Consultation on proposals regarding sustainable finance

the Action Plan

The Government of Jersey’s Sustainable Finance Action Plan (21 Nov 2024)

Banking Code

Code of Practice for Deposit-taking Business

Banks

Deposit-taking Business

CIF

Jersey Collective Investment Funds

CIF Code

Certified Funds Code of Practice

Codes of Practice

Collectively, related to this consultation paper only, they include:

• CIF Code
• Banking Code
• FSB Code
• GIMB Code
• IB Code
• InsB Code
• MSB Code and
• TCB Code

Commission Law

Financial Services Commission (Jersey) Law 1998

CSD

Corporate sustainability disclosures

EU

The European Union

FSB Code

Code of Practice for Fund Services Business

FSB

Funds Services Business, has the same meaning as in Article 1 of the Financial Services (Jersey) Law 1998, as amended

GIMB

General Investment Mediation Business, has the same meaning as in Article 1 of the Financial Services (Jersey) Law 1998, as amended

GIMB Code

Code of Practice for General Insurance Mediation Business

IB

Investment businesses, has the same meaning as in Article 1 of the Financial Services (Jersey) Law 1998, as amended

IB Code

Codes of Practice for Investment Business

InsB

Insurance Business

InsB Code

Codes of Practice for Insurance Business

JFL

Jersey Finance Limited

JFSC

Jersey Financial Services Commission

MSB

Money Service Business, has the same meaning as in Article 1 of the Financial Services (Jersey) Law 1998, as amended

MSB Code

Code of Practice for Money Service Business

registered person

A person who is registered, or holds a permit or certificate, as applicable, under one or more of the Banking Business (Jersey) Law 1991, the Collective Investments Funds (Jersey) Law 1988, the Financial Services (Jersey) Law 1998 and the Insurance Business (Jersey) Law 1996

TCB

Trust Company Business, has the same meaning as in Article 1 of the Financial Services (Jersey) Law 1998, as amended

TCB Code

Code of Practice for Trust Company Business

UK

United Kingdom

To include wording referencing the integration of material sustainability-related risks, opportunities and impacts into business operations (e.g., business model, strategy, risk assessment) and financial activities; and engage with these risk management measures in a way that is proportionate and reflect their nature, and the size and scale of the business.

To include wording related to ensuring adequate business resumption, disaster recovery and contingency arrangements are in place and tested at appropriate intervals to safeguard against disruption of services and operations, and to mitigate risk, such as sustainability-related risk.

To seek viewpoints on the potential for a ‘de minimis’-rule whereby smaller businesses are excluded from the proposed amendments of this sustainability risk section.  

3.2.6        Question 1 

Do you have any general observations on, or concerns relating to the proposal concerning corporate governance?

If you do, please state in detail what your observation or concern is and the reason for it.

In considering your response, please categorise your support level by marking the relevant option:

(i)       No comments

(ii)      Supports

(iii)    Supports with concerns

(iv)    Concerns

3.2.8    Question 2

Do you have any general observations on, or concerns relating to the proposal to include the business resumption, disaster recovery and contingency arrangements wording?

If you do, please state in detail what your observation or concern is and the reason for it.

In considering your response, please categorise your support level by marking the relevant option:

(i)       No comments

(ii)      Supports

(iii)    Supports with concerns

(iv)    Concerns

3.2.10    Question 3

What would the appropriate criteria look like for incorporating a de minimis rule that excludes smaller businesses from needing to comply with the requirements relating to sustainability risk as set out above under Section 3.2?

Are they best determined by their number of employees, turnover, assets under management etc., or a combination of several criteria?

Is a de minimis rule for small businesses desired?

To include a new Code on sustainability-related claims regarding the registered person, products and services, highlighting that such claims must be backed by credible evidence, and must not be unclear, misleading or unfair.

3.3.5        Question 4 

Do you have any general observations on, or concerns relating to the proposal of a new Code concerning sustainability-related claims regarding the registered person, products and services?

If you do, please state in detail what your observation or concern is and the reason for it.

In considering your response, please categorise your support level by marking the relevant option:

(i)             No comments

(ii)             Supports

(iii)            Supports with concerns

(iv)            Concerns

3.4.1          Question 5 

Are there any impacts on your business arising from the proposed changes that you wish to provide comment on, or are there any other comments you wish to provide?

9

Question 1:

Do you have any general observations on, or concerns relating to the proposal concerning corporate governance?

If you do, please state in detail what your observation or concern is and the reason for it.

In considering your response, please categorise your support level by marking the relevant option:

(i)               No comments

(ii)              Supports

(iii)            Supports with concerns

(iv)            Concerns

9

Question 2:

Do you have any general observations on, or concerns relating to the proposal to include the business resumption, disaster recovery and contingency arrangements wording?

If you do, please state in detail what your observation or concern is and the reason for it.

In considering your response, please categorise your support level by marking the relevant option:

(i)               No comments

(ii)              Supports

(iii)            Supports with concerns

(iv)            Concerns

10

Question 3:

What would the appropriate criteria look like for incorporating a de minimis rule that excludes smaller businesses from needing to comply with the requirements relating to sustainability risk as set out above under section 3.2?

Are they best determined by their number of employees, turnover, assets under management etc., or a combination of several criteria?

Is a de minimis rule for small businesses desired?

10

Question 4:

Do you have any general observations on, or concerns relating to the proposal of a new Code concerning sustainability-related claims regarding the registered person, products and services?

If you do, please state in detail what your observation or concern is and the reason for it.

In considering your response, please categorise your support level by marking the relevant option:

(i)               No comments

(ii)              Supports

(iii)            Supports with concerns

(iv)            Concerns

11

Question 5:

Are there any impacts on your business arising from the proposed changes that you wish to provide comment on, or are there any other comments you wish to provide?

Section 3.1 Notes – Corporate governance

Current Note:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions.

Risk management is an integral part of the corporate governance framework.

In the context of Principle 3, “risk” refers to all the risks that a Fund faces, or may face, as a business enterprise. With respect to unit trusts and limited partnerships, the JFSC anticipates matters such as corporate governance (and compliance with the Code generally) to be part of the Fund Services Business Agreements entered into by the trustee or general partner on behalf of the Fund.

Proposed change to Note:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions.

Risk management is an integral part of the corporate governance framework.

In the context of Principle 3, “risk” refers to all the risks that a Fund faces, or may face, as a business enterprise. This will also include the integration of material sustainability-related risks, opportunities and impacts into:

(i) financial activities and

(ii) business operations (e.g., business model, strategy, risk assessment).

These risk management measures should be implemented in a proportionate way to reflect the nature, size and scale of the business.

With respect to unit trusts and limited partnerships, the JFSC anticipates matters such as corporate governance (and compliance with the Code generally) to be part of the Fund Services Business Agreements entered into by the trustee or general partner on behalf of the Fund.

Section 3.2.1.2 Code under Internal systems and controls

Current Code:

Ensure that adequate business resumption, disaster recovery and contingency arrangements are in place and tested at appropriate intervals;

Proposed Code:

Ensure that adequate business resumption, disaster recovery and contingency arrangements are in place and tested at appropriate intervals to safeguard against disruption of services and operations, and to mitigate risk, such as sustainability-related risk.

Section 7.3 Code – A new Code proposed: Section 7.3.10 Code

Current Code:

Advertisements in respect of the Fund (whether issued by the Fund or its fund service providers) must not contain: (…)

[New sub-section of Code]

Proposed new Code:

Advertisements in respect of the Fund (whether issued by the Fund or its fund service providers) must not contain: (…)

Sustainability-related claims, whether concerning the Fund, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.

Section 3.1.8 Notes

Corporate governance

Current Note:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions. Risk management is an integral part of the corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise.

Proposed change:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions. Risk management is an integral part of the corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise. This will also include the integration of material sustainability-related risks, opportunities and impacts into:

(i) financial activities and

(ii) business operations (e.g., business model, strategy, risk assessment).

These risk management measures should be implemented in a proportionate way to reflect the nature, size and scale of the business.

Section 3.2.1.3 Code under Internal systems and controls

Current Code:

Ensure that adequate business resumption, disaster recovery and contingency arrangements are in place and tested at appropriate intervals;

Proposed Change:

Ensure that adequate business resumption, disaster recovery and contingency arrangements are in place and tested at appropriate intervals to safeguard against disruption of services and operations, and to mitigate risk, such as sustainability-related risk.

Under Principle 7: “A registered person must not make statements that are misleading, false or deceptive”.

Under Section 7.2 Code - a new Code proposed:

Section 7.2.9 Code

Current Code:

An advertisement must not contain: (…)

[New sub-section of Code]

Proposed new Code:

An advertisement must not contain: (…)

Sustainability-related claims, whether concerning the registered person, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.

Under Principle 7: “A registered person must not make statements that are misleading, false or deceptive”.

Under Section 7.3 Code - a new Code proposed:

Section 7.3.3 Code

Current Code:

An advertisement made in a written or broadcast form must not contain: (…)

[New sub-section of Code]

Proposed new Code:

An advertisement made in a written or broadcast form must not contain: (…)

Sustainability-related claims, whether concerning the registered person, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.

Section 3.1.8 Notes

Corporate governance

Current Note:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions. Risk management is an integral part of the corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise.

Proposed change:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions. Risk management is an integral part of the corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise. This will also include the integration of material sustainability-related risks, opportunities and impacts into:

(i) financial activities and

(ii) business operations (e.g., business model, strategy, risk assessment).

These risk management measures should be implemented in a proportionate way to reflect the nature, size and scale of the business.

Section 3.2.1.4 Code under Internal systems and controls

Current Code:

Ensure that adequate business resumption, disaster recovery and other contingency arrangements are in place and tested at appropriate intervals;

Proposed Change:

Ensure that adequate business resumption, disaster recovery and other contingency arrangements are in place and tested at appropriate intervals to safeguard against disruption of services and operations, and to mitigate risk, such as sustainability-related risk.

Under Principle 7: “A registered person must not make statements that are misleading, false or deceptive”.

Under Section 7.2 Code - a new Code proposed:

Section 7.2.9 Code

Current Code:

An advertisement must not contain: (…)

[New sub-section of Code]

Proposed new Code:

An advertisement must not contain: (…)

Sustainability-related claims, whether concerning the registered person, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.

Under Principle 7: “A registered person must not make statements that are misleading, false or deceptive”.

Under Section 7.3 Code - a new Code proposed:

Section 7.3.3 Code

Current Code:

An advertisement made in a written or broadcast form must not contain: (…)

[New sub-section of Code]

Proposed new Code:

An advertisement made in a written or broadcast form must not contain: (…)

Sustainability-related claims, whether concerning the registered person, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.

Section 3.1.8 Notes

Corporate governance

Current Note:

1 Corporate governance is the system by which a company is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the company and sets out the rules and procedures for making decisions. Risk management is an integral part of a corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a permit holder faces, or may face, as a business enterprise.

Proposed change to Note:

1 Corporate governance is the system by which a company is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the company and sets out the rules and procedures for making decisions. Risk management is an integral part of a corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a permit holder faces, or may face, as a business enterprise. This will also include the integration of material sustainability-related risks, opportunities and impacts into:

(i) financial activities and

(ii) business operations (e.g., business model, strategy, risk assessment).

These risk management measures should be implemented in a proportionate way to reflect the nature, size and scale of the business.

Section 3.2.2 under Section 3.2.2.10 Code Internal systems and controls

Current Code:

A permit holder’s internal systems and controls must ensure that: (…)

Adequate business resumption, disaster recovery and contingency arrangements are in place and are tested at appropriate intervals.

Proposed Change:

Adequate business resumption, disaster recovery and contingency arrangements are in place and are tested at appropriate intervals to safeguard against disruption of services and operations, and to mitigate risk, such as sustainability-related risk.

Under Section 7.6 Code - a new Code proposed:

Section 7.6.10 Code

Current Code:

An advertisement must not contain: (…)

[New sub-section of Code]

Proposed new Code:

An advertisement must not contain: (…)

Sustainability-related claims, whether concerning the permit holder, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.

Section 3.1.8 Notes

Corporate governance

Current Note:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions. Risk management is an integral part of the corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise.

Proposed change to Note:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions. Risk management is an integral part of the corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise. This will also include the integration of material sustainability-related risks, opportunities and impacts into:

(i) financial activities and

(ii) business operations (e.g., business model, strategy, risk assessment).

These risk management measures should be implemented in a proportionate way to reflect the nature, size and scale of the business.

Section 3.16 Code under Internal systems and controls

Current Code:

A registered person’s systems must ensure that: (…)

Adequate business resumption, disaster recovery and other contingency arrangements are in place and tested at appropriate intervals.

Proposed Change:

Adequate business resumption, disaster recovery and other contingency arrangements are in place and tested at appropriate intervals to safeguard against disruption of services and operations, and to mitigate risk, such as sustainability-related risk.

Under Section 7.3 Code - a new Code proposed:

Section 7.3.3 Code

Current Code:

An advertisement must not contain: (…)

[New sub-section of Code]

Proposed new Code:

An advertisement must not contain: (…)

Sustainability-related claims, whether concerning the registered person, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.

Section 3.1.3 Notes

Current Note:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise.

Proposed change to Note:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise. This will also include the integration of material sustainability-related risks, opportunities and impacts into:

(i) financial activities and

(ii) business operations (e.g., business model, strategy, risk assessment).

These risk management measures should be implemented in a proportionate way to reflect the nature, size and scale of the business.

Section 3.2.3 Code under Internal systems and controls

Current Code:

A registered person must ensure that its internal systems and controls provide reasonable assurance that: (…)

[No Code currently]

Proposed new Code:

A registered person must ensure that its internal systems and controls provide reasonable assurance that: (…)

Adequate business resumption, disaster recovery and other contingency arrangements are in place and tested at appropriate intervals to safeguard against disruption of services and operations, and to mitigate risk, such as sustainability-related risk.

Under Section 4.4 Code

Current Code:

A registered person must ensure that its advertising and promotional literature is clear, fair, reasonable and is not deceptive or misleading.

Proposed change:

A registered person must ensure that its advertising and promotional literature is clear, fair, reasonable and is not deceptive or misleading.

It must not contain sustainability-related claims, whether concerning the registered person, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.

Section 3.1.3 Notes

Current Note:

1 Corporate governance is the system by which a company is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the company and sets out the rules and procedures for making decisions. Risk management is an integral part of a corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise.

Proposed change to Note:

1 Corporate governance is the system by which a company is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the company and sets out the rules and procedures for making decisions. Risk management is an integral part of a corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise. This will also include the integration of material sustainability-related risks, opportunities and impacts into:

(i) financial activities and

(ii) business operations (e.g., business model, strategy, risk assessment).

These risk management measures should be implemented in a proportionate way to reflect the nature, size and scale of the business.

Under Section 3.2.2 Code - Section 3.2.2.9 Code under Internal systems and controls

Current Code:

A registered person’s systems and controls must ensure that: (…)

Adequate business resumption, disaster recovery and contingency arrangements are in place and are tested at appropriate intervals;

Proposed change:

A registered person’s systems and controls must ensure that: (…)

Adequate business resumption, disaster recovery and contingency arrangements are in place and are tested at appropriate intervals to safeguard against disruption of services and operations, and to mitigate risk, such as sustainability-related risk.

Under Section 7.6 Code - a new Code proposed:

Section 7.6.9 Code

Current Code:

An advertisement must not contain: (…)

[New sub-section of Code]

Proposed new Code:

An advertisement must not contain: (…)

Sustainability-related claims, whether concerning the registered person, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.

Section 3.1.4 Notes

Corporate governance

Current Note:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions. Risk management is an integral part of the corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise.

Proposed change to Note:

1 Corporate governance is the system by which an organisation is directed and controlled. A corporate governance framework specifies the distribution of rights and responsibilities among different participants in the organisation and sets out the rules and procedures for making decisions. Risk management is an integral part of the corporate governance framework. In the context of Principle 3, “risk” refers to all the risks that a registered person faces, or may face, as a business enterprise. This will also include the integration of material sustainability-related risks, opportunities and impacts into:

(i) financial activities and

(ii) business operations (e.g., business model, strategy, risk assessment).

These risk management measures should be implemented in a proportionate way to reflect the nature, size and scale of the business.

Section 3.2.1 under Section 3.2.1.3 Code Internal systems and controls

Current Code:

A registered person must: (…)

Ensure that adequate business resumption, disaster recovery and other contingency arrangements are in place and tested at appropriate intervals.

Proposed Change:

Ensure that adequate business resumption, disaster recovery and other contingency arrangements are in place and tested at appropriate intervals to safeguard against disruption of services and operations, and to mitigate risk, such as sustainability-related risk.

Under Principle 7: “A registered person must not make statements that are misleading, false or deceptive”.

Under Section 7.2 Code - a new Code proposed:

Section 7.2.9 Code

Current Code:

An advertisement must not contain: (…)

[New sub-section of Code]

Proposed new Code:

An advertisement must not contain: (…)

Sustainability-related claims, whether concerning the permit holder, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.

Under Section 7.3 Code - a new Code proposed:

Section 7.3.3 Code

Current Code:

An advertisement made in a written or broadcast form must not contain: (…)

[New sub-section of Code]

Proposed new Code:

An advertisement made in a written or broadcast form must not contain: (…)

Sustainability-related claims, whether concerning the permit holder, products or services, that are unclear, misleading or unfair. Claims must be backed up by credible evidence.