In its first Global Financial Innovation Network (GFIN) Greenwashing TechSprint Showcase, the Financial Conduct Authority (FCA) brought together 13 firms and 15 international regulators and organisations to collaborate using its digital sandbox with a focus on ESG as collective priority.
During the TechSprint showcase day, on 20 September 2023, participating firms and regulators showcased their potential solutions that could help tackle the risk of greenwashing in financial services to a panel of independent judges made up of industry experts, professionals and innovators.
The FCA’s chief data, information and intelligence officer, Jessica Rusu, said: “Both the FCA as a regulator and the GFIN network want to ensure that customers have access to genuinely sustainable financial products that meet their needs or preferences.”
Rusu added that the TechSprint is the “first of its kind” and she was “very excited” at the use of social media data, web-scraping techniques, and artificial intelligence methods that have been leveraged by the teams.
The solution, the FCA said, supports IOSCO’s ambition to build trust through high standards of behaviours and calling out greenwashing.
Problem solving
The participants took on one of two problems presented by the FCA centred around greenwashing in financial services and build a solution in response to these challenges:
Problem 1: How can technology, including AI and Machine Learning, enable regulators and supervisors to verify that ESG-related product claims to retail consumers are accurate and complete?
Problem 2: How can technology help monitor, collate and identify examples of greenwashing from financial services firms’ websites, social media platforms and other documentation or data which can also be shared across jurisdictions?
The judges determined the winners based on four criteria: the fast solution, the eureka solution, the jump solution and the globe trotter.
Key contributor
The FCA said the firm Insig.AI was a key contributor in the TechSprint and provided its datasets of machine-readable corporate disclosures and text interrogation tools for use on the digital sandbox.
The participating firms and regulators will retain their access to the wider community and datasets on the sandbox to continue iterating and collaborating on their solutions.
Wider work
The regulator added that TechSprint formed a part of its wider work to improve trust and transparency in the ESG market by improving the sustainability information consumers have access to.
Last year the FCA consulted on a package of measures to tackle greenwashing and build confidence, helping customers navigate the market and make better informed decisions. A policy statement in response to that consultation is expected later this year.
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