The channel island of Guernsey has launched a new regulated fund structure for firms launching strategies with a commitment to mitigating environmental damage.

Guernsey Finance, the trade group set up to promote Guernsey’s financial services sector, announced the new fund structure as part of its plans to “become the ‘go-to’ international finance centre for green finance”.

Under the rules outlined on Tuesday, fund firms will need to have 75% of assets in a strategy meeting specific green criteria. Permitted investment areas include renewable energy, efficient energy generation, energy efficiency, agriculture, waste and waste water and transport, the trade group said.

In a media statement, Andy Sloan, acting director of Strategy at Guernsey Finance, said the channel island’s financial centre has already been recognised in a recent index of green finance centres.

He explained: “Guernsey has already been highlighted as an ‘emerging global contender’ in the inaugural Green Global Finance Centres index, launched by the think tank Z/Yen.

“This move puts us at the forefront of green finance development, and particularly the emerging area of green funds. Guernsey’s reputation in the sector and the breadth of our funds offering positions us perfectly.”

The new rules for the fund structure use an internationally-recognised set of green criteria, developed by the joint finance group of multilateral development banks.

Emma Bailey, director of the Investment Supervision and Policy Division at the Guernsey Financial Services Commission, said: “The Guernsey Green Fund Rules provide a framework upon which international green investments can be encouraged and facilitated in the Bailiwick of Guernsey.

“The rules assure investors that their money contributes to initiatives that have positive environmental results while being well regulated.”