Sir Roger Gifford, a former Lord Mayor of London and UK head of Skandinaviska Enskilda Banken since 2000, was in Jersey last week to talk to Jersey Finance members about the potential for green and impact investment.
Speaking to the JEP afterwards, Sir Roger said that while there is still some way to go, the financial markets are increasingly embracing the need to invest in carbon-reducing activities. This revolution was taking place partly because of the public’s growing concerns about the environment, and green investing is good for reputational reasons and so could counter complaints about some of the activities of the finance sector. However, although the political and credit risks remain, it is also becoming a good investment.
For example, Sir Roger said that risks in the oil industry due to a spillage were now higher than investing in renewable energy, and so industry and investors can boost their environmental reputation and have a better return by investing in renewables.
‘A very large proportion of the market wants to invest in ESG portfolios,’ he said. ‘It is definitely a good investment on its own, such as with the obvious opportunities in the manufacture of batteries, for example.
Innovative financial products such as green mortgages, can also help make it cheaper to buy a property that is energy efficient and therefore cheaper to run and a better investment.
‘There is a great opportunity for Jersey to become more involved in these developments which are very popular and so could balance out the criticism of offshore finance centres that we still hear,’ Sir Roger said.
The compilers of the Global Financial Centres Index recently launched the first Global Green Finance Index and Jersey was ranked 20 out of 47 for Green Finance Quality. Now Jersey Finance is also looking at how the Island could be made more attractive for impact investing which, according to the Global Impact Investing Network, ‘is made into companies, organisations and funds with the intention to generate measurable social and environmental impact alongside a financial return’.
The results of the research by Jersey Finance are due in August.
