As published by Guernsey Finance, Tuesday October 29, 2019.
High-profile protests and campaigns have not managed to significantly mobilise capital from the private wealth and family office sector into green and sustainable finance, according to new research from Guernsey Finance.
The sector is increasingly important for attracting investment and although significantly more capital is finding a home in green investments, individuals and family offices appear to be looking for greater confidence in returns and in the green credentials of their investments.
The research, carried out with some 20 family offices and high net worth individuals, with a combined estimated worth of £25 billion, and 50 service providers, earlier this year, showed more focus is needed in engagement with investment managers and investors on the aims of green and sustainable finance and the benefits of responsible investing.
Importantly, investors also wanted greater certainty in the green credentials of their investment – a framework for private capital in the unregulated space, analogous to the Guernsey Green Fund regulatory framework, which would provide confidence to investment managers and investors, was key to unlocking the flow of investment capital from private investors, family offices and private equity into the green and sustainable investment space.
“Significantly more capital is finding a home in green investments, driven by the increased concerns of the younger generation of wealth owners, but greater confidence in returns and greater confidence in the ‘greenness’ of the underlying investment – the ‘twin confidences’ – are both required to catalyse a modal shift in deployment of private capital to climate finance,” said Dr Andy Sloan, Deputy Chief Executive, Strategy, at Guernsey Finance.
The research also showed only half the owners of wealth surveyed were considering increasing asset allocations into green and sustainable finance, and the enthusiasm for doing so is being driven by the younger generation (under-40s).
Guernsey Finance launched the research report at a London event with Guernsey resident Stephen Lansdown, co-founder of Hargreaves Lansdown, who runs his family office business from the island and has considerable interest in green and sustainable investing and investing in Africa.
Guernsey, located in the Channel Islands between the UK and France, is an independent dependency of the UK Crown. It is outside of the EU but is granted access to European markets through demonstrated regulatory compliance. Its finance industry is regulated, governed and operated by pragmatic domestic institutions to the highest international standards. Guernsey has approximately 1,000 investment funds domiciled or serviced in the island, 150 licensed fiduciaries and 800 licensed insurance vehicles.