Environmental, Social and Governance (ESG)

The Sustainable Finance Roadmap is a strategic document which outlines areas of significant opportunity for financial services businesses in the Isle of Man to develop new product and service lines to meet rapidly increasing global demand for sustainable investments. Supported by plans to develop a new regulatory framework and upskilling programme, the Roadmap sets out an implementation framework of two years through 2025 and 2026.

The document presents 10 targeted actions spread across four development pillars and was developed in collaboration with the Ireland-based International Sustainable Finance Centre of Excellence (ISFCOE), supported by extensive research and stakeholder engagement.

The Authority will assist on Pillar 1: Enabling Environment, the aim of which is to:

• Build upon the Island’s existing foundational policy and regulatory environment to accelerate the growth of sustainable finance.
• Develop a best practice policy, regulatory and assurance framework that creates a foundation for integrating sustainability into all financial activities.

Within Pillar 1 there are five actions, of which the Authority will lead on two actions and collaborate with other key stakeholders on three further actions.

The actions the policy will lead on are:

• Action 2: Assist in embedding climate and nature-related financial risks into governance and risk management systems
• Action 3: Reinforce the existing strong and proactive regulatory conduct supervisory approach

This work will be conducted over 2025 and 2026.

The actions the Authority will collaborate on are:

• Action 4: Explore the feasibility of developing a sustainable investment product label framework
• Action 5: Improving transparency on climate and sustainability including sustainable finance disclosures
• Action 6: Developing a strategy to enable sustainability goals to be achieved across the spectrum of Isle of Man financial services

This work will be conducted over 2025, 2026 and into 2027.

The Authority will also provide support to Pillars, 2, 3 and 4 (mobilising capital, developing capacity, and promotion and communication) as and when required.

Dedicated Resource

To enable the Authority to meet its obligations under the roadmap, it is onboarding a dedicated Sustainable Finance and ESG Adviser. This role is being funded by IOMSFI.

Working with regulated firms

A key priority for the Authority is to understand how risks related to the climate, environment and nature could manifest themselves in firms we regulate, with particular reference to our regulatory objectives, and in the context of our wider approach to risk-based supervision. 

As part of the Authority’s early strategy development, we have started to liaise with a cohort of larger firms, particularly those in the banking and insurance sectors, to better understand how climate, environmental and nature risks feature in their thinking. 

Common themes that have emerged so far include a focus on financial, reputational and regulatory risks, and the importance of culture.

Firms have also highlighted opportunities in areas such as sustainable investments and finance.

The Authority encourages firms to review their business models to understand any material climate-related and environmental risks that they may be directly or indirectly exposed to, and to consider what action they could take to mitigate any risks.

By way of background, studies have estimated that 70% of CO2 emissions are driven by consumer behaviour. Banks and financial institutions can be key enablers in fighting climate change because they see and process all our transactions. This provides them with a wealth of information about consumption patterns and preferences and they are well placed to support, encourage and accelerate the Island’s transition to a lower carbon economy. Large parts of our finance sector also operate internationally, so the positive impact they can have can extend well beyond our own shores.

The Authority has access to, and engages with, various international regulatory bodies to develop awareness, understanding and capabilities on how to respond to climate-related risks.

Network for Greening the Financial System (NGFS)

The Authority is a member of the NGFS, a network of central banks and supervisors who share best practices and contribute to the development of environment and climate risk management in the financial sector. The NGFS also supports the mobilisation of finance to support the transition toward a sustainable economy.

Information about the NGFS is available here.

Sustainable Insurance Forum (SIF) and International Association of Insurance Supervisors (IAIS)

The Authority is part of the SIF, a network of leading insurance supervisors and regulators seeking to strengthen their understanding of, and responses to, sustainability issues for the business of insurance. It is a global platform for knowledge sharing, research and collective action. The Authority contributes to ongoing work streams of the SIF and learns from the expertise within the network to develop its understanding of sustainability within the insurance sector.

Information about the SIF is available here.

The International Association of Insurance Supervisors (IAIS)

The Authority is also a member of IAIS, the global standard-setting body responsible for developing and assisting in the implementation of principles, standards and guidance as well as supporting material for the supervision of the insurance sector.  The IAIS works closely with a number of partners, most notably the SIF, in addressing the risks and opportunities from climate change.

Information about the IAIS is available here.

International Organisation of Securities Commissions (IOSCO)

The Authority is a member of IOSCO, which in October 2018 established its Sustainable Finance Network (SFN). The SFN provides a forum for members to exchange experiences, and gain a better understanding of, various sustainable finance issues. The SFN also acts as a vehicle for carrying out collaborative work on common regulatory and supervisory issues and acts as the IOSCO central point for dialogue and exchange of views with other bodies in this area.

Information about IOSCO is available here

Basel Committee on Banking Supervision (BCBS) and the Financial Stability Institute (FSI)

The BCBS is the primary global standard setter for the prudential regulation of banks and provides a forum for regular cooperation on banking supervisory matters.  Membership of the BCBS is restricted but the BCBS consults with non-members when developing policy.

Information about the BCBS is available here

Being socially responsible and a good corporate citizen are important to the Authority and its employees.

Duties under the Climate Change Act 2021

As a public body and statutory board, the Authority has certain Climate Change Duties, under the Climate Change Act 2021. In summary, these are requirements for how public bodies must undertake their functions to best support the Isle of Man in moving towards a low emissions society. The Authority is classified as a “Category B” public body for this purpose, being a public body with fewer than 150 FTE staff.

A Sustainable Authority

In addition to its legal obligations the Authority has, more generally, set out to make a positive contribution to the Island community and the wider environment by:

• Establishing a dedicated environment team to help steer the Authority to be greener in its own operations
• Being a UNESCO Biosphere Isle of Man partner
• Recycling paper, cardboard plastic, cans, glass and milk cartons
• Litter picking – the Authority has formally ‘adopted’ nearby streets in partnership with Plastic Busters
• Running a library to read–reuse–recycle
• Holding and attending virtual meetings where appropriate instead of travelling
• Supporting the Isle of Man Government’s Cycle to Work Scheme to promote active travel

As part of our wider ESG initiatives, every year our staff raise money for a local charity. The nominated Charity of the Year for 2024 is the Alzheimer's Society IOM, while previous fundraising efforts have supported the Family Library, Isle Listen and Remember Me.

News and updates

The Authority continues to assess its response to climate change and will provide updates on developments, papers and articles that it publishes.

During 2024 relevant staff members have trained in Carbon Literacy through The Carbon Literacy Project.

Public Bodies – Climate Change Reporting

The Authority provides data in line with requirements under the Climate Change (Public Bodies Reporting Requirements) Regulations 2022, as amended by the Climate Change (Public Bodies Reporting Requirements) Amendment Regulations 2023. The latest report is available to view here.