Treasury Advisory Panel

WQ.210/2025

WRITTEN QUESTION TO THE MINISTER FOR TREASURY AND RESOURCES BY DEPUTY H.L. JEUNE OF ST. JOHN, ST. LAWRENCE AND TRINITY QUESTION SUBMITTED ON MONDAY 12th MAY 2025

ANSWER TO BE TABLED ON MONDAY 19th MAY 2025

Question

"Given that responsible investment policy is a key part of the Government's States Investment Strategies (R.185/2024) report, will the Minister –

1. advise who the members of the Treasury Advisory Panel (TAP) are, and if this information is not public, explain why not;
2. outline what experience in Responsible Investment or Environment, Social and Governance (ESG) investing the members of TAP have, and whether this experience forms part of the TAP recruitment criteria;
3. explain how the TAP 'fully integrate ESG considerations into the investment process' as mentioned in Appendix 6E, section 1.22 of the report;
4. explain how the TAP influences the responsible investment approach of managers as described in Appendix 6E, section 1.22 of the report; and
5. provide an update on work to identify measurable benchmarks to monitor alignment with United Nations Sustainable Development Goals (SDGs) as mentioned in Appendix 6E, section 1.31 of the report, and advise when this work will be completed, whether it will be made public, and if not, why not?"

Answer

1. advise who the members of the Treasury Advisory Panel (TAP) are, and if this information is not public, explain why not;

The Treasury Advisory Panel is composed of a combination of States officers and independent non-

executive members from industry. The current members are:

• Lynn Cleary, Independent Chair

• Paul Dentskevich, Non-Executive Member

• Jonathan Freeman, Non-Executive Member

• Hugh Smart, Non-Executive Member

• Richard Bell, Treasurer of the States

• Thomas Holvey, States of Jersey Economist

2. outline what experience in Responsible Investment or Environment, Social and Governance (ESG) investing the members of TAP have, and whether this experience forms part of the TAP recruitment criteria;

TAP members are appointed based on a diverse range of investment and governance skills that, when combined, support the effective oversight of the States' investment portfolios. In today's investment environment, ESG and Responsible Investment considerations are not separate or optional disciplines, but are fundamental components of portfolio construction, risk management, and long-term value generation.

TAP members collectively have significant experience in applying ESG and RI principles across investment mandates. Their professional backgrounds include directorships in impact funds and environmental focussed strategies, and boards of notable entities who were early adopters of climate- related risk disclosures and broader sustainability frameworks.

Recognising that ESG is a fast-evolving area of focus globally, TAP is supported by Aon, a leading investment consultancy with specialist expertise in sustainable investing. Aon advises a broad range of institutional investors on how best to integrate ESG considerations into investment decision-making, and their research capability and access to subject-matter experts ensures TAP is well positioned to align its oversight and the portfolio with best practice as standards and expectations continue to evolve.

Experience in ESG and Responsible Investment formed an integral part of the TAP recruitment process. The competitive appointment process, overseen by the Appointments Commission, included evaluation of candidates' understanding of ESG and RI concepts. This ensures that TAP has both the technical expertise and the strategic insight to meet the Minister's expectations for responsible stewardship of public funds.

3. explain how the TAP 'fully integrate ESG considerations into the investment process' as mentioned in Appendix 6E, section 1.22 of the report;

TAP does not make direct investment decisions but instead implements the Ministers investment strategy through the appointment and oversight of specialist investment managers. ESG considerations are fully integrated through both the initial selection of these managers and their ongoing monitoring. TAP recognises its duty to act responsibly when making recommendations on investments held on behalf of the States of Jersey. An understanding of financially material considerations, including environmental, social, and governance (ESG) factors, is essential to identifying both long-term investment opportunities and potential financial risks.

TAP believes that companies are unlikely to outperform their peers over time unless they properly consider the broader consequences of their actions, including how they treat all stakeholders. For instance, businesses that contribute significantly to pollution may face regulatory, reputational, and financial headwinds that present real risks to investment portfolios. TAP therefore expects high-quality investment managers to assess a wide range of risks, including ESG, as part of their investment decision-making processes. TAP actively seeks to appoint managers who exemplify this approach.

While ESG considerations are always taken into account, the method and depth of integration will appropriately vary by asset class and investment strategy. For example, an equity manager may have greater scope to implement a robust ESG policy than a manager overseeing a portfolio of short-dated government bonds.

4. explain how the TAP influences the responsible investment approach of managers as described in Appendix 6E, section 1.22 of the report;

TAP influences the responsible investment approach of its managers through a structured and ongoing oversight framework that begins at the point of manager selection and continues throughout the duration of the investment relationship.

Managers are assessed not only on their financial performance, but also on their risk management, which includes the strength, clarity, and implementation of their responsible investment policies. ESG integration is expected to be appropriately tailored to each mandate and asset class, acknowledging that implementation will differ by strategy.

Once appointed, managers are subject to ongoing monitoring and engagement. A key component of this is a structured rolling programme of quarterly meetings, where managers report on overall performance, including ESG developments, policy updates, and broader industry trends. These meetings provide a regular forum for TAP to assess whether ESG considerations remain central to the manager's approach.

Where TAP identifies a failure by a manager to adequately address ESG risks, it treats this as it would any other control failure. Initial steps involve direct engagement and dialogue. However, if a manager fails to respond with prompt and comprehensive remediation, TAP retains the right to take further actionup to and including the termination of the mandate.

TAP's monitoring process includes a number of regular benchmarking exercises, including monitoring of voting patterns, carbon emission reporting, and other ESG relevant metrics. This structured programme of assessment and dialogue will continue into 2025, ensuring ESG integration remains a central component of ongoing manager oversight, and reflects an evolving landscape of industry standards and quality of available information. This comprehensive framework ensures that ESG considerations are not only a factor at the point of selection, but are continually reinforced through active oversight and engagement.

5. provide an update on work to identify measurable benchmarks to monitor alignment with United Nations Sustainable Development Goals (SDGs) as mentioned in Appendix 6E, section

1.31 of the report, and advise when this work will be completed, whether it will be made public, and if not, why not?"

TAP has initiated work to explore how the Common Investment Fund (CIF) could be aligned with the United Nations Sustainable Development Goals (SDGs). As part of this work, TAP is engaging with investment managers to understand how their investment strategies currently align with the 17 SDGs, and to assess the feasibility of tracking this alignment at a portfolio level.

This is a developing area, and the work is ongoing throughout 2025. Once complete, TAP will consider how best to report on the findings. At present, no decision has been made on whether this work will be made public; this will depend on data availability, reporting consistency across managers, and whether meaningful, comparable metrics can be disclosed in a way that adds transparency without misrepresenting progress or outcomes.