Sustainability is the future

17 December 2019

Finance industry experts have been told that a continued focus on sustainability in life and investment is coming, and is irreversible.

Macroeconomist and author Sony Kapoor said sustainability is the future “whether you believe in it or not”.

As keynote speaker at the Guernsey Private Wealth Forum in London, he said: “The direction of change couldn’t be clearer – carbon taxes, and environment legislation is not going to get easier, we all know for sure, whether that is within next six months or five to 10 years, the direction of legislation is very clear.

“If you do not think that sustainability is going to affect your top and bottom line, and even your ability to actually stay in business, you’re really kidding yourself. In finance, invest in these businesses – sustainability is out there, along with demographics, regulation and technology, as the big secular trends which will shape future profitability and losses in the financial sector.

“People around you are changing their minds and changing them fast. There was a time when it was OK not to believe in sustainability, but that time will not last, and the sooner we recognise it, the better it is going to be from a purely risk-return perspective.

"There was a time when it was OK not to believe in sustainability, but that time will not last, and the sooner we recognise it, the better it is going to be from a purely risk-return perspective."

“You don’t want to be saddled with the losses when they come, as they surely will, and you will want to be ahead of the curve to try and leverage the huge opportunities across business lines and finance sector that sustainability is going to bring about.

“And you can have comfort in 2019 of not being too ahead of the curve. In 2019 technology, regulation and opinion on climate change, have all arrived at a point where early movers who get burned have already been burned.

“This is the cusp of the big opportunity, and I hope we’re all in it together, as definitely Guernsey is.”

Mr Kapoor, who was a special adviser to the UN Environment Programme on green finance, said that the biggest advantages in green finance investment were in unlisted, venture capital and private equity, which played well to Guernsey’s strengths.

“Having that core bedrock of institutional capacity to service private wealth gives Guernsey a competitive advantage, and in particular looking at sustainability plays, firms still in the unlisted space will be the future unicorns, and Guernsey will be at a big competitive advantage.”

In Guernsey 2019 has seen the continued development of Guernsey Green Finance and its cornerstone product, the Guernsey Green Fund, the world’s first regulated green fund product.

“Having that core bedrock of institutional capacity to service private wealth gives Guernsey a competitive advantage, and in particular looking at sustainability plays, firms still in the unlisted space will be the future unicorns, and Guernsey will be at a big competitive advantage.”

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