A multi-country initiative to develop a digital tool to mitigate greenwashing risks has been launched by the Global Financial Innovation Network.

GFIN says the objective of the greenwashing techsprint is to “protect consumers and promote a fair and reliable portfolio of sustainable financial services”. There are currently 13 regulators from across the globe taking part in the project, including the World Bank, the UK’s FCA, the Reserve Bank of India and India’s IFSCA, the Dubai Financial Services Authority, the national bank of Ukraine and the Taiwan Financial Services Authority.

The techsprint will address two problem statements.

• How can technology, including AI and machine learning, enable regulators/supervisors to verify that ESG/sustainability-related product claims to retail consumers are accurate and complete?
• How can technology help to monitor, collate and identify examples of greenwashing from financial services firms’ websites, social media platforms and other documentation of data which can also be shared across jurisdictions?

The techsprint will be an open event hosted on the FCA’s digital sandbox. The UK regulator is the current chair of the co-ordination group of GFIN, which has over 80 international organisations in membership.

Ensure trust

The FCA said: “The number of investment products marketed as ‘green’ or making wider sustainability claims is growing. Exaggerated, misleading or unsubstantiated claims about Environmental Social and Governance (ESG) credentials damage confidence in these products and the FCA wants to ensure that consumers and firms can trust that products have the sustainability characteristics they claim to have.”

The application process for UK firms wishing to take part opens on April 17. The window will remain open until May 21, with successful applicants invited to take part in sandbox training and a briefing on the techsprint process on June 1 and 2. GFIN stresses that participates must be prepared to be collaborative and to share knowledge.

Launch is planned for June 5, with a showcase scheduled for September 13 and 14.