UK leading the transition to a more sustainable world. “Investors are crying out for ESG products. We need trust and integrity back, because future investing is going to be sustainable and real ESG investment is going to be the best chance of a profitable return,” he says.

“We’re in a transition period, but this is coming and you need to get on board.”

The FCA is not relenting. In March, it criticised index providers for “widespread failings” in ESG benchmarks and repeated calls for broader regulation.

“Pioneering is not the easy part of any evolution. In the short term, this is a difficult period for funds thinking about ESG,” says O’Keeffe.

“But achieving net zero is going to rest on transforming existing companies to be as sustainable as possible and the SDR Improvers label is potentially game-changing.

“Over time, the challenges will resolve, requirements will likely merge, data will improve, technology will assist and regulations will become clearer, leaving more time for ESG and sustainability professionals to spend on improving their portfolios.”

Douglas agrees. The SDRs, he says, provide the opportunity for investors to fuel the transition to net zero through private markets.

“It’s a no-brainer for companies to embrace this, because those that do will capture the investment flows and flourish,” he says. “With the SDRs, the focus is back on ESG and sustainability again. The drive towards carbon neutrality has become an unstoppable force.” n

The SDR’s three Sustainable Investment Labels

Sustainable Impact

For true impact funds that aim to have a real-world sustainable impact

Sustainable Focus

For products with a minimum 70% of assets that meet credible sustainability standards

Sustainable Improvers Products using this label may invest in assets that have the potential to become more sustainable over time

32 May/June 2023 Measurement

Energy – is there a clean answer?

THE HARROWING EVENTS between Russia and Ukraine over the past 12 months have shone a very harsh light on our energy needs, both across the globe but more specifically in Europe – of which Germany and its reliance on Russian gas was at the very pointy end.

In the Autumn Statement delivered by Chancellor Jeremy Hunt in November, he pointed out that the world urgently needs a clean, safe and limitless source of energy to provide cheap electricity. Here, fusion energy has the potential to meet this need.

In fact, the focus on energy independence and security is at the forefront of many minds and we need a huge acceleration of technology such as offshore wind, carbon capture and nuclear to reach our clean energy goals.

This was highlighted in the Channel 4 documentary Guy Martin’s Great British Power Trip, which, for those who love a documentary, I would highly recommend. Over three episodes, lorry mechanic and motorcycle racer Guy Martin explores the past, present and future of Britain’s energy sector as he investigates how the UK makes its power and what makes it cost so much.

In the near term, the scarcity and security of both oil and gas has had a huge impact on these commodity prices, and ultimately what we pay. This has been painful as crude oil has moved from $17 in mid-April 2020 (a month after the pandemic started) to $76 at the time of writing. At its peak, it reached $121.

To be honest, this pales into insignificance compared with what we saw in the natural gas market, which is the main source of power used in industry.

From an investment point of view, this has always been a tricky sector and some investors are all for disinvestment. But if you invest in what we believe to be the best areas, such as companies that are transforming in the traditional energy space (along with gas and service providers), we think you can access this market in a sensible manner.

This is exactly what we aim to do in the

Ravenscroft Global Solutions Fund, which invests in companies helping to solve some of the world’s greatest challenges.


The energy transition can come in many colours. While some see gas as a clean energy source and of paramount importance, others place it in the ‘dirty’ camp. Getting from our carbon-heavy economy where we operate today to a potentially carbonfree future will take decades and is one of the greatest challenges of the 21st century. The transition is imperative to achieve our net-zero goals and keep global warming in check.

We need to reduce CO2 emissions to limit the impact of climate change and global warming. This change will require massive investment across the value chain by 2050 if we are to achieve our climate targets.

From an investment point of view, we are big advocates of energy transition, but we also understand that the transition to the lowcarbon economy cannot

take place without the involvement of the traditional oil and gas majors. And in the future these companies may be some of the biggest investors in renewables.


This question is addressed in Guy Martin’s documentary, but (spoiler alert), in short, it is not ‘the’ answer but can form ‘part of the answer’. Depending on your age, your thoughts on nuclear may be influenced by what happened with Chernobyl, but it is important to understand the difference between nuclear fusion and fission.

Fission is the ‘old’ nuclear power, focused on splitting neutrons into smaller atoms (like taking a log and splitting it in half). The main concern is that nuclear fission creates radioactive material (think of little splinters after splitting your log), which will create environmental and health problems if there is an accident. Fusion power, on the other hand, involves joining two atomic nuclei to make one larger one, and this reaction releases a large amount of energy. This offers a potentially endless source of energy – but there is still a way to go.


While in the perfect world we would already be carbon-free and energy would be abundant, this, unfortunately, is not the case. We must recognise that the transition to this is more than likely 20-plus years away, and we must get from where we are today to where we need to be in the future.

In the near term, we probably have to recognise that we cannot do that without the help of traditional companies. n


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Fiduciary duty in the 21st century

34 May/June 2023 Fiduciary


IN A SINGLE six-month period last year, the percentage of high-net-worth individuals who said they were likely to invest in green and social impact funds jumped from 64% to 74%. Data also shows that those with the highest net worth are the most likely to invest in ESG, with 84% of people with assets of £3m or more investing in more sustainable areas.

“ESG is in everyone’s consciousness in one way or another,” says Michael Betley, Global Head of Private Clients at Ocorian. “It’s in every paper we read every day. It’s an omnipresent subject matter.

“The barometer or the moral compass around much of this has changed, too –both in terms of personal and business behaviour. Overall, there’s a much greater expectation.”

Betley offers the example of familyowned businesses in Europe. “Many will be second or third generation businesses, and with that comes a need and desire to represent the family values.

“Sustainability and the community in which they operate may well be embedded in what they’ve been doing for some time. And this very much resonates with the current ESG agenda.

“When it comes to businesses today, there are two ends of the spectrum. You’ve got second or third generation family

businesses that want to articulate their family values. And you’ve got the newer businesses that are trying to compete.

“As such, they are looking at brand values and ensuring that they address the current consumer demands, which obviously include the ESG agenda.”

Sally Edwards, Legal and Technical Manager at Jersey Finance, says: “A growing number of families are now in a position – often for the first time – to think about the direction and application of their wealth, prompting renewed considerations around legacy and long-term planning. ESG has become an organic part of those conversations.

“The Next Gen are also becoming more influential in future planning, making it even more vital for advisers to be conscious of the key drivers for this important group.

“Typically, they are placing the advisory community under increased scrutiny and being more demanding in terms of transparency, wanting quick access to information and demonstrating mounting concern around greenwashing.”


In order to examine how these shifts could impact the role of trustees, Edwards looks back to the roots of their responsibilities.

“For nearly 40 years, under English law,

the go-to reference point for determining whether trustees are satisfying their duty of care has been the case of Cowan v Scargill, which prescribes that ‘where the purpose of the trust is to provide financial benefit, the power [to invest] must be exercised so as to yield the best financial return for the beneficiaries’.

“This clearly raises questions around integrating sustainable practices into an investment portfolio, particularly where doing so might have an impact on achieving the best possible financial returns,” Edwards continues.

“What has been seen in recent years, though, is how ESG factors have become more integral to material impact and financial performance. Today, they don’t necessarily work to the detriment of financial performance.

“Subsequent case law has also considered the question of ‘benefit’ and determined this may be interpreted more widely than just financial considerations.

“Overall, the trajectory is for ESG to be seen not as a problem but as an opportunity; for ESG to be integrated rather than treated separately and distinctly, and for consensus to be achieved among beneficiaries.

“For trustees, in practice this means introducing clear references to ESG and, May/June 2023 35 Fiduciary
ESG is becoming a central part of the planning requirements of high-net-worth individuals, but are its considerations entirely compatible with fiduciary duty?

where necessary, impact investing, in the family charter or equivalent document.”

Betley says: “An interesting point is how, today, we try to balance historical fiduciary principles and duties with the more modern, Al Gore-driven concept of what business leaders should be considering.

“Sustainability is an important factor for long-term success, and I think that’s true not just of businesses but also of structuring for family wealth in order to ensure that any plans put in place are going to have the best chance of success.

“If you’ve embraced 21st century fiduciary, you might say that the whole portfolio theory is a bit outdated,” he continues. “It may be the law, but shouldn’t we be pushing back?

“If we feel strongly about it and have family support, then there are ways of doing this. I think it’s appropriate for us to challenge ourselves.

“We don’t have to simply hide behind the legal strictures or the approaches that have historically been in place.”

Betley believes it is down to the professional advisers to ensure that these important matters are on the agenda.

“It’s not for us to demand that certain things are addressed,” he says, “but at the very least we should be raising the subject and identifying some of the opportunities as well as some of the risks of not addressing it.”


So, how might all of this change the fiduciary landscape in the future, as well as what the relevant roles entail?

“Traditionally, when you looked at the trustees’ responsibilities around asset bases and trust funds, it was about preservation and then enhancement of capital,” says Betley. “And while some people might argue that sustainability was sort of

embedded as part of that, I’m not sure that’s necessarily understood.

“It’s only been in the past decade or two that there’s been a much greater awareness about ethical investing and the rights and wrongs of investing in companies that don’t adhere to certain international standards.”

He continues: “Typically, there was a first generation who would have had an expectation about returns, but then we have the next generation who are prepared to surrender some of those returns as long as the investments that are being made are appropriate and fall within the relevant screening of suitable sustainable investments.”

“Trustees today must be conscious of the need to demonstrate robust ESG credentials,” says Edwards. “And as a result, upskilling is likely to be key over the coming years.

“As far as structuring is concerned, an ESG approach brings with it a need for further considerations for trustees in new areas. These include the tax treatment of ESG assets; whether or not ESG and non-ESG assets should, or even can, be segregated; a family’s risk profile and the potential for family conflict.

“Documentation and clear evidence of these sorts of considerations are crucial in demonstrating that a prudent approach has been taken.

“With the changing aspirations of families and the world evolving rapidly, there are strong arguments for retaining an element of flexibility within structuring rather than ‘hardwiring’ ESG into trust documents.”

Edwards points out that ESG has become a core element of the risk management framework for trustees. “The risk involved in not participating in ESG

investing is now seen as being as significant as to be participating.

“The key for a trustee here lies in making sure they have done all they can to weigh up the considerations, look at the permutations, obtain advice and provide evidence, and make a judgement based on those deliberations. Then, trustees can proceed with confidence.”


When it comes to advancing the conversation around ESG, Edwards stresses that trustees should ensure they are extremely well-versed.

“They need to be conscious of the nuanced interpretations of ESG and the potential misunderstandings and differing knowledge levels in different markets, particularly when it comes to the differences between ESG integration, impact investing, social enterprise and philanthropy,” she says.

“And, although the flexibility afforded under Jersey law can be a significant benefit for trustees, it does require clear, accurate communication between trustees and clients, and high-quality documentation to be maintained in order for the bespoke terms and objectives of a trust to be maintained, beyond doubt.

“This also means that trustees need to be skilled in reconciling the differing interests of beneficiaries – particularly where societal and environmental issues, such as climate change, play out over a long timeframe.

“If trustees do not adopt this approach, there is clear potential for future litigation where beneficiaries do not agree. That’s why, for trustees, asking simple, clear questions, right from the outset, is absolutely critical.”

36 May/June 2023 Fiduciary
A growing number of families are in a position, often for the first time, to think about the direction and application of their wealth

The future of corporate reporting and ESG assurance

Adam Cichocki, Partner at Deloitte, on the impact of changing stakeholder expectations and trends in ESG reporting

ACCOUNTABILITY IS A crucial concept for corporate reporting and one that is rapidly changing. The financial audit continues to play a critical role, but broader confidence and trust in business health and societal impact is becoming increasingly important.

Stakeholders want to understand an organisation’s financial performance, the resilience of its business model and its impact on society and the environment.

As a result, we have already seen a shift towards more integrated reporting, with companies including information in or alongside their annual reports to help stakeholders make informed decisions about the sustainability of a business.

Companies are starting to focus on how value is created and sustained over the short, medium and long term.

The Channel Islands are no exception. Many financial services organisations, and our regulators, now disclose information on their ESG metrics and targets.

The Jersey Financial Services Commission has published its ESG principles since 2020, and last year the Guernsey Financial Services Commission published its greenhouse gas emissions.


As well as the changing expectations of stakeholders, regulations are rapidly evolving. Alongside some of the large, more established jurisdictions, such as the US and the UK, regulators from as far and wide as Brazil, Egypt, New Zealand, Singapore and Switzerland have introduced sustainability reporting requirements in recent years. It is reasonable to expect that Jersey and Guernsey will follow in due course.

Global sustainability reporting standards being developed by the International Sustainability Standards Board (ISSB), and other regulations, such as the Task Force on Climate-Related Financial Disclosures (TCFD), are key enablers for developing high-quality sustainability reporting, as they provide a consistent framework for comparable reporting. As local jurisdictions adopt these requirements, companies

must ensure they can deliver accurate and robust sustainability reporting. For some companies, this will be challenging, as the data and controls for non-financial information may be less developed than for financial processes.

Investment in robust controls and processes, transparent reporting of the control environment and clarity on the company’s policy for assurance of nonfinancial information will be critical in building confidence and trust.

Regulators are increasingly concerned about the risk of greenwashing – where a firm makes misleading or unsubstantiated claims about the environmental benefit of its products or services. It is reasonable to expect a continued focus by regulators on anti-greenwashing regulations.

The Financial Conduct Authority (FCA) published new rules to tackle greenwashing last year. The proposed regulations will significantly affect asset managers regulated by the FCA and those engaged with sustainable finance products.


In recent years, financial services have embraced sustainable finance. The investment management sector has seen a proliferation of funds that describe themselves as sustainable or environmentally conscious, boosted by a fast-growing sustainable finance regulatory framework and investor demand.

Across the banking sector, ESG financing is becoming business finance’s mainstay, including green and social bonds and sustainability-linked facilities.

More than £13bn is listed on The International Stock Exchange’s Sustainable segment of finance products, designed to support environmental, social and sustainable initiatives.


Increasing regulations and stakeholder demands for companies to be more transparent about their organisation’s impact on the people and world around

them have expanded the scope of ESG performance measures. As well as measuring greenhouse gas emissions, companies are starting to report on metrics such as biodiversity and the use of constrained natural resources.

They are also reporting on social elements of their policies and practices –gender pay gaps, modern slavery and the ethical use of big data and AI.

Reporting on non-financial metrics can be more demanding than reporting on financial metrics, as data collection and control processes are often new.

Independent assurance reporting can give firms and their stakeholders confidence in the metrics being reported. The level of assurance most commonly used at present is limited assurance under ISAE3000/3410.


More mature reporters are considering whether there are specific ESG metrics where reasonable assurance might be achievable in the future.

Changes are already afoot. The ISSB will help drive a common framework for corporate reporting and shift the focus from financial reporting to business model sustainability, showing how value is created and sustained.

Corporate reports can be a powerful way to share an organisation’s story. They can help businesses engage with stakeholders, meeting their needs and earning trust while bringing them on their journey to a more sustainable future. n

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Goodbye greenwashing, hello greenhushing

Words: David Burrows

38 May/June 2023 Green credentials

OVER THE PAST decade or so, companies’ ESG credentials have increasingly come under the spotlight. Firms see the benefit of talking about climate goals and objectives – but the positive talk is not always supported by action or tangible results.

A dramatic shift from a reliance on unverified in-house ESG data to a requirement for independently evaluated and authenticated reporting – especially in areas such as calculating carbon footprint – has subtly changed the picture too.

It has put greater pressure on companies and led to the rise of ‘greenhushing’ – as firms avoid voluntary environmental disclosures (and associated scrutiny). Instead they choose to stay silent in the hope that they will slip under the radar.

So, is greenhushing the next big ESG challenge for firms? And could it prove as harmful and misleading as greenwashing has in recent years?

Dr Kevin Kelly, a Director of the International School of ESG, comments: “Greenhushing is unlikely to have the same impact as greenwashing has over recent years – scrutiny will ensure that it doesn’t get to the same scale.

“The requirement for transparency by stakeholders will negate any attempts at greenhushing on a larger scale, and minimise attempts at radio silence by corporate actors who would prefer to keep out of the climate spotlight.”


Karolina Pilcher, Senior Strategy and Research Manager at Jersey Finance, takes a different view. While greenwashing is often a deliberate attempt to deceive, she says, greenhushing is a deliberate attempt to under-communicate or under-report progress towards ESG objectives.

“It could be argued that greenhushing is as harmful, because stakeholders may still end up being misled by information that doesn’t represent the full truth,” she says. But as debate over greenhushing grows, is there a danger that it could turn down the volume on ESG?

Andy Pitts-Tucker, Managing Director, ESG, at Apex Group, argues that, whereas greenwashing threatens the credibility of ESG reporting by undermining investor confidence, greenhushing could allow apathy to creep into ESG – and undermine the progress made in recent years.

“It could also mean that company boards persist with bad practice and ignore their obligations to our shared May/June 2023 39 Green credentials
Following a spate of scandals in which firms have been criticised for overstating their green credentials, some are actively playing down their reporting for fear of drawing unwanted attention to their other activities and practices. But there may be a big price to pay

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environment and towards being responsible corporate citizens,” he says.

“Greenhushing can weaken investor trust and consumer confidence. Ultimately, it is contrary to the steps investors and businesses need to take to mitigate climate change and protect our shared future.”

However, Dr Kelly suggests that in today’s society, where corporate information is only a click away, it is doubtful that greenhushing will lead to less emphasis on ESG.

“ESG is being embraced across the globe and businesses recognise the need for not only compliance but their capacity to effect positive change within these pillars.

“For businesses to achieve long-term sustainable growth, they recognise that the corporate landscape is changing, so to shy away from this would potentially negatively impact their bottom lines.”

Pilcher identifies two arguments here. One is that greenhushing headlines could draw attention to ESG – and any discussion is good discussion.

“Awareness is important and the more people talk about this subject, the better,” she says. “This should in turn encourage more candid discussion and give people the confidence to start or continue the ESG journey.”

On the other hand, Pilcher cites a 2022 net zero report by carbon finance consultancy South Pole, which found that one in four companies was “going green, then going dark” by not disclosing their sustainability work.

“Doing so makes corporate climate targets harder to scrutinise and limits

knowledge-sharing on decarbonisation, potentially leading to less ambitious targets being set, and missed opportunities for industries to collaborate,” the report states.


Given this potential impact of greenhushing, could it undo decades of hard work by environmental campaigners? And could it lead to more stringent regulation?

Pitts-Tucker believes further regulatory intervention can’t be ruled out if the practice gathers momentum.

However, he adds: “The embedding of existing regulation, combined with consumer and market pressure, will be enough to put an end to greenhushing over the medium term.

“But we shouldn’t underestimate the challenge posed by greenhushing, and pressure should be put on those businesses that engage with it. The risk is that the work done to secure consensus on the action needed to secure a sustainable future is undermined and this is something that can’t be allowed to happen.”

Increased regulation is not ruled out by Dr Kelly either. “Regulation tends to increase when evidence suggests businesses are not doing an effective job in regulating themselves. Greenhushing would be a good example of this, so continued attempts to implement this practice might see more stringent regulation.”

So could greenhushing put directors at odds with investors and stakeholders? “Potentially,” responds Pitts-Tucker. He argues that while there is growing

consensus on the climate challenge and the role of ESG in tackling it, there are always going to be those who need convincing.

“Likewise, a business’s commitment to ESG and getting itself on a sustainable footing will always need to be balanced against the bottom line and shareholder returns. For some, the transition will be more difficult than for others.”

He adds: “Fundamentally, however, directors need to take a long-term view and make the argument for embracing the change to capitalise on that future. This is what leadership looks like.”


Many companies are wary of speaking about climate initiatives for fear of being called out for getting it wrong. This in itself could be detrimental to progress.

It’s similar to digital developments, according to Pilcher – people are scared to commit to digital transformation for fear of getting it wrong and damaging established ways of working.

“It is important to remind people that they shouldn’t be afraid to fail. It’s all about education – if mistakes are made, you learn from them and move on,” she explains.

Chris Chilton, Managing Director (Operations) at Orchard PR, says that how companies talk about sustainability and how they present it is a hugely important part of avoiding greenwashing and greenhushing.

“Greenhushing is a concern as it can be difficult to separate companies that are quietly getting on with their sustainable May/June 2023 41 Green credentials
it can be difficult to separate companies that are quietly getting on with their sustainable journey but not keen to overplay it, and those dragging their heels

journey but not keen to overplay it, and those dragging their heels and hoping to avoid scrutiny,” he explains.

“Clearly, there is a need to have effective documentation of ESG activity, but these can be kept low-key if appropriate, using owned channels. These are clearly available if any scrutiny is required, but not pushed out inappropriately.”

As Chilton adds, it’s a fine balance and businesses can overreact both ways –overplaying trivial initiatives or keeping quiet about impressive ones to avoid looking too pleased with themselves.

There are several high-profile cases of companies being called out and finding themselves the subject of unfavourable headlines. Coca-Cola, for example, claimed its PlantBottles were more eco-friendly than its standard plastic bottles on the basis that its manufacturing process used plantbased materials. However, the percentage of plant-based materials used accounted for 30%, so a significant percentage of non-renewable fossil fuels were also used in the process – leading some to claim the so-called eco-friendly bottle still had a negative impact on the environment.

As Dr Kelly points out: “The celebration is on the 30% and the hush is on the 70%.”

Coca Cola is by no means the only business to receive unwelcome media attention. Last year, UK advertising regulator the Advertising Standards Authority (ASA) banned two HSBC adverts for being misleading about the company’s work to tackle climate change.

Pitts-Tucker believes fear of being called out on such issues is understandable, especially when shareholders, investors and the wider community now place so much stock in a business’s commitment to environmental responsibility and stewardship. Placing your head above the parapet can be a precarious business.

Nevertheless, he insists, the risk of saying nothing is a greater threat to reputation and a firm’s bottom line than saying something, even if that something is wrong.

“Ultimately, much of the regulation in this space is fairly new and we’re all on a learning curve. Being honest and trying to do the right thing will be recognised and rewarded,” he adds.


Nichole Culverwell, Director at PR agency Black Vanilla, says that companies also need to be aware of what they can and cannot say in different regions.

She explains that the many advertising standards make this more confusing for companies operating in Europe – what you can say in the Netherlands, for example, can be different to Germany’s guidelines.

Meanwhile, in the UK, the ASA and the Financial Conduct Authority are clamping down on greenwashing claims.

Equally, new powers for the Competition and Markets Authority (CMA) may soon enable it to impose fines.

But amid the confusion, there are good standards and guidelines out there, according to Culverwell. “The ASA and

the CMA do provide good advice and information – it just needs to be read and applied,” she says.

Speaking about climate initiatives will no doubt remain challenging and nuanced. The key is positive messaging from the top down and – crucially – sufficient data to back it up.

As Dr Kelly stresses, the onus is on directors to get it right. “They are the people most familiar with their business and they are best placed to tailor their corporate response to corporate initiatives to address climate change.”

He adds: “Risk is a part of a director’s role and so there will always be a fear of getting things wrong. This should not be a barrier to taking their responsibilities seriously and ensuring they are compliant with the law and regulation.”

As Culverwell concludes, clear communication is essential. “Start by understanding what you want to say and avoid vague terms. You need to be accurate and choose words carefully – net zero, carbon neutral, biodegradable all mean different things.

“Avoid jargon and don’t be too technical – communication should be honest and clear if it is to influence the behaviour change we need.” n

Greenhushing and greenwashing defined

 Greenhushing Companies actively remain quiet about their climate strategies. They either avoid or refuse to answer questions about their climate goals.

 Greenwashing Companies market their products or services to customers who care about the environment, insisting they care about climate change when there is no evidence to support this. In many cases, how these businesses operate is harmful to the environment.

42 May/June 2023 Green credentials
Regulation tends to increase when evidence suggests businesses are not doing an effective job in regulating themselves

In conversation: Martin Popplewell

Based in Guernsey, Martin Popplewell is a Director in Deloitte’s Channel Islands tax team, working across Guernsey and Jersey automatic exchange of information and local service providers.

How long have you worked at Deloitte?

I will have been at Deloitte for 20 years in September – I’m not sure where the time has gone.

I spent my first seven years in the Leeds office having joined as a graduate in 2003, before moving to Guernsey in 2010.

What does your role entail?

I focus on operational tax matters such as FATCA, the Common Reporting Standard (CRS), economic substance and local company (and now partnership) tax returns. In particular, I work closely with local trust and corporate service providers to help them navigate these challenges on behalf of their client structures.

I spent just under 12 months on secondment with a trust company in Jersey in 2019/20, which really helped me to cement in my mind how tax issues impact in practice for corporate service providers.

A lot of my work involves helping service providers document their work in order to demonstrate compliance to external stakeholders, whether that be tax authorities or client boards. I like to describe it as helping clients to put their best foot forward.

Day to day, I work closely with Hamish Crake, who is an Associate Director in our Jersey team and has a similar focus on

I am also linked into the Deloitte UK and global CRS team, in particular on CRS technology solutions. One of the benefits of working at Deloitte is the collaborative approach, both locally and across the wider Deloitte network. Feeling included and part of a team really does make a difference.

What committees and activities are you involved with?

I have been involved since its inception with the Guernsey Revenue Service working party for FATCA and CRS, which has certainly covered a lot of ground since those early days.

Both Guernsey and Jersey recently received the highest possible rating of ‘on track’ from the OECD for their implementation of CRS, which was really important.

I have recently joined the Guernsey Society of Chartered and Certified Accountants (GSCCA) tax sub-committee, which has improved my knowledge of some of the more esoteric parts of the Guernsey tax legislation and statements of practice.

The GSCCA does a fantastic job locally and it’s great to be able to be a part of the association.

The aspect of my role that I enjoy the most is getting in front of clients. I chair our local service provider tax roundtables on both islands.

It is always interesting to listen to different perspectives on topical tax matters – you would be surprised how lively these sessions can get.

Outside the office, I head the Deloitte sponsorship of the Guernsey Netball Association (GNA) Winter League, with GNA development officer Amy Fallaize. My two daughters are involved in netball at youth level, so it is really rewarding to be able to champion this initiative.

I work closely with Viviane Kemgne, who is a Tax Consultant and our own Deloitte Guernsey netball superstar, on this.

The path your career can take is interesting – and certainly not what I could ever have predicted. The variety of wider roles encapsulates why I enjoy working at Deloitte in the Channel Islands. n May/June 2023 43 Advertising feature I like to describe
work as helping clients to put
forward FIND OUT MORE Contact Martin Popplewell, Tax Director, Deloitte at:
their best foot

Measuring up


ACROSS ALL OUR working and personal lives, we have become increasingly environmentally conscious.

At home, it’s now common practice to help offset the risks of global warming by sorting our weekly waste into the appropriate bins. And in the business world, it’s visible everyday in cycle-to-work schemes and energy-reduction measures. Of course, at home you wouldn’t expect

to be monitored on your recycling performance – and asked to write down just how many plastic bottles you’ve put back in the system that week.

Yet businesses do need to be scrutinised, for a variety of reasons. As a result, they are now being asked – or required – to show measurement and metrics across the whole ESG (environmental, social and governance) spectrum.

44 May/June 2023 Measurement
Has the current measurement of ESG across different organisations become more about marketing hype than real progress towards net zero? And would increased standardisation, along with the use of automated technology, make for easier reporting?

“The phrase ‘ESG measurements’ covers a lot of areas from a lot of different perspectives,” says Alex Thornton de Mauroy, Senior Associate at Appleby in Guernsey. “If you’re an asset manager, you’re looking for good quality, reliable and timely information from companies you are investing in. If you are a company owner, you’re, for instance, measuring the ESG performance up and down your own supply chain.”

Businesses are certainly not starved of options given the plethora of ESG reporting frameworks that have emerged in recent years. These have been created by a vast range of organisations, including governments, non-governmental and nonprofit organisations and, as such, vary in terms of focus and metrics.

They can cover specific sectors or single themes, as is the case with the Task Force on Climate-related Financial Disclosures (TCFD) for corporate climate change issues or the Global Real Estate Sustainability Benchmark.

ESG standards boards, where companies can report their data, include the CDP (Carbon Disclosure Project) and the Global Reporting Initiative (GRI) framework. There are also mandatory frameworks such

as the EU’s Sustainable Finance Disclosure Regulation (SFDR), requiring specific firmlevel disclosures from asset managers and investment advisers.

In Jersey and Guernsey, compliance is required with the SFDR for funds marketing into the European Union. Jerseyand Guernsey-incorporated companies that are listed on stock exchanges may also fall in scope for reporting obligations such as the TFCD.

There are also several ESG ratings providers, such as Sustainalytics, giving insights on a company’s ESG performance compared with its peers. These are based on a mixture of quantitative ESG data and qualitative analysis.


Businesses have responded to the demand for more measurement. According to a recent report from Harvard Business School and Rice University, the percentage of S&P 500 firms releasing voluntary ESG disclosures rose from 35% to 86% between 2010 and 2021.

Other studies cast doubt and depict confusion, however. KEY ESG recently revealed that in a survey of 100 private market companies across the UK, EU and

US, 90% said that they were unsure how to report on ESG. They were “baffled by ESG reporting requirements”, the report found, and a lack of resource meant they were taking up to 12 weeks to collect ESG data.

“A key issue for many companies is being able to get the data they need. Then, is it accurate, timely and complete – and can they present it in a credible way?” explains Thornton de Mauroy.

“There are challenges such as where to find the data and potentially needing or indeed choosing to meet the requirements of more than one framework.”

Shannon Lancaster, a Fund Analyst at Ravenscroft, agrees that there have been plusses and minuses in ESG measurement in recent years. “The information that companies are reporting has improved with more available data and more ways to become ESG-certified,” she says. “There is also an increased awareness about the need to report.”

But she acknowledges there are challenges in keeping up with regular changes to regulations around reporting, as well as a lack of consistency across the various ESG frameworks.

“There is no uniform definition for ESG terms, so while scores are a move in the ▼ May/June 2023 45 Measurement ▼
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right direction, they are often not the most accurate or consistent way to measure activities,” she says. “Many times you will have two different ratings agencies with inconsistent scores for the same company. There is a huge mismatch between what one analyst considers to be material and what another thinks.”


In addition to these challenges, Lancaster believes that reporting on the S – the social aspect – is difficult for companies and funds, as the data is often less tangible than E and G. It can also encompass a huge range of issues, from employee satisfaction to workplace safety.

“The ‘S’ is harder to measure in terms of how it impacts the financial future of a firm,” she says. “We have been talking to some fund managers about how to measure their social credentials. One nice example came from Covid-19 and finding out how the management teams in their portfolios looked after staff during lockdown.”

Lancaster adds that as a fund selector, Ravenscroft is asking these better questions of fund managers.

“We want to make sure they are thinking about these issues as well,” she explains. “There are a lot of publicly available scores, but they don’t necessarily drive our decision-making process. They are often self-reported and backward-looking –everything we don’t like.

“We might use those to gain more insight around why a certain company may be lagging its peers. But we do our

own research [when it comes to looking forward],” adds Lancaster.

This extra digging can help expose companies that are greenwashing –spinning a yarn about how well they are doing on ESG.

Greenwashing is now a mainstream concern. German asset manager DWS had its offices raided by police last year following allegations that, according to an FT report, it had “misrepresented the share of its assets that were invested using ESG criteria”.

“There is some greenwashing going on. A lot of people are using ESG as a snazzy marketing tool,” Lancaster says.

Regulators are responding, with the Guernsey Financial Services Commission last year publishing guidance on measures to counter the risk of greenwashing in collective investment schemes. Disclosures need to be based on genuine fact and able to be evidenced.

Part of the issue around disclosure challenges could be a lack of resource, however. “As a small boutique investment management firm, we are at a disadvantage compared with a firm like BlackRock, which can just hire in a team to input ESG information and know exactly which boxes to tick,” Lancaster says.

“We’ve heard from fund managers who describe the SFDR paperwork as being quite extreme and requiring extra staff to handle that administrative burden.

“Does it mean there are a number of really good funds out there that would score incredibly well in terms of ESG ratings but don’t have the resources to reach those standards?”


Amid that challenge, technology in the form of automation and AI could make ESG reporting easier for organisations of all shapes and sizes.

Guernsey-based ESI Monitor has developed FutureTracker, an automated sustainability platform. The software incorporates an emissions calculator and business logic engine that support reporting, benchmarking and net-zero planning.

“So much of this is about understanding your own business well, knowing where to get data from, and what levers to pull to change that business,” says Ian Corder, Co-founder and Executive Director of FutureTracker.

“We have an API capability where we can ingest data from clients but, in a lot of cases, the enterprise data is not quite May/June 2023 47 Measurement
Reporting on the S –the social aspect – is difficult for companies and funds as the data is often less tangible than E and G

as ready as you want. We hand-hold for the first couple of years so that clients can understand solutions such as apportioning energy use. A lot of what we do is around education – such as how to read meters or the capacity of any refrigeration equipment on site.”

Looking forward, Corder wants to develop similar functions to help businesses report on social issues, as well as biodiversity.

“We are also working on bringing in a sophisticated data manager, which will be able to consume, recognise and change measurements – miles into kilometres, say, if that is what’s needed in the calculation.”

Agile Automations’ Robotic Process Automation (RPA) tools are also aiding ESG measurement. “Intelligent automation allows us to spearhead the adoption of ESG, be this in driving cost savings, to

improving work-life balance and staff wellbeing through the removal of mundane tasks through the automation of everyday tasks,” explains Director Martin Keelagher.

“Efficient automation is driven by high-quality data – ‘garbage in, garbage out’ – by integrating systems that can remove the need for any human interaction in providing data sets. This means the ability to effectively monitor and measure processes is exponentially increased.”


Keelagher sees no limit to how far intelligent automation might evolve. “We are looking at how solutions such as ChatGPT can integrate with RPA to use the data and make decisions in real time, to better the performance of the organisation.

“This could be seen where costs of utilities are fluctuating, where the intelligent solution can look to perform key tasks when the cost of these utilities might be lowest per unit of energy used.”

There are also signs that automation could help create more standardised and consistent measurement and metrics.

Trade data and analytics provider Coriolis recently launched an automated ratings tool to monitor the ESG activity of companies and supply chains. It aggregates company information from several libraries of open-source data and scores them against sustainability regulations.

The genesis of the tool, it says, was the need for an automated, scalable and independent “ESG passport on every single transaction, every single company”, which

“can go anywhere with the company and mean the same thing, in any jurisdiction, or any regulatory environment”.

Thornton de Mauroy believes automation as an industry focusing on this area appears to be developing rapidly and can help achieve more standardisation – but notes there is still some way to go.

The quality of the data and the consistency across data sets needs to continue to improve. “For example, companies may not necessarily be producing ESG reports in the same way, using different formats and categories of data. Unstructured data is known to create challenges for automation,” he says.

Keelagher is also cautious. “There will always be a place for a ‘human’ in the ESG journey, to provide that simple check as to ‘right and wrong’. Bots and code aren’t ‘feeling’, they aren’t personal, they just see data. Can they make the right decision when faced with comparing one company’s performance with another?”

Lancaster says progress is being made in standardising data, highlighting the UN’s Sustainable Development Goals and the EU’s SFDR – but again, more is needed.

“Having goal posts that don’t move will be helpful, as will standard ESG definitions,” she says.

“There is still a way to go for a standardised approach and client education, but in 10 years’ time we will be in a completely different situation. Data will improve, people will have to report even more, and everything should be much clearer for investors.” n

48 May/June 2023 Measurement
There will always be a place for a human in the ESG journey... Bots and code aren’t feeling, they just see data

Does 9 go into 8?

The mass relabelling of Article 9 funds as Article 8 has been branded the Great Reclassification. So how is it working? what are the challenges? and what issues are presented by the data requirements necessary for solid ESG reporting?

Words: Sophie McCarthy

50 May/June 2023 Funds

IN NOVEMBER LAST year, it was announced that leading European asset manager Amundi had reclassified almost all of its sustainability range of Article 9 funds into Article 8 – in a move it attributed to an “evolving regulatory environment”. Then at the beginning of this year, Morningstar found that assets in Article 9 funds had shrunk by 40% or $175bn. Now referred to as the Great Reclassification, it came just ahead of more stringent reporting rules being implemented around ESG and funds.

In 2021, the European Commission published long-awaited guidance regarding

some of the known unknowns of the Sustainable Finance Disclosure Regulation (SFDR). The SFDR was, in turn, introduced by the European Commission alongside the Taxonomy Regulation and the Low Carbon Benchmarks Regulation, and formed part of a package of legislative measures arising from the European Commission’s Action Plan on Sustainable Finance.

The SFDR requires asset managers to provide prescript and standardised disclosures on how ESG factors are integrated at an entity and product level.

It’s vital to note, too, that a significant portion of the SFDR applies to all asset managers, regardless of whether they have an ESG or sustainability focus.

“The Corporate Sustainability Reporting Directive (CSRD) triggered the creation of the European Sustainability Reporting Standards – the detailed reporting requirements for firms,” says Harry Briggs, Director at sustainability reporting specialist Terra Instinct.

“So far, 13 standards have been created to cover the wide range of sustainability matters that currently exist.

“The largest 11,000 firms will start reporting under these in 2024. Then we’ll have until 2026 for a full phase-in for the rest of the market.”

A major challenge, he adds, is that these reports require an assurance opinion.


“The risk of a qualified report is causing great concern in these corporates,” Briggs continues. “These are very technical standards to comply with, and all firms will struggle. The larger firms can acquire technical expertise, but the scale and complexity of their operations makes this difficult. Smaller firms, on the other hand, lack the technical expertise and often don’t have data recording processes in place.”

So, where do Articles 8 and 9 come into play? Article 9 covers products that have sustainable investment as an objective, while Article 8 covers products that promote environmental or social aspects of wealth.

With this in mind, and given the arrival of the term ‘greenwashing’ in the MerriamWebster dictionary, it’s easy to see why so many funds are being rebadged.

“Article 9 is the ‘top tier’ of the regulation,” says Dipak Vashi, Senior

Manager, Business Advisory, at Grant Thornton. “In this case, the financial product being marketed has the objective of a sustainable investment and is therefore measured by tough performance indicators.

“Funds that have Article 9 products will have to report against the EU Taxonomy; these products have a clear focus on sustainability and must meet strict requirements on how they achieve the goals that align with this focus.

“Firms are beginning to realise that to be compliant with Article 9 requires a complete overhaul of how you do business,” Vashi continues.

“And this isn’t just at the product level – it’s across the entire entity. It’s daily operations, decision-making and even business strategy.

“All of this must come from board level, and it takes time. This means firms that initially thought they would meet the dark green requirements are now taking the time to reassess their strategy and are perhaps deciding to be light green in the interim.”

Ross Youngs, Group Commercial Director at Belasko, explains that data collection is something of a challenge for those who invest globally in private companies.

“On one hand, it is relatively easy to decide on the data points you would like to measure,” he says. “But on the other, it’s impossible to collect standardised data May/June 2023 51 Funds
Firms are beginning to realise that to comply with Article 9 requires a complete overhaul of how you do business
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from your portfolio companies. This is because portfolio companies differ in the level of sophistication, resourcing and available data.”


Vashi offers his thoughts on data requirements and solid ESG information. “ESG reporting is brand new, and it’s not nearly as well developed as financial reporting. With financial reporting, processes, systems and data extraction tools ensure the information needed is seamlessly gathered on a monthly and quarterly basis.

“Producing these systems and developing methods for getting the right data to report against will be key, and not easy, as ESG requirements ramp up.

“Acquiring the help of professional advisers to aid with reporting, as well as third-party assurance, will be key to successful and value-added disclosure, which all stakeholders desperately require. But – time is running short and excuses are running thin.”

“A huge challenge is having data that is reliable and evidential,” says Youngs. “Because you cannot be clear about the quality of the data from company to company, the comparability of it is questionable.

“Without being able to guarantee reliable and definitive reporting into sustainable funds, how are we able to prove their output towards emission, societal or sustainable goals?”

Briggs says: “The importance of sustainability reporting is catching up with financial reporting – but without the decades of investment and knowledge that go into the data behind it.

“Getting data that is complete, accurate, relevant, consistent, transparent and available is a process that would take any organisation a long time to achieve.”

Vashi believes that early adopters will reap the benefits here. “Those who engage with the process prematurely and start on the journey to building effective systems that produce quality disclosure will be rewarded with market-leading status.

“In fact, we’re already seeing this. What’s more, global standard-setters are encouraging voluntary reporting.

“There is no doubt that mandatory reporting is very near,” he continues. “So those who are ahead of the curve are already seeing advantages.

“Producing the required disclosure can’t be done at the flick of a switch –those who leave it too late will be left with significant competitive disadvantages. Engaging with professional advisers early, therefore, will be key.”


A key question remains, however, about the changes we could see to greenwashing and poor reporting in the near future. What, in turn, will this mean for how companies are perceived?

“Market participants and regulators across the world have stated that greenwashing is one of their principal concerns, which means action needs to be taken – and fast,” says Vashi.

“If the trust and integrity of market participants begin to erode, there could be serious consequences.

“The finance industry has rightly been at the frontline of new regulation to achieve the ambitious Sustainable Development Goals by 2030 and net-zero targets by 2050, and this is an extension of that.

“The issue is front and centre of all stakeholders’ minds, which means that there is real energy and effort around combating greenwashing and ensuring there is a flourishing landscape to fulfil sustainable investment.”

Briggs believes that the financial reporting world is a good proxy for sustainability reporting.

“We know about the risks surrounding greenwashing and green bleaching,” he says, “both of which can materialise through fraud or through error.

“We’ve already seen regulatory action against fraud – for example, the German police raiding the DWS headquarters –although we are yet to see serious action against error.

“We are at the very early stages of these regulations and there will likely be a grace period for their implementation, but at some point the regulators will ramp up their enforcement activity,” he continues.

“Given the rapid increase in emphasis that investors put on sustainability and the pressure that executives will be under to show strong sustainability performance, I expect the market will see an Enron/ Wirecard scale fraud in this space at some point in the short to medium term.

“As with Enron in particular, this will then trigger a step change in enforcement. Most governance structures will defend against this and will take these requirements seriously, but there will always be a minority that does not.”

Vashi concludes: “ESG assets will move from a ‘nice-to-have’ to an absolute essential in all investment portfolios, and quickly. With no current global baseline in place, it is difficult to place a defined benchmark now. However, this will undoubtedly come as standards mature.

“Investors are rapidly realising that ESG investments give them the best chance of long-term sustainable returns, and this adoption will gather pace.

“There will be winners and losers in this space – and those who are slow to adopt and understand the regulation will undoubtedly suffer.” n May/June 2023 53 Funds
ESG assets will move from a ‘nice-to-have’ to an absolute essential in all investment portfolios – and quickly

Green finance from green islands


Gill Wadsworth

RECENT RESEARCH CONDUCTED by PwC found that ESG-oriented assets under management (AuM) are set to grow much faster than the wider market.

In the firm’s base-case scenario, the share of ESG would increase from 14.4% of total AuM in 2021 to 21.5% in 2026, comprising more than a fifth of all assets.

And while current growth is derived largely from retrofitted funds – at the end of 2021, 27% of funds in Europe had been repurposed to integrate ESG factors – PwC expects that new funds will be set up, raising new capital.

This presents significant opportunities for the Channel Islands, which are already recognised as reputable centres for sustainable investment, to continue to add to their share of ESG assets, which are predicted to exceed $100trn by 2028 and $150trn by 2034.

Elliot Refson, Head of Funds at Jersey Finance, says: “Investors are looking for two things from a jurisdiction: certainty and stability.

“Jersey’s strength is that as a base case, we offer both political stability and fiscal stability as well as a minimal change outlook from a regulatory, legal or economic perspective underpinned by world class infrastructure.”

According to the Jersey Funds Report 2022, 60% of assets in regulated funds are aligned with the Principles for Responsible Investment, representing an AuM of $257bn. Refson believes this is exemplified by Jersey having the fastest broadband speeds in Europe, and by the breadth and depth of expertise of the 14,000 people who work in the financial industry there –and this encompasses a growing community of ESG professionals.

54 May/June 2023 European funds
environmental, social and governance investing has moved from being an outlier to dominate financial services

With the surge in ESG assets comes a corresponding swell of regulation designed to ensure financial products meet sustainable objectives and do not fall foul of ‘greenwashing’.

From March 2021, any providers marketing and distributing products in the EU are subject to the Sustainable Finance Disclosure Regulation (SFDR), which imposes mandatory ESG disclosure obligations.

SFDR attempts to provide clarity and consistency for investors and their advisers in identifying sustainability in financial products, with funds receiving classifications from one to nine.

An Article 9 fund is considered dark green, or the most sustainable, and must have a “sustainable investment as its objective or a reduction in carbon emissions as its objective”.

Meanwhile, the UK is formulating its own classification system – the Sustainability Disclosure Requirements (SDR) – and a green taxonomy.

In the US, the Securities and Exchange Commission has announced that it too will introduce a labelling regime while also seeking additional disclosure by ESG funds.

For fund managers who want to distribute funds across each jurisdiction, adhering to the different regimes can present challenges.


However, according to Matt McManus, Managing Associate at Ogier in Jersey, because the Channel Islands are marketneutral, they offer financial services businesses the opportunity to be compliant in multiple jurisdictions. “The neutral position around disclosure standards is

helpful,” he says. “Jersey and Guernsey robustly ensure there’s no greenwashing, but the islands aren’t aligned to particular standards. There is a flexibility for managers to align with SFDR if they are marketing to European investors, or to use another taxonomy that works for the UK or elsewhere.”

He continues: “Managers are grappling with many different divergent regimes, so having a single structure in Jersey that’s compliant with multiple regimes is more efficient.”

In addition, Jersey allows for ESG reporting to be “as reported elsewhere”, which Refson says offers “future proofing as a standard emerges from competing regulations”.

Looking specifically at the SFDR, Refson says there is a “misconception” that for a product to be designated under Articles May/June 2023 55 ▼ European funds

6, 8 or 9 it must be domiciled in the EU. “This is absolutely not the case – indeed structuring these products in Jersey has key advantages,” Refson says.

For example, Jersey managers are only required to make fund-level disclosures in respect of funds that are registered for marketing in the EU. But EU alternative investment fund managers (AIFMs) must comply with additional manager-level provisions, such as publishing information about the integration of sustainability risks in their investment decision-making process, on their websites.

Being outside the EU, Jersey funds are outside the scope of the SFDR when marketing away from Europe.

Refson adds: “Within Europe, Jersey has excellent, longstanding bilateral relationships with the member states of the EU and established market access arrangements via the National Private Placement Regimes rather than the full AIFMD passport.

“This offers managers a more costeffective solution both in terms of set-up and ongoing costs. It is also a faster route to market as a Jersey Private Fund can be established in as little as 48 hours.”

Refson concedes that where AIFMs are registered to market in more than three European jurisdictions or to the retail market, then they “will most likely need to access EU markets via another jurisdiction under the full scope of AIFMD or UCITS”.

But according to EU statistics, this applies to just 3% of AIFMs.

Refson says: “If AIFMs are one of the 97% who do not market so widely within the EU, then Jersey with its European Private Placement agreements offers a far more streamlined, cost-effective and efficient solution outside the full scope of AIFMD.”

Refson argues that these efficiencies directly address some of the concerns that emerging managers have. They are “part of the reason we have over 200 fund managers who use Jersey to distribute

over 370 funds into Europe”, he adds, explaining why Jersey is seeing new and emerging managers establish in the domicile in “record numbers”.

These include Royal Bank of Scotland International, which provided around £2.3bn of climate and sustainable financing to its customers between 2020 and 2021 while driving down its financed emissions.


As part of the commitment to being centres for ESG investing, Jersey’s and Guernsey’s finance centres made their own pledges to align with the Paris Agreement, which aims to limit global warming to 1.5ºC.

Last September, Guernsey Finance, in association with Baringa Partners, produced a roadmap to net zero which pledges to grow the Guernsey green investment sector from a total net asset value of almost £5bn in 2022 to more than £56bn by 2040.

This assumes a “proactive transition strategy and broader suite of products and frameworks, including transition finance and natural capital specifically”.

Meanwhile, in April 2022 Jersey Finance adopted the Carbon Neutral Roadmap, which focuses on further reducing emissions from transport and buildings while exploring sustainability innovations such as blue carbon capture and tidal power that harness and enhance our maritime environment.

European funds 56 May/June 2023
Jersey and Guernsey robustly ensure there’s no greenwashing – but the islands aren’t aligned to particular standards

Refson believes Jersey has made “significant progress” on its net-zero journey – “reducing emissions by more than a third since 1990”.

Alison Cambray, Director and ESG, Sustainability and Net Zero Services Lead for PwC Channel Islands, says it is critical the islands are able to “walk the talk” on sustainability if they are to be taken seriously as sustainable finance centres.

“Both Jersey and Guernsey have made their own domestic ‘net zero by 2050’ commitments, and they are both already well on the way in terms of transition to their own green economies. They can really hold their heads high when it comes to leading by example,” Cambray says.

Cambray notes that as part of their transition to net zero, the islands will need notable private investment, which she says creates an opportunity for domestic investors to support their own green economies.

“If you’re going to have green finance, it’s got to be from a green island, not a grey one. One of the challenges the islands have is how to finance their own netzero commitments. There are some really

interesting conversations going on with the sustainable finance industry about how our expertise can support the transition,” Cambray says.


If the Channel Islands are to position themselves as ESG investment leaders, they will need to show that they have deep pockets of expertise.

Cambray acknowledges that, looking globally, there “aren’t many deep sustainability specialists”. However, she observes a “real shift” in the number of investment professionals gaining requisite ESG investment qualifications.

“There is a really nice community of sustainable finance experts growing on the islands, as well as some interesting technology solutions,” she says.

PwC, along with eight other local business, founded the Jersey Association of Sustainable Practitioners (JASP), which provides a forum through which businesses can collaborate, share experience and best practice and learn from each other to further the sustainability agenda.

“JASP is bringing together a collective voice that helps encourage innovation. Even though the Channel Islands are small, everyone there is working together,” Cambray adds.

And she concludes that this combined effort is paramount if the islands are to build on their ESG investment head-start.

“Sustainable investment is a massive growth area and while we have made great progress, if we don’t keep that momentum there are other jurisdictions that will,” she says. n May/June 2023 57
One of the challenges the islands have is how to finance their own net-zero commitments

Meet Pierpaolo, he’s one of three Masters of Wine here at Waitrose & Partners. He and his team spend their lives searching the planet to find the best wines for our customers. Think of them as your very own sommeliers. Because every single wine we sell has been hand-picked by them.

Pierpaolo, Partner & Head of Wine Buying

Knowledge The

Shorter working week

Talking points

Cancer card

Loyalty card data could help identify people with ovarian cancer, a study led by London’s Imperial College has concluded. Ovarian cancer is notoriously difficult to diagnose, particularly in its early stages. The research, published in JMIR Public Health and Surveillance, looked at whether there is a link between the disease and patterns of buying over-the-counter pain and indigestion medications such as pain killers or antacids. Of the 300 women who participated, it found that pain and indigestion medication purchases were significantly higher in women subsequently diagnosed with ovarian cancer, compared with those who did not have the condition. This change in purchases could be seen eight months before diagnosis.

The world’s biggest trial of a four-day working week has proved a big success, with 92% of participant employers deciding to continue with the policy indefinitely. During the pilot project, employees at 61 companies across the UK worked an average of 34 hours across four days between June and December 2022, while continuing to be paid their existing salary. Subsequently, 56 of those employers have opted to continue with the compressed working week, 18 of them permanently. Staff said their wellbeing and work-life balance had improved, while data showed employees were much less likely to quit their jobs as a result of the fourday-week policy.

Sparkling performance

A study has suggested that drinking fizzy drinks such as Coca-Cola and Pepsi may increase testosterone levels and testicle size in men. The study, conducted by researchers at the Northwest Minzu University in China and published in the scientific journal Acta Endocrinol, set out to determine the impact carbonated beverages had on fertility. Previous studies have suggested fizzy drink consumption might harm reproductive functions, reduce sperm quantity and reduce sperm motility. But in this research project, carried out among groups of male mice, the opposite was found to be true. The study found that the testes of the mice that just drank Pepsi or Coca-Cola were “significantly increased” by day 15 of the trial. Further research is required to establish whether this result would apply to humans.

Best investment

Pensions invested in shares have beaten property as the best place to invest your money over the past 25 years, according to research from wealth manager Schroders. That’s despite the sharp rise in the housing market. According to Schroders, a property worth £100,000 25 years ago would be valued at an average of £454,000 today. But if you’d invested the same £100,000 investment in the global stock market, it would now be worth around £631,000. This is true even in London, where house prices are the highest in the UK – the investment would now be worth around £580,000. In Scotland, meanwhile, it would have grown to just £407,000. According to Schroders, the superior return on the stock market is true over five, 10, 20 or 30 years.

Moonshot munch

In a scenario reminiscent of the movie Martian, the European Space Agency has launched a 12-month study to determine whether food could be grown on the moon. The project, Enabling Lunar In-Situ Agriculture by Producing Fertilizer from Beneficiated Regolith, will study various ways of extracting minerals from lunar soil for hydroponic farming. Regolith is the name of lunar soil, and the ESA’s research, in conjunction with space resource processing company Solsys Mining and two European research institutes, aims to find out whether it will support sustainable hydroponic farming practices – which could be an important step in creating the first colony of settlers on the moon. MAY/JUNE 2023 59
Brain food for the busy business professional The Knowledge is compiled by Alexander Garrett

New in…


lessons learned

How Big Things Get Done: The surprising factors behind every successful project, from home renovations to space exploration

by Bent Flyvbjerg and Dan Gardner (Macmillan, £24, hardback)

Danish professor Bent Flyvbjerg specialises in studying megaprojects that notoriously go wrong. In this book he looks at ambitious plans that have succeeded and failed – and work out what’s made the difference. Among the flops are Sydney Opera House, the movie Heaven’s Gate and the remodelling of a kitchen in Brooklyn. One outstanding success is the Guggenheim Museum in Bilbao, Spain, designed by Frank Gehry. Among the tips: keep things modular, keep it simple – and hire people who are already experienced.

the end point

Ashes To Admin: Tales from the caseload of a council funeral officer by Evie King (Mirror Books, £9.99, paperback)

This book will offer some light relief to those who have a morbid sense of humour. The job of a local authority funeral officer is to bury or cremate those without friends and family – sometimes known as pauper’s funerals. As such, this is a topic that is essentially tragic, although comedy is never far away – the author is herself a former comic who has written for Viz. And in telling the stories of those who have died alone, there is a serious point: shaming us all about how some are left behind and forgotten in our society.

let it all out

It’s OK to be Angry About Capitalism by Bernie Sanders (Allen Lane, £22, hardback)

This book presents the credo of the most explosive figure in liberal politics in America, and the longest serving independent member of Congress. Former presidential contender Bernie sticks the boot into capitalism with gusto, denouncing a system he says is fuelled by greed and rigged against ordinary people. One of the major themes is the rise in inequality and how that’s being driven by technology. He accuses major corporations of contributing towards climate change, dips a finger into the debate about fake news and calls out Jeff Bezos, founder of Amazon, as “the embodiment of the extreme corporate greed that shapes our times”. The book is dedicated to brother Larry, a member of the Green Party in the UK.

top of the world

Lead Sister: The story of Karen Carpenter by Lucy O’Brien (Nine Eight Books, £22, hardback)

This is of course the story of the lead singer of legendary pop duo The Carpenters; the ‘lead sister’ was a moniker she was once given on a Japanese tour. It’s well known that Karen Carpenter died tragically young at the age of 32 after years of struggling with anorexia and poor mental health. She has often been regarded as a victim of the music industry and the powerful interests that sought to control her during her career. In this biography, O’Brien focuses instead on Carpenter’s great achievements as a pioneering woman in the industry. As well as a singer, she was an outstanding drummer, arranger and producer, whose music is as powerful today as during her lifetime.



In numbers: Cannabis


Number of people in the world (2.5% of global population) estimated to use cannabis each year

Source: World Health Organization


To celebrate International Women’s Day, released a white paper showing crowdfunding can be a more productive way for women to start a business. More than 60% of female project owners reported greater confidence, skills and support when starting up this way, and 40% felt they had more access to resources, networks and finance.

Sustainable Energy Finance Association

The SEFA is being launched as a European trade association for the sustainable energy industry in Brussels on 30 May. Part of the PROPEL project to help members implement pathways towards clean energy transition, it will focus initially on the built environment. The broad goals of the SEFA encompass capacity building, communication, finance and policy.

Origins of Life Initiative

Four of the world’s leading universities have teamed up to investigate the origins of life on Earth and look for similar biological processes elsewhere in the universe. Cambridge in the UK, Harvard and Chicago in the US and ETH Zürich in Switzerland launched the Origins Federation in February. Its inaugural science conference will take place at Harvard University on 12-15 September.

AI business tools

Customer relationship management and enterprise resource planning systems have long been mission-critical but often involve manual data entry, content generation and notetaking. Microsoft has launched Microsoft Dynamics 365 Copilot, an AI tool to automate these tasks. It can also help write email responses, draft answers to questions and create an email summary of a Teams meeting.


Percentage of people in the US who say they have tried cannabis

Source: YouGov


Number of states plus Washington DC that have legalised recreational use of cannabis for adults 21 years and older

Source: DISA Global Solutions


Estimated value of the global cannabis market, US dollars

Source: Report Linker


Number used by the cannabis community to designate 10 July a celebratory day, allegedly because upside down it spells OIL

Source: Weedmaps MAY/JUNE 2023 61 The Knowledge

How to… ... resign

Nigel in accounts has just left the company – with a bang. He went out for a liquid lunch, came back railing loudly against the management and then heaved his desktop out of the window onto the pavement below. As security arrived, he shouted: “Don’t worry, I’m leaving anyway!” and stomped out. Surely there has to be a better way…

Follow the rules

Whatever your reasons for moving on, start off by looking up what you contractually signed up to. “Check your contract or your employee manual for the expected notice period, be it two weeks, a month or more,” advises recruiter Robert Walters. “It isn’t just good manners; your termination benefits may depend on it.”

Have a plan

You may or may not have been offered another job. If you have, so much the better; if you’ve simply decided to move on anyway, then you should at least have an idea of what you want to do next and how are you going to achieve it.

If your plan is to change career, then consider whether there is anyone at your current workplace who could help you, or any resources you could legitimately make use of to assist you while you are still there.

Your line manager might be a little more sympathetic if they understand why you are leaving and be more prepared to help with references and other help.

Above all, you need to figure out what you are going to live on in the meantime.

Tell your boss, face to face

“It can be tempting to tell close associates and friends, but the first person who should hear about it is your reporting manager,” advises law firm recruiter Clayton Legal.

If the news comes first from another colleague, says the firm, “it goes without saying that it won’t leave a favourable impression”. Giving the news in person as opposed to by email, say, avoids the risk of misunderstanding and also shows due respect to your line manager.

Be positive and gracious

Far better to leave with the goodwill of your erstwhile employer than under a cloud. It’s not just about obtaining good references – who knows when you will encounter any of the individuals you have worked with in the future? And what if you’re tempted to come back some way down the line?

Stay motivated

It may be hard to stay enthused and quite tempting to slack off when you know that you are leaving anyway.

Avoid that, says Kate Allen, Managing Director of HR specialist Allen Associates. “How you act in your final period is how your employer is likely to remember you, so it’s important to not burn bridges,” she says.

To remain professional and keep motivation, she advises,

“It can be tempting to tell close associates and friends, but the first person who should hear about you resigning is your reporting manager”

prepare a comprehensive handover package for your replacement and ensure all work is signed, sealed and delivered before you go.

Don’t change your mind

If you’re good at your job, it’s always a strong possibility that your employer will make a counter-offer to try and keep you, says Oliver Cooke, Director of international recruitment at US firm Selby Jennings.

“The reality is that they didn’t value you in the first place and they’re only thinking short term,” he points out.

Often that adds up to simply deferring a decision that will soon come back onto the table, says Cooke.

“The majority of people who do take a counteroffer are back in the job market within the next six to 12 months.”

Business leaders on making it to the top

Getting ahead

Jo Huxtable, Taxation Partner, Deloitte Guernsey

How would you persuade a young person starting out that taxation is not boring?

Tax is fascinating and varied; tax law is constantly changing; and you develop a specialism that’s respected and in high demand. You need strong analytical and communication skills to explain complex tax law to clients. You must know your clients, so they want you by their side for significant business events.

Why is Guernsey particularly interesting to work in tax?

Guernsey has its own tax law but is increasingly impacted by complex international tax rules. It’s interesting to engage with colleagues and government on tax policy through consultations, industry associations and working groups.

What do you look for in someone wanting to work at Deloitte?

I’ve an open leadership style and listen to all members of the team, so I’m impressed by curious people who want to share their ideas. Kindness and consideration are vital and I look for a sense of humour – for me, no job is worth it without some laughter!

What did we learn during the pandemic?

Caring for each other is the key to a happy working environment. What stood out for me during the pandemic was that small gestures of kindness go a long way.

How did you get involved in the Guernsey Green Forum?

For our firm and our clients’ businesses, sustainability is a key priority. Collaboration is crucial, so GGF was created as a forum for business leaders to meet and share ideas. I have been vegan for nearly four years, drive an electric car and am interested in how Guernsey can protect its natural environment while becoming more sustainable.

How do you get the best out of living in Guernsey?

I love being outside and have always enjoyed sea swimming, cycling, walking on the cliffs – it’s all on our doorstep and doesn’t cost. I value the island’s sense of community. The 3030 ride, 30 Bays in 30 Days and 12 Bays of Christmas have become non-negotiables in my calendar. I enjoy working closely with Deloitte Guernsey’s charity partner, GROW, and I take full advantage of the Performing Arts Centre and St James, as well as other events from the Literary Festival and Art for Guernsey. MAY/JUNE 2023 63 The Knowledge


Deborah Meaden

One of the stars of TV’s Dragons Den, this businesswoman turned angel investor is perhaps best known as a media personality. Deborah Meaden is far from a conventional business guru – she’s not recognised as a thought leader, she doesn’t teach at any prestigious business schools – but she does represent a progressive role model in the world of business, one who cuts through pretension and obfuscation with a gift for common sense. And she has growing support for her often trenchant viewpoints.

Meaden started working on Dragon’s Den back in 2007, just after she had sold her business Weststar Holidays to a private equity house, and she quickly became established as the Dragon with the kindest and most open approach.

Today she’s added to her portfolio of small business investments with charitable and other purposeful commitments – many in areas about which she cares passionately. Meaden is an ambassador for the RSPB, the World Wildlife Fund and the Marine Conservation Society. She is a patron of Tusk, which champions conservation initiatives across Africa, and supports projects to help struggling people in the

JARGON BUSTER Main character syndrome

developing world. And she’s involved in the campaign to develop clean British energy.

In addition, Meaden co-presents the BBC’s Big Green Money Show and is about to publish a book, Why Money Matters, to help children become financially literate – she says it’s the book she wishes she’d had as a child.

Her key channel as an influencer – far from dry academic journals – is Twitter, where her 670,000 followers hear her views against Brexit, racism, social injustice and salad shortages in supermarkets. Often she says what other business leaders won’t.

What makes Deborah Meaden stand out from most of the world’s do-gooders, though, is that she balances all her progressive views with a powerful pragmatism and enthusiasm for success.

That makes her an attractive proposition for any political party. She has always eschewed any party affiliation, but recently appeared on a platform with Sir Keir Starmer and shadow Chancellor Rachel Reeves, and has expressed a cautious but growing admiration for the Labour leader. Could she be on the verge of dipping a toe as Labour’s ambassador for business?


The guy in the washroom watches himself square-jawed in the mirror as he washes his hands. He raises an eyebrow, winks slowly and turns, unaware you’ve been observing him. Hands dried, he strides meaningfully through the door, shoulders back, with a hint of a smile on his face. He could just be insane, but it’s more likely he’s suffering from Main Character Syndrome, in which individuals imagine themselves to be in a movie or book about their life, in which they are the protagonist. Main Character Syndrome apparently started on TikTok, with users depicting the traits of the main character in a movie via short meme videos. It was picked up by US therapist Kate Rosenblatt, who saw this as a psychological condition. On the one hand, it is intensely narcissistic. Phil Reed in Psychology Today says Main Character Syndrome is born of the digital age. “Social media just makes it very much easier and quicker for anybody to present a false version of themselves,” he argues. It is also a condition you are likely to encounter at work – the colleague who thinks he’s David Brent or the boss who sees himself as Lord Sugar.


No landing scenario Scenario for the economy where growth continues and inflation refuses to come down
Staying in a job you hate and letting everyone know it
Deborah Meaden often says what other business leaders won’t

Top tech

Game on


It could be the name of a computer game – Battle of the boxes – in which a megacorporation from the US and a megalith from Japan face off to win consumers’ hearts and minds. In fact, it’s real life – and the prize at stake is the hardware market for computer gaming itself.

When Microsoft announced its $69bn agreed bid to buy games publisher Activision Blizzard – creator of Call of Duty, Word of Warcraft and Candy Crush – in January 2022, few imagined the move would lead to mortal combat between Microsoft, maker of the Xbox, and its rival Sony, the company behind PlayStation.

That’s what’s happened, with each seeing the deal as a pivotal episode in the fight to be the world’s dominant games console.

Things came to a head in February this year when the UK’s Competition and Markets Authority, which had launched an investigation into the transaction last September, ruled that the takeover should be halted, on the grounds that it would result in higher prices and less competition for UK gamers.

“Our job is to make sure that UK gamers are not caught in the crossfire of global deals that, over time, could damage competition and result in higher prices, fewer choices, or less innovation,” explained Martin Coleman, chair of an independent panel conducting the CMA investigation.

What is really at stake is the claim by Sony that it will no longer be able to host Call of Duty, the world’s biggest computer game franchise, on PlayStation; or that the price may be raised to an uncompetitive level, or the quality of game be degraded on PlayStation.

To counter that, Microsoft has offered Sony a 10-year licensing deal to distribute Call of Duty on its console. It also pointed out that Sony has far more exclusive games on its console than Microsoft does.



The DJI Avata Pro-Combo drone offers an immersive flight experience you can control with hand and head movements – the closest thing to being a bird. £1,249

The stakes have become even higher since the US Federal Trade Commission and EU regulators also launched their own enquiries into the Microsoft Activision bid.

The CMA’s final decision on its investigation, which was due on 26 April after Businesslife went to press, will be pivotal.

Whereas the deal looked almost certain to be blocked, some believe it’s now tilting in favour of Microsoft, especially since a judge acting for the FTC ordered Sony to hand over a large number of documents relating to thirdparty licensing agreements, which Microsoft demanded.

If it does get the go-ahead, Microsoft says it will still only be the third biggest gaming company, after China’s TenCent and Sony. But that neatly side-steps the fact that TenCent’s offer is aimed predominantly at the domestic Chinese market.

So the genuine contest for worldwide domination will be very much between Sony and Microsoft – with the US company at last in the ascendancy.


The Therabody Wave Roller is a Bluetooth-enabled foam roller that uses vibration therapy and a wave-style texture, to work out all your aches and pains.

£125 www.therabody. com/uk/en-gb/ wave-roller-uk. html MAY/JUNE 2023 65 The Knowledge

The allure of alternatives

The asset classes and sectors most popular for investors seeking ESG exposure

ESG asset classes


Bonds/fixed income


Multiple answers allowed. Which asset classes and sectors do you use to gain exposure to ESG?

Equities (80%) and bonds (58%) remain the most popular asset classes to gain exposure to ESG among global investors, according to the Capital Group ESG Global Study. But, last year, investors increased their usage of alternatives (47% vs 41% in 2021), real estate (27% vs 24%) and particularly commodities (25% vs 8%).

This indicates stronger appetite for inflation-linked assets. While inflation has been rising since 2021 as

economies emerge from the pandemic and struggle with supply-chain shortages, the crisis in Ukraine has exacerbated this trend.

Emerging markets are also a more popular way to gain exposure to ESG (36% vs 28% in 2021). This may indicate that some investors see the ESG of developed markets as a crowded space and are searching for untapped, idiosyncratic opportunities further afield.

Source: Capital Group ESG Global Study 2022

Data focus
2021 2022
markets Emerging markets Real estate Commodities

The point of change.

We know there is no one-size-fits-all. This is why our sustainable investment and legal experts work with clients on bespoke solutions for turning sustainability and impact goals into action across the investment lifecycle.


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