UK think tank announces new blockchain initiative to track ethical finance
The Responsible Finance & Investment Foundation (RFI) has announced the creation of a blockchain tool to track companies’ sustainable commitments and improve transparency and accountability in the responsible finance industry.
The CDIT Initiative aims to use the power of blockchain to build trust within a decentralized network
The CDIT Initiative, a multi-stakeholder partnership between financial institutions and civil society, aims to use blockchain and its ability to build trust within a decentralized network to promote greater trust between the financial sector and civil society.
It is based on dialogue during a roundtable on “Blockchain for Sustainable & Inclusive Finance” held as part of the RFI Summit 2018 and hosted by Thomson Reuters. The foundation will work with a group of 23 other signatories to develop the tool over the coming year.
According to the RFI Foundation, the rationale for the CDIT Initiative is the fact that despite massive growth in financial assets being invested sustainably – $22.89tn of assets as of the end of 2016 – trust in the financial system has barely risen since 2009.
The initiative aims to tackle two related issues facing the responsible finance industry globally in taking action to rebuild trust.
First, financial institutions’ commitments in line with existing responsible finance initiatives have not translated into rebuilding trust with society because of the presence of a small number of institutions who are using the growth of responsible finance to ‘greenwash’ their image.
Second, financial institutions who have recently embraced responsible finance face large informational barriers in translating general responsible finance principles into concrete actions that have been shown to be successful.
Blake Goud, CEO of RFI Foundation, said: “We must engage with all the relevant stakeholders including the financial industry, FinTech, blockchain companies and civil society, to create a more inclusive future to ensure that we leave no one behind. Together, we can create a database with time-secured commitments and actions that can improve the effectiveness of existing sustainable & inclusive finance initiatives.
“This provides a real-time way to track what the financial industry has committed to, and how much these commitments are translated into action. We hope to see the development of a shared repository of data on financial industry actions on responsible finance that is treated as a ‘public good’ to be used for the collective benefit of the financial industry and society at large.”