A Very Relevant Topic
'Environmental Social and Governance Investing' was the keynote speaker topic at both the May 2022 Guernsey Fund Forum (Darshini David, Author, Economist and Broadcaster), and the MSI Global Alliance conference (Sofia Santos, Lisbon School of Economics and Management), which also took place May 2022.
The reason ESG is becoming main-stream is that it is business and therefore economically critical. It also allows financially savvy investors, investment managers, investment advisors, family offices, private equity and the public to financially benefit from staking their financial vote in companies who are looking to better the global status quo.
Repercussions of this Investment Trend
We are seeing two areas of activity driven by these investment trends;
- Clients taking ESG positions, within their managed investment portfolios, in companies and funds which have ESG credentials which those clients have a particular affinity for,
- Clients establishing bespoke structures to create a tailored ESG strategy which covers their often very specific, areas of ESG / impact investing interest.
The first trend is generally very well catered for, with internal ESG experts and third party investment managers making equity and fund investment recommendations.
Second Trend and Guernsey PIFs
The second trend is more interesting and often involves the establishment of special purpose structures, which can be a registered and regulated fund, for a small number of (generally less than 50) investors. The Guernsey Private Investment Fund (PIF) is ideally suited to these new, bespoke ESG strategy funds.
In particular, we are seeing family office and private equity investors with very specific and niche areas of ESG investment interest, who are just not catered for by main-stream ESG funds.
Guernsey Green Fund Accreditation
Guernsey ESG PIFs can also apply for Guernsey Green Fund accreditation.
The objective of the Guernsey Green Fund is to provide a platform upon which investments into various green initiatives can be made. This enhances investor access to the green investment space, by providing a trusted and transparent product which contributes to the internationally agreed objective of mitigating environmental damage and climate change.
Investors in a Guernsey Green Fund are able to rely upon the Green Fund designation, provided through compliance with the Guernsey Green Fund Rules, to present a scheme that meets strict eligibility criteria of green investing and has the objective of a net positive outcome for the planet's environment.
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