The fourth edition of Guernsey Finance's Sustainable Finance Week kicked off with a keynote address from environmentalist and financier Ben Goldsmith, who reminded the audience: "There is a mystery in our connection with nature which has been lost on us, until we are bereaved or we are ill or we have some existential moment and then we suddenly find that nature is a lot more important to us than we thought."
Two panel sessions tackling the opportunities arising from net zero commitments in the insurance and funds sectors followed, with the Dignitary Address delivered by the Guernsey Financial Services Commission's Co-Director of Authorisations and Innovation Division, Alison Gavey.
If you missed the afternoon, here's our round-up of some of the key themes discussed throughout the sessions.
Biodiversity can help us fix the climate crisis
Ben Goldsmith made the point that, with the right conditions, nature recovers incredibly quickly, and when we allow our land to rewild, we can reduce flooding or improve the quality of our water. He said: 'If we restore the functionality of nature, on top of all the things it does for us, it will also be our main ally in fixing the climate problem.'
Innovation and collaboration
From using protected cell company structures to insure nascent carbon removal projects, to clever thinking in Build Back Better initiatives, the insurance industry is tackling some of the challenges posed by climate change in new and innovative ways.
Industry stalwarts are also collaborating with new companies to test the use of satellites and AI to collect and model data on future climate risks or Scope 3 emissions.
Tonia Plakhotniuk, Vice President of Climate & ESG Capital Market, NatWest, shared the challenges of reporting on nature-based investment opportunities. However, the new companies coming to market with real-time impact investment data was a welcome development.
Holistic impact of carbon markets
The $14m restoration of mangroves in Pakistan through the voluntary carbon and biodiversity markets was cited as an example of a significant carbon offset project with a tangible nature-positive impact. For instance, mangroves create a buffer for Tsunami flooding, saving lives and homes; they provide a breeding ground to restore fish stocks and are a popular tourist destination.
Standards are driving the market
Regulations, standards and frameworks are seen positively by investors who want transparent disclosures because they struggle with analysing the data themselves. Tonia said: "Increasingly, we are seeing investors perceiving the objectives of the regulations as a critical opportunity and something that drives the market."
Alison Gavey, Guernsey Financial Services Commission's Co-Director of the Authorisations and Innovation Division, announced that the GFSC is launching a discussion paper on the International Sustainability Standard Board's (ISSB) inaugural sustainability-related disclosure standards - IFRS S1 and IFRS S2.
More knowledge is needed
Natallia Dorfman, CEO and Co-Founder of Kita Earth Ltd, talked about the knowledge gaps in the insurance sector, explaining that it's hard to hire experience when a sector is so new, and there is a need to learn how insurance and other financial instruments can be used to value nature. Learning how to integrate new ways of data collection with legacy systems also needs to happen at pace.
A new initiative, the Sustainable Finance Education Series, was announced by Guernsey Finance's Sustainable Finance Council, which is teaming up with the GTA University Centre and industry experts to deliver a series of education seminars that will tackle Guernsey's sustainable finance skills and development.
A Guernsey Finance survey identified the appetite for the Sustainable Finance Education Series, which assessed local sustainable finance skills, talent levels and gaps.
Changing needs of investors
John Pepin, Chief Executive of Philanthropy Impact, cited recent research which shows that Millennials and Gen Z do not feel their investment advisers are meeting their ambition to invest in responsible and sustainable focused initiatives. He warned the audience that the wealth transfer could also see the next generation switching advisers if they did not keep up with changing trends.
Amy Lazenby of Close Asset Management shared her experiences on the interest from investors in impact reporting, which needs to be tangible and relatable, not just data. She said: "Communication is really important; we have moved on from a world where clients just want to see financial impact."
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