Guernsey Green Funds

This will give assurance to investors that, by investing in a Guernsey Green Fund, their investments made will be making a positive environmental impact on the planet and which are being monitored against internationally recognised criteria.

Dr Andy Sloan of Guernsey Finance has been principally responsible for introducing this new and innovative regulatory mark, which complies with the internationally agreed objectives of COP 21 set down at the United National Climate Change Conference.

The new rules provide that a Guernsey Green Fund must be established with the objectives of:

• seeking a return for investors;
• spreading risk; and
• mitigating environmental damage.

A Guernsey Green Fund can be established using any of the existing Guernsey fund structures, for example a Guernsey Private Fund or an open ended Guernsey Class B Scheme.  Funds can be registered or authorised, open ended or closed ended.

The Guernsey Green Fund logo is being registered as a trade mark with Guernsey’s Intellectual Property Office website.

In order to obtain a mark, a fund must be established and operated in accordance with the Guernsey Green Fund rules.  However any Guernsey Fund where 75% of assets and value “meet specified green criteria, including investment in areas such as renewable energy, efficient energy generation, energy efficiency, agricultural, waste, waste water and transport” is eligible to apply for the mark.  The green criteria can be verified by:

• a certificate from a suitable independent third party confirming that the prospectus for the Fund meets the notified green criteria; or
• a declaration from a Guernsey licensed fund manager or administrator to that effect.

The first regulatory mark for a Guernsey Green Fund was awarded in October 2018 to a fund which invests in sustainable food processing and production in Europe and Australasia.

In most cases the board of both the Fund and the Manager will agree to voluntary apply environmental, social and governance (“ESG) principles to the investment analysis and decision making process which relate to the relevant Guernsey Green Fund.  This will ensure appropriate governance within the fund and so further support the green initiative.

In conjunction with this funds initiative, The International Stock Exchange has introduced a green market segment for green investments that make a positive impact on the environment.  This is available for any type of green investment fund but can also be used for bonds and trading companies in the green space.

The ZEDRA Funds team is keen to support the Guernsey Green Funds initiative and is currently assisting managers who wish to establish funds which qualify for the new green fund mark. ZEDRA plans to be one of the leading administrators in the green sector.

Please contact Mark Cleary for more information.