RBI to Join Global Financial Innovation Network (GFIN)’s Greenwashing Techsprint

Latest Context

Recently, RBI has opened the application window for all India-based firms and innovators to participate in GFIN’s first-ever Greenwashing TechSprint.

TechSprint: It will address GFIN’s priority on Environmental, Social and Governance (ESG) by bringing together 13 international regulators (including RBI) including firms and innovators to mitigate the risk of greenwashing in financial services.

Greenwashing: It is a marketing that portrays an organization’s products, activities or policies as producing positive environmental or social outcomes, or avoiding environmental or social harm when this is not the case.

ESG framework: It helps stakeholders to understand how an organization is managing risks and opportunities related to ESG criteria. India is gradually moving towards ESG regulations with the introduction of the Business Responsibility and Sustainability Reporting (BRSR) framework by SEBI. It aims to establish links between the financial results of a business with its ESG performance. It was made mandatory for the top 1,000 listed entities (by market capitalization) from 2022–23.

Global Financial Innovation Network

• Genesis: It was formally launched in 2019 by an international group of financial regulators and related organisations.
• Objective: Its objective is to support financial innovation in the best interests of consumers and to create a new framework for cooperation between financial services regulators on innovation-related topics.
• Members: It consists of 70 organisations all over the world including RBI.
• Functions: It performs the following functions that are as follows

Focus on Emerging Technology: To identify gaps in the regulatory ecosystem by focusing on emerging technology at a cross-sectoral level.

As a Surveillance Tool: It lays emphasis on spotting issues before they can crystallize and cause harm.

Gather data and insights: It gathers insights from global markets and regulators on emerging technology and trends in addition to running collaborative data-focused activities.

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