About sustainable finance

Sustainable finance is the process of integrating environmental, social, and governance (ESG) factors into financial decision-making. While profit and economic growth remain important, the long-term sustainability of both people and the planet is also a key driver in today’s financial landscape.

Environmental considerations might include reducing greenhouse gas emissions, investing in renewable energy, or preserving biodiversity.

Social considerations, such as promoting equality, diversity, and inclusion, are essential for fostering responsible and inclusive business practices.

Governance involves aspects such as management structures, executive remuneration, and employee relations. Ensuring robust governance practices helps align a company's objectives with ESG factors.

However, with the rise of sustainable finance comes the risk of greenwashing, where businesses falsely portray themselves as more sustainable than they are. This misleads investors who seek to make positive impacts with their investments. To combat this, the Jersey Financial Services Commission introduced anti-greenwashing codes of practice in 2021 for several sectors.

Sustainable finance offers exciting opportunities to make a positive impact, but it requires careful consideration to avoid misleading claims. Investors need to stay informed and be vigilant when making investment decisions in this area.