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Responsible Finance Initiative

Rethinking finance and the financial services industry to create more meaningful outcomes for developing economies.

Overview

Finance is a powerful lever.  Where the interests of the private sector, the public sector and the commons remain unintegrated – it can foster unintentional and untenable inequality. When those interests are understood and aligned, finance and investments can provide a catalyst for economic growth. When we can measure the economic value of integrating finance with social impact, we not only stimulate growth, but we address the issues of inequality and transformation head-on. This is where the Responsible Finance Initiative (RFI) sees itself as playing a critical role.  Its mission is to empower economic agents to effectively allocate and mobilise capital to meet the development and economic growth imperatives of African nations and regions, as set out by their commitments to the UN Sustainable Development Goals.

Purpose
The Responsible Finance Initiative aims to create more optimal Africa-specific solutions, including:
  • Collaborative forums with both global and local organisations involved in setting appropriate principles for measurement and monitoring impact by corporate business strategies, investment programmes, social and civic programmes and national initiatives.
  • Collaborative forums between industry players and their beneficiaries on how to create financial products and services that directly meet the needs of South Africans and Africans.
  • Research that provides more informed linkages between developmental imperatives, investment activities, capital market formation and regulatory incentives.
  • The development of practical, replicable, and implementable solutions for measuring and reporting impact with developmental, economic, and investment focus.
  • The creation of an asset allocation framework for investors looking to deploy capital along a risk-return-impact frontier, and ultimately provide solutions to fill funding gaps.
  • The creation of a collaborative Thought Leadership Platform that will allow all stakeholders to keep abreast of and contribute to the latest thinking as to how best to meet these developmental needs.
 
Why Responsible Finance?
Why ‘responsible finance’ and not just ‘sustainable finance’ or ‘sustainable investment’?  As the sociologist/economist Ken Hou-Lin argues, “To understand contemporary finance is to understand contemporary inequality.”  ‘Sustainable’ finance suggests we are only considering environmental, social and governance issues in our assessments of risk and value.  ‘Responsible’ finance takes us one step further – it looks for answers as to how best to lever finance for that ‘better world’ and interrogate how the value chain works together effectively.  A focus on finance allows us to interrogate the broader activities of commerce, government, and development agencies in managing debt, credit, and money flows, in addition to investments. This will be critical to stimulating outcomes that can do more than meet minimum development targets for an economy.
 
RFI projects and activities:
Maintain a range of working forums focused on:
  • The UN’s World Benchmarking Alliance project on Financial System Transformation;
  • Consolidation of reporting, accounting, data integration, benchmarking requirements for a new business model that will be more relevant to achieving African developmental outcomes;
  • Translation of national or regional development metrics into more meaningful metrics for corporates in cooperation with the UN Global Compact;
  • Developing a dialogue between the ‘man/woman on the street’ and the CFA Society, the Financial Planning Institute, the Association of Black Securities and Investment Professionals and the South African Finance Association on creating products and services that best address the needs for South Africans and Africans re social mobility and social protections.
  • Determining the ambit of each group’s responsibility in the financial ecosystem. The challenge will be to find the right balance between creating an environment that welcomes the timeous deployment of funding by those in a position to ensure that stakeholders don’t ultimately abdicate responsibility for ultimately developing that capacity.
 
Research Projects:
  • Map the components of the financial, economic and social ecosystems that best support the SDG ambitions.
  • Assess the role of finance in either enhancing or mitigating income and wealth inequality in Sub-Saharan Africa.
  • Design an analytics framework that integrates risk-return-impact metrics against SDG imperatives and ESG.
  • Align reporting requirements for corporates or other listed entities with reporting requirements for the local SDG impact requirements as a collaborative exercise between companies or enterprise, accounting and integrated reporting standard setters, the capital market platforms and potential investors.
  • Measure the impact of employee benefits in filling the gaps for achieving SDG’s. Most notable will be trying to capture a measure of the multiplier value-add these initiatives have the potential to deliver.
 
Product development
  • The development of practical, replicable, and implementable solutions for measuring and reporting impact with developmental, economic, and investment focus.
  • The creation of an asset allocation framework for investors looking to deploy capital along a risk-return-impact frontier, and ultimately provide solutions to fill funding gaps.
  • A Thought Leadership platform that integrates the body of knowledge, research.,insights, dialogues, data, models, and tools – all supported by machine learning algorithms
  • A database of relevant data/metrics to empirically support the various research initiatives undertaken by the RFI
Training programmes
  • These will be introduced as and when the previous activities begin to bear fruit.

Contact Us
Anne Cabot-Alletzhauser 
Co-Founder and Practice Director
cabota@gibs.co.za     
Deslin Naidoo, CFA
Co-Founder and Practice Director
naidoode@gibs.co.za


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