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. To do so in an effective manner, financial services must find and share a guiding principle for financial services which is most beneficial when the best ideas are incorporated from various forms of responsible finance, including Islamic finance.
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 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.
The guiding principle that is shared among all forms of responsible finance is an appreciation that financial services can be a force, and indeed are necessary for sustainable development.
A major opportunity for the RFI is to expand responsible finance by incorporating the positive screening strengths of the SRI industry with the governance and regulatory advances of Islamic finance, and thereby engage asset owners and institutional investors who drive financial services development in a more coherent and unified approach.