At a glance guide to Guernsey Green Funds

At a glance guide to Guernsey Green Funds

Guernsey is one of the world's leading funds domiciles, with a pedigree stretching back more than 50 years. The net asset value (NAV) of funds under management and administration in Guernsey amounted to £288.8 billion, as at 30 September 2024, with the total NAV of Guernsey Green Funds hitting £5 billion.

The Guernsey Green Fund regime is designed to provide investment managers with an opportunity to assure investors that their investments are contributing to initiatives that have a positive environmental impact on the planet and, in doing so, inspire confidence that their investments are well regulated.

The island is the number one choice for non-UK entities listed on the London Stock Exchange and is one of just five non-EU jurisdictions to have been given an "unqualified and positive assessment" by the European Securities and Markets Authority (ESMA) for a third-country passport under the Alternative Investment Fund Managers Directive (AIFMD).

Ogier's partner-led team of Guernsey investment funds specialists advise on all stages of the investment funds life-cycle, with particular expertise in sustainable investment, and work closely with colleagues from our BVI, Cayman, Dubai, Guernsey, Hong Kong, Ireland, Jersey, London, Luxembourg, Shanghai and Tokyo offices.

5 things to know about the Green Fund regime

• A Guernsey Green Fund must comply with one of the lists of criteria endorsed by the Guernsey Financial Services Commission (GFSC) in Schedule 2 of the Guernsey Green Fund Rules, where the fund's governing body selects the most appropriate standards

• The current standards include the Common Principles for Climate Migration Finance Tracking and the European Taxonomy for Sustainable Activities

• The designation is verifiable on the GFSC's website and is evidenced by the use of the Guernsey Green Fund kitemark

• A Guernsey Green Fund can voluntarily apply environmental, social and governance (ESG) principles to the investment analysis and decision-making processes of the fund and disclose that fact

• Third-party monitoring and verification of adherence to the disclosed investment criteria on a monthly basis required

5 things to know about our Green Fund approvals

• Regulatory designation obtained in up to fi­ve days

• Any class of Guernsey fund can apply to be designated as a Guernsey Green Fund whether registered or authorised, open-ended or closed-ended providing it meets the eligibility criteria

• The chosen green criteria must be set out in the notification to the regulator and in the prospectus, together with the criteria for the spread of risk

• 75% of assets by value must meet the notified green criteria with the remainder invested more broadly, but must not lessen the overall objective of mitigating environmental damage and must not be invest in certain proscribed asset classes

• The Guernsey administrator must provide a declaration to the regulator that the fund meets the Green Criteria and provide either a third-party certification or self-certification. A Guernsey licensed manager (if there is one appointed) may also provide a self-certification