RBI collaborates with GFIN to prevent ‘greenwashing’:
The Reserve Bank of India (RBI) has joined forces with the Global Financial Innovation Network (GFIN) to participate in the Greenwashing TechSprint. The event aims to address concerns surrounding exaggerated, misleading, or unsubstantiated claims related to environmental, social, and governance (ESG) credentials. The TechSprint will bring together 13 international regulators, firms, and innovators to develop a tool that could help regulators and the market more effectively tackle the risks of greenwashing in financial services.
RBI’s participation in the TechSprint:
The RBI will be among the 13 international regulators taking part in GFIN’s Greenwashing TechSprint. The central bank has invited Indian firms to participate in the event and has opened the application window for all India-based firms and innovators to apply. The window will close on May 21, 2023. RBI will participate in a virtual TechSprint hosted on the Financial Conduct Authority’s (FCA) Digital Sandbox.
Objective of the TechSprint:
The objective of the Greenwashing TechSprint is to develop a tool that can help regulators and the market more effectively tackle or mitigate the risks of greenwashing in financial services. Firms will get the opportunity to work with regulatory experts, a variety of stakeholders, and professionals from across the globe to develop the tool. The TechSprint will launch on June 5, 2023, and will run for three months, ending with a showcase day in September 2023.
Support for firms interested in participating:
The GFIN will provide an information pack for firms interested in participating in the event to support the application process. Firms that are successful in their applications will proceed through to on-boarding, which will take place on June 1 and 2. This will provide firms with training on the Digital Sandbox and an in-depth overview of the TechSprint process.
Addressing concerns of greenwashing:
The TechSprint aims to address concerns surrounding greenwashing, which is the practice of making exaggerated, misleading, or unsubstantiated claims about the environmental benefits of a product, service, or investment opportunity. Greenwashing can mislead investors and consumers and harm the overall goal of promoting sustainable finance. The development of a tool to tackle greenwashing risks in financial services is, therefore, an important step towards promoting transparency and credibility in ESG investing.