A financial future ‘where the value of money is questioned’

A ‘REVOLUTION’ is taking place in the finance world that will see environmental and social factors become increasingly important and the value of money questioned, a leading consultant has told the finance sector.

Andrew Mitchell (Matt Porteous, supplied by Crystal PR) (30366461)
Andrew Mitchell (Matt Porteous, supplied by Crystal PR) (30366461)

Speaking at the launch of Jersey Finance Ltd’s sustainable finance strategy, Andrew Mitchell, chief executive of Equilibrium Futures, said that the Island’s largest sector would need to adapt to changing attitudes towards investment, with the owners of wealth increasingly turning towards ‘environmental, social and governance’ goals, also known as ESG, when investing.

Mr Mitchell said that the Island would have an outsized influence on the worldwide drive towards being more sustainable and eco-friendly, because of the huge sums of capital it handled, and had to be prepared for this.

‘We live in a small island, but with a big voice. The finance that’s associated with Jersey is in excess of a trillion dollars,’ he said.

‘And the money that flows through the Island is affecting millions of people around the world. The G of ESG in Jersey is shining – we are efficient, we are transparent and we have an enviable reputation for the way in which money is managed in the Island.

‘But we might ask ourselves, is this going to be enough to keep up the top position in the future? Things are changing. The purpose of this new sustainable finance strategy is to put Jersey in a position to get ahead of that wave in the revolution that’s occurring in finance around the world. The very purpose of money is being questioned.’

He said that in future investments would not just be measured in terms of their monetary return, but also on their social, human and ecological impact.

‘What is the purpose of a firm or purpose of your portfolio? In the past it was possible really just to look at the bottom line and profits. That was the only thing that we really looked at,’ he said.

‘But now the planet matters. Therefore in the future, companies are going to be measuring their economic health, not just due to financial capital, but they’re also going to be looking at human capital, social capital and yes, natural capital.

‘That will be the new health of the business and indeed in the future, your portfolio. How do we set out on this path and what should Jersey be doing? What should all of us in the finance industry here be thinking about? That’s what this sustainable finance vision and policy can explain in the next few years,’

The sustainable finance strategy was unveiled as part of the a new report, Jersey for Good: a Sustainable Future, which makes the case for Jersey’s finance industry to support the transition to a more sustainable future, while setting out a vision and objectives for where the Island should be by 2030. The report include an initial two-year ‘pathway’ to deliver on those objectives.

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