Environmental, social and governance criteria are on the agenda again in Jersey, with the isle's Financial Services Commission proposing a fresh set of onerous disclosures for financial firms to make to it and to their clients.

Greenwashing (lying about one's fund or firm to make it seem more ecologically responsible than it is) is a phenomenon of growing concern to the regulator, largely because it wants to please the European Union, where the European Securities and Markets Authority has introduced regulations to make disclosures more numerous and exact. Although the regulator is touting its plans as suggestions, it seems likely that it wants to carry them all without substantial changes. At one point in the consultative paper it makes the assertion: "The proposal here represents the appropriate response for Jersey."

The proposals are likely to affect private funds with ESG products/investments (some of which have to operate in compliance with the Jersey Private Fund Guide, more of which later), CIF funds (presumably funds that have to comply with the Collective Investment Funds (Jersey) Law 1988) that have ESG products/investments, unregulated and non-dom funds (and their connected local service providers) with ESG products/investments and investment advisors.

Regulators want to change the Certified Funds Code of Practice, the Fund Services Business Code of Practice and the Jersey Private Fund Guide to say that if a fund has environmental, sustainable, or socially responsible investments (ES investments), it ought to:

• produce a public statement (perhaps in its prospectus) of its ES investments;
• implement and undertake an investment management process consistent with the ES investments which obliges it to verify and create documents of "the ESG credentials of the investment in the due diligence process" by way of "recognised taxonomy" and to review that every year; and
• have the appropriate corporate governance and organisational structure to implement and monitor the investment management process in respect of the ES investments.

This last includes access to resources with the appropriate skills and experience and appropriate reporting lines. The regulator wants to insert a new paragraph to this effect in the corporate governance section of the two codes of practice and the section that governs eligibility criteria in the JPF guide.

It also wants to change the Investment Business Code of Practice to say more or less the same thing.