After the financial crisis, it was apparent that the link between risk and reward had been broken and needed to be rebuilt with ethics and morals at its heart. The financial crisis illustrated in stark fashion that ethics and business are not adversaries and that ultimately they need each other.
It is within this context that ‘responsible’ finance practices can play a powerful role in shaping the future of the global economy. There are various definitions and practices encapsulating the ‘responsible’ finance sector. These include sustainable, responsible and impact investing (SRI), environmental, social and governance (ESG) and Islamic finance, which is a form of financial intermediation in which funds are raised and applied using asset-based methods or partnerships in accordance with Islamic law instead of lending and borrowing. Yet, the guiding principle that is shared among all of them is an appreciation that financial services can be a force, and indeed are necessary for sustainable development.
To do so in an effective manner, financial services must find and share the best ideas from many forms of responsible finance, including Islamic finance.
The RFI Foundation - the industry body for the responsible finance sector.
The RFI Foundation has been established with the aim of bringing together various forms of responsible finance practices, encouraging consensus as the basis for convergence between standards, practices and regulations. A major opportunity for the RFI is to expand the responsible finance sector by including the ethical and socially responsible principles of Islamic finance and engaging asset owners and institutional investors who drive the financial services sector.