RBI joins with 12 other regulator to tackle greenwashing risk

Subject: Economy

Section: Monetary Policy

Concept :

The Global Financial Innovation Network (GFIN) is organizing its first-ever Greenwashing TechSprint to combat greenwashing risks in financial services.
The Reserve Bank of India (RBI) has announced its participation among 12 other international regulators in this initiative to develop a tool that helps the market and regulators address the issue.
The central bank noted the number of investment products marketed as ‘green’ was growing.

Greenwashing risks:

Greenwashing risks in financial services refer to the practice of making exaggerated, misleading, or false claims about the environmental, social, and governance (ESG) characteristics of investment products or services.
This is done to attract investors who are interested in sustainable or responsible investing, but can ultimately result in harm to the environment or society.

Global Financial Innovation Network (GFIN)

Global Financial Innovation Network (GFIN), an international network of more than 50 regulatory agencies worldwide working together to support financial innovation in the best interests of consumers.
Formally launched in January 2019, GFIN seeks to provide a more efficient way for firms to interact with regulators as they seek to develop, execute, and distribute new innovations.
GFIN also creates a new framework for cooperation between financial services regulators on innovation-related topics as they share different experiences and approaches.

The three main functions of GFIN are to:

Act as a network of regulators to collaborate and share experiences of innovation in respective markets, including emerging technologies and business models
Provide a forum for joint policy work and discussions
Give firms an environment that allows for trials of cross-border solutions