Responsible Finance Institute highlights universal value proposition of Islamic finance for leading role in the broader responsible finance industry
Responsible finance has grown across the developed markets but its growth in emerging markets where Islamic finance is concentrated has lagged
Islamic finance can benefit from cooperation with other areas of responsible finance through greater integration of environmental, social and governance (ESG) into Islamic financing activities recognising their close fit with the principles of Shari’ah
The Responsible Finance Institute highlights the universal value proposition of Islamic finance and offers a unique way for Islamic financial institutions to provide leadership for the development of the global responsible finance industry
September 2, 2015 – London, United Kingdom – The Responsible Finance Institute (“RFI”), a non-profit organisation, sees potential for Islamic finance to lead convergence around responsible financial principles to make the financial sector support equitable, inclusive and sustainable economic development. A key aspect of its mission will be exploring opportunities for collaboration between responsible finance solely focused on ESG and an Islamic finance industry that recognises the key overlaps between the principles behind ESG and the principles which guide Islamic finance.
The announcement followed the Institute’s inaugural meeting of its Council of Advisors chaired by Dr. Zeti Akhtar Aziz and its Board of Trustees led by Chairperson Prof. Datuk Dr. Rifaat Abdel Karim that met in Edinburgh, UK on August 31st to finalise a work plan through to the end of 2016.
The RFI’s efforts will be led by its Chief Executive Officer Blake Goud who will lead the development of its research agenda to map the global scope for responsible finance and opportunities for convergence. The RFI plans to also become the reference point for creating awareness for how the universal value proposition of Islamic finance contributes to the development of responsible finance industry. The research agenda will include, among other activities, the creation of an indicator of the quantitative and qualitative development of responsible finance
In addition to the RFI’s research agenda, RFI will host insightful roundtables in key centers of responsible finance globally to engage different perspectives in discussion of key issues in the industry. These roundtables, will bring together professionals, academics and regulators of issues that will shape the future of the responsible finance industry. They will be supplemented with webinars to engage with additional stakeholders.
The RFI’s awareness activities will build towards a conference to be held in the second half of 2016. The RFI believes that to promote a balanced discussion of the responsible finance industry, it is vital to bring the ethical and socially responsible principles of Islamic finance into the conversation about supporting equitable, inclusive and sustainable economic development.
Tan Sri Dato’ Sri Dr. Zeti Akhtar Aziz, Chairperson of the RFI Council of Advisors said: “Since the financial crisis, there has been an increasing focus on the need for how financial institutions can incorporate ethical and responsible finance in their businesses across the industry. I am delighted to support RFI’s efforts towards greater convergence of the socially responsible and ethical principles of Islamic finance within the broader responsible finance industry”.
Professor Datuk Dr. Rifaat Rifaat Karim, Chairperson of the RFI’s Board of Trustees said: “The RFI will be the source for creating and disseminating research and that provides a robust, detailed and balanced perspective about responsible finance. Disseminating this research and stimulating robust discussion about how to support greater integration of ESG into Islamic financing activities as a way of moving Islamic finance closer towards the principles of Shari’ah”.
Blake Goud, the RFI’s CEO said: “One of the biggest missing pieces in responsible finance research today is the role that Islamic finance plays and what it can gain from engaging with the broader responsible finance community. Building awareness about the growth in areas like socially responsible investing (SRI) Suk?k and financial products that focus on financial inclusion of the global Muslim population is not fully recognised in the responsible finance sector.”
About the Responsible Finance Institute (RFI)
The RFI is being established to integrate principles and solutions of the responsible financial sectors, including the ethical and socially responsible principles of Islamic finance into the global economic system to support equitable, inclusive and sustainable economic development.
Its mission is to conduct research that explores the connections between the socially responsible, ESG and Islamic financial sectors, supports their convergence towards shared standards and engages stakeholders to build the responsible finance industry as a catalyst for economic development for the benefit of all.
The Responsible Finance Institute is being established and will operate with a global focus that also reflects the importance that emerging markets have in laying the foundations of Islamic finance as a unique part of responsible finance industry.
In addition to HE Governor Zeti and Professor Rifaat Ahmed Abdel Karim, the RFI Council of Advisors includes HRH Emir Muhammadu Sanusi II and Professor Simon Archer. The RFI Board of Trustees includes Professor Rifaat Ahmed Abdel Karim (Chairperson), Dr. Sayd Farook (Vice Chairperson), Ms. Sarah Marten (Vice Chairperson), Mr. Daud Vicary Abdullah, Mr. Abdulla Al Awar, Mr. Hasan Al-Jabri, Mr. Tirad Al-Mahmoud, Dr. Mohd. Daud Bakar, Mr. Sultan Choudhury, Ms. Stella Cox, Mr. Brandon Davies, Mr. Rafe Haneef, Professor Datuk Dr. Mohd Azmi Omar, Mr. Omar Selim and Mr. Mustafa Adil.
About Responsible 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 (ESG) screens 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 equitable, inclusive and sustainable development.
Copyright to Zawya 2015
To learn more about the Responsible Finance Institute, please contact:
Blake Goud, CEO
© Press Release 2015