Feedback on proposals regarding sustainable finance

Executive summary

Introduction

This paper summarises the feedback received from stakeholders and provides our response to our consultation on proposals regarding sustainable finance (jerseyfsc.org) (CP) published on 27 May 2025, which focussed on two key areas of Jersey’s sustainable finance (SF) framework:

• integration of sustainability-related risks into governance, risk management and internal systems and controls
• enhancement of anti-greenwashing measures to ensure sustainability-related claims are fair, clear and substantiated

Background 

The CP emphasised the importance of advancing the actions set out in the Government of Jersey’s Sustainable Finance Action Plan. It proposed next steps for registered persons governed by the Codes of Practice to address emerging challenges in SF.

Building on the anti-greenwashing requirements for sustainable investments introduced in 2021, the CP posed five questions related to proposals for incorporating sustainability-related risks and business integrity risks into our regulatory framework. Its aim was to gather views from industry stakeholders on the potential impact that the proposed changes to the Codes of Practice might have on the sectors affected. 
We received 20 formal responses to the CP from a diverse group of stakeholders, including supervised entities across various financial services sectors, industry associations, professional services firms, and sustainability consultants. In addition, 23 people attended and shared their views directly at our three drop-in sessions.

We are grateful to everyone who took the time to submit responses and participate in the sessions and to Jersey Finance for hosting and helping arrange the engagements.

International context

The international conversation on SF is rapidly evolving, even in the short period since our CP was published. Globally, governments and regulators are recalibrating their approach, aiming to balance advancing sustainability objectives and pursuing growth and competitiveness goals. For example, the European Union has proposed simplifying reporting under the Corporate Sustainability Reporting Directive (CSRD), reducing the number of companies in scope. The United Kingdom is developing its own Sustainability Disclosure Standards based on the International Sustainability Standards Board (ISSB) framework, focussing on climate transition planning and assurance. In the United States, the Securities and Exchange Commission has withdrawn its defence of climate disclosure rules, creating uncertainty around future requirements.

These developments reinforce the need for Jersey to adopt a pragmatic and proportionate approach to SF, ensuring industry is provided with support and guidance to identify and mitigate their sustainability-related risks in a way which is not unduly burdensome and enables Jersey to remain competitive.

Feedback summary

The core themes arising from the feedback received were:

• policy intent: there was broad support for our SF policy intent, but differing views on implementation. Increasing cost of compliance was cited as a negative impact, including the potentially disproportionate impact on smaller firms. It was acknowledged that it is important to progress SF objectives in a way that is right for Jersey, but responses were split on whether the proposals helped or hindered competitiveness.
• Codes versus guidance approach: many respondents felt that current Code requirements for risk management already provided the basis for us to require sustainability risks to be addressed. Referring to sustainability specifically was therefore considered unnecessary and potentially detrimental to other risks posed to industry. Almost everyone supported the need for further guidance to clarify our expectations in respect of sustainability risk.
• defining terms: there was a consensus requesting clear definitions of terms such as ‘sustainability risk’, ‘materiality’ and ‘proportionality’ to support the consistent application of the proposed changes.
• de minimis exemption: the majority of respondents opposed a de minimis exemption, citing risks of creating a ‘two-tier’ system and reputational harm. Instead, there was support for an emphasis on a proportionate approach to implementation.
• business integrity risks: there was strong support for strengthening requirements in line with international standards. Suggestions were made to replace the word “credible” with “robust” evidence, which aligns with UK FCA terminology and mitigates the implication of perceived truth with the use of the word credible.

Policy position and next steps

We have carefully considered the responses received, recognising there are various perspectives held within industry on Jersey’s approach to SF. We are committed to the island’s Sustainable Finance Action Plan and playing our part in ensuring we future-proof the financial services industry. Our policy intent remains the same, although the feedback we have received has led us to adjust the method of implementation, ensuring it remains proportionate and pragmatic for the island. The following outlines our policy response and next steps:

• sustainability related risks: we have accepted the position that existing Codes provide an appropriate foundation for risk management, including sustainability risks, without the need for further enhancement. Our policy position remains that firms are expected to consider sustainability risks and remain accountable, but we agree that our expectations should be clarified. We will not introduce new Code provisions at this stage and will instead issue guidance, developed with industry, to clarify expectations and provide practical examples of how sustainability-related risks should be considered within existing frameworks.
• business integrity risks: we will proceed with enhancements to the Codes of Practice (principle 7), including requiring sustainability-related claims to be supported by robust evidence. This will bring closer alignment with the FCA’s approach, helping to reflect the desire for consistency across group structures. 

A Sustainable Finance guidance note, covering sustainability-related risks and business integrity risks, will be published in Q1 2026. Revised Code provisions on anti-greenwashing will follow a one-year transition period, with full implementation by Q1 2027.
To support this process and ensure the guidance meets the needs of local industry, we will work with industry on its development before publication and the start of the transition period.

Read our full feedback paper on proposals regarding sustainable finance.