Sustainable finance remains a priority across global financial centres, but the path to effective regulation has often been uncertain. The Jersey Financial Services Commission (JFSC) has recently published its feedback on the May 2025 consultation, setting out a measured response that balances industry feedback with international expectations

The outcome is pragmatic: no new regulatory obligations for sustainability risk management, but new requirements to address greenwashing. For firms in Jersey, this provides welcome clarity and time to prepare.

Sustainability risk management – no new Code requirements

One of the most notable outcomes is what will not change. Despite early proposals, the JFSC listened to respondents and has decided against introducing sustainability-specific risk management provisions into the Codes of Practice (Codes).

Respondents argued that existing frameworks, particularly Principle 3 of the Codes, already oblige firms to address all material risks, including sustainability risks. The regulator has agreed, confirming that no additional obligations will be added to the Codes.

Instead, the JFSC will publish a comprehensive guidance note in Q1 2026, setting out how firms should interpret existing requirements in the sustainability context.

Anti-greenwashing – enhanced Code provisions

Where the JFSC has acted more decisively is on sustainability-related claims. New Code requirements will be introduced to ensure that any claim made in marketing, reporting or client communications is backed by robust evidence.

This aligns Jersey with the UK's Financial Conduct Authority, which has adopted the same terminology. The word "robust" replaces the earlier proposal for "credible" evidence, a subtle but important shift that sets a higher bar.

Implementation will be phased: guidance in Q1 2026, followed by a 12-month transition. From Q1 2027, all sustainability claims must meet the new evidential standard. For firms, this means beginning the work now to audit existing claims and build stronger assurance processes.

Industry feedback and international context

The JFSC received 20 formal responses from across banking, investment, trust and professional services. Feedback showed broad support for the overall policy intent but flagged concerns about regulatory burden, particularly for smaller firms.

A common theme was the need for proportionate application, with most respondents preferring detailed guidance over hard-coded obligations. Calls for a "de minimis" exemption based on firm size were not adopted, with the JFSC preferring proportionate supervision instead.

This more balanced approach mirrors international developments. The EU is simplifying aspects of CSRD reporting, the UK is developing standards based on the ISSB framework, and the US SEC has stepped back from defending its climate disclosure rule. Jersey's alignment with these shifts underlines its competitiveness while maintaining regulatory credibility.

Practical implications for firms

For now, there are no immediate compliance changes. The practical roadmap looks like this:

• Q4 2025: Continue applying existing risk frameworks to sustainability risks. Begin preparations for anti-greenwashing requirements.
• Q1 2026: Guidance note published, consultation on implementation, new business integrity Code provisions take effect.
• Q1 2027: Full implementation of anti-greenwashing provisions. All sustainability claims must be backed by robust evidence.

Firms making sustainability-related claims should start reviewing their processes now. That includes testing the evidence used to support public statements, reviewing disclosure practices, and preparing to demonstrate substantiation to regulators, boards and clients alike.

The regulatory landscape will continue to develop, with detailed JFSC guidance expected in Q1 2026 and international frameworks evolving. Firms that stay current, rather than waiting until deadlines approach, will find implementation more manageable.

Key takeaways

• Proportionate approach adopted: The JFSC has chosen guidance over prescriptive new Code obligations.
• Anti-greenwashing priority: From 2027, all sustainability claims must be backed by robust evidence.
• Existing frameworks leveraged: Firms should continue applying current Codes of Practice to sustainability risks.
• International alignment: Terminology and approach are consistent with the FCA, and mindful of EU and US developments.
• Time to prepare: The phased implementation gives firms a clear window to audit, adapt and strengthen their processes.

Conclusion

The JFSC's response strikes a careful balance between advancing sustainable finance and maintaining Jersey's competitiveness. By focusing on anti-greenwashing while leveraging existing risk frameworks, the regulator has addressed industry concerns without losing sight of international expectations.

For financial services firms, the message is clear: take advantage of the transition period, start testing the evidence behind your sustainability claims, and prepare for closer scrutiny from 2027.