The Responsible Finance & Investment Foundation (RFI) recently announced that it is working with a group to develop a blockchain-based tool for tracking businesses' commitments to sustainability, according to an October 17 report from Reuters. The tool is intended to identify the sustainable practices that companies in the financial industry have "translated into action." The report noted that this information would help "guide new entrants into the field" of responsible finance.
The tool would also help to curtail "greenwashing," or the practice of companies claiming to be more eco-friendly or ethical than they are. The problem is only exacerbated by the lack of standards for green financial products, as well as by the opacity of businesses' sustainability commitments.
With the tracking tool, however, commitments and actions made by companies would be identified on a blockchain, although it is not clear how much data would be recorded or whether the network would be permissioned or permissionless. Regardless, the information would ultimately enable stakeholders to see "which [sustainable] practices are taking root" in the finance industry.
CEO of the RFI, Blake Goud, said that "the platform is designed to be revenue-generating as a social enterprise, funded by users in a way that will keep the data open and accessible as a public good."
Although the RFI is one of 24 entities working on the platform, two other notable members of the group include the European Partners for the Environment in Brussels and Minneapolis, Minnesota-based Magni Global Asset Management.