The Lab is featured in Forbes
The Finance Innovation Lab was featured in Forbes this month. Lab co-convener Rachel Sinha was interviewed by Rahim Kanani
Recently, I interviewed Rachel Sinha, Sustainability Manager in the think tank of the Institute of Chartered Accounts in England and Wales. In her role she co-leads social innovation and is one of four co-founders of The Finance Innovation Lab and one of five co-founders of UnLtd*Future, a programme of support for social entrepreneurs with sustainable and disruptive business models.
Rahim Kanani: Describe a little bit about how you began working in the field of social innovation.
Rachel Sinha: WWF-UK have been tracking the destruction of the planet in their Living Planet Report for years. Their sustainable consumption team started to ask questions about what was driving this destruction and it didn’t take long before they stumbled across the finance and the financial system as a whole. Separately our Sustainability think tank at ICAEW had been exploring how markets work to drive sustainable outcomes and looking at things like how to get companies to internalise their externalities (pay for the negative impact they create) with Pavan Sukhdev of The Economics of Ecosystems and Biodiversity project (TEEB).
In the wake of the financial crisis in 2008 our two organisations, perhaps unlikely bedfellows, found they were asking similar questions and suddenly had a lot in common. We kicked off the project with a big event at Chartered Accountants Hall in the heart of the city of London by asking the question ‘how can we create a financial system that sustains people and planet?’, inviting a whole range of stakeholders from our two organisations to help us explore an answer. We were overwhelmed by the response and had to turn people away.
Rahim Kanani: What is the Finance Innovation Lab?
Rachel Sinha: The Finance Innovation Lab is the largest social innovation project in Europe looking at finance. It is an open space where people can come together to explore, innovate and evolve the financial system so that it sustains people and planet. It is co-founded and run by ICAEW and WWF-UK, supported by social change practitioners Hara Practice Collaborative who work with us to develop the process as the project emerges.
We do three things; firstly we connect people who want to create a financial system that sustains people and planet. We believe that if we really want to change we have to tackle the financial system as a whole, which we are all either a part of or we are excluded from. Therefore we think it’s important to work with a diverse group of people. We think that if we put the same people in a room who created the existing system and ask them to innovate, we might not come out with very innovative solutions. So the Lab is a place where people from very different backgrounds can meet. The community consists of a hugely diverse group including social entrepreneurs, investment bankers and anti-capitalists, the NGO community and design students. All are equally welcome. We bring them together by hosting large scale Assemblies of over 150 people, on our online community of over 1500 people and at regular workshops and drinks in London. We also do lots of matchmaking, introducing people to others’ who are working on similar problems and don’t yet know each other.
Secondly, we prototype. We saw that post-crash there was a lot of finger pointing at the bankers, the auditors, our governance structures, our love of credit cards and living beyond our means. We also saw a huge opportunity, everyone had ideas about how the financial system could be improved, but the power to do something with those ideas seemed to be held by a few. We decided that the role of the Lab was to be a place not for analysis of the past, but for prototyping the future and a place to take those ideas and support and nurture them into solid projects. So at Lab events we crowd source ideas for a better system, people are invited to cluster around those ideas that inspire them and we turn them into projects, helping to find the funding and support needed to make them fly.
Thirdly, the Lab is a place to connect to purpose. What we’ve discovered over the two and a half years of running the Lab is that while lots of people have ideas, not everyone is willing to devote their time to actually doing something about them. Those who do seem to be driven by a cognitive dissonance- a sense that their values at home don’t match their role at work or a sense of injustice at how the system benefits some and not others. The Lab is therefore a place to do something about this dissonance. Part of the process is therefore encouraging participants to sit with this feeling and build their conviction and confidence to act on it at training retreats and capacity building workshops.
Rahim Kanani: What have been some of the recent milestones of the Lab’s work?
Rachel Sinha: We have 2,000 people in our community from around the world. Endorsers include Pavan Sukdhev (TEEB), Hazel Henderson (Ethical Markets) and Sir Mark Moody-Stuart (Board HSBC).
We now have around 8 innovations running. Half of these are innovations, started by individuals within our community, explore incremental changes within the existing financial system.
Those within the system include groups looking at the policy interventions we need to transition to a new green economy (sponsored by Calouste Gulbenkian Foundation), The TEEB for Business Coalition looking at how we can work together to get companies to internalise their externalities (UNEP, UNDP, WBCSD, WWF, IUCN etc.) and how we can map the financial system so it can be better understood by the general public (Central St Martins London). The other half are exploring radically new ideas. Things like why do we need to use banks at all? Looking at complementary currencies, peer to peer lending and new models of impact investing (with Cooperative Financial Services).
Rahim Kanani: Carve out the space of financial innovation as it stands today. Where are we now?
Rachel Sinha: Innovation in finance is everywhere but is driven by a new generation of people who are linking money with technology and sidestepping traditional banks. Projects and events like The Finance Innovation Lab SOCAP, barcampbank, OxfordJam and The Future of Money are spreading ideas around peer to peer lending (Kiva, Kickstarter, Zopa), the sharing economy (www.thepeoplewhoshare.com, Rachel Botsman) and complementary currencies (Arthur Brock, nef, TimeBank). These ideas tend not to come from established organisations but from extremely well networked entrepreneurs who share ideas on Twitter and on their blogs and who may well be building a new financial system while we’re struggling with the old one.
Innovation in the existing system is happening, led by mavericks who have spotted glaring problems and are brave enough to take them on. But it’s complexity and the vested interest within it, mean that change requires a lot of effort and happens slowly by building consensus.
Rahim Kanani: And where are we headed?
Rachel Sinha: We have now built the infrastructure of the Lab. Our process for change is in place. We are now looking at how we can share what we’ve learnt so far about innovation within the existing system, about how to build a social innovation project tackling systemic issues and how we can support new and existing innovation groups to have the biggest impact. We are also exploring whether there is a need and market for the Lab in the US and elsewhere.
Rahim Kanani is a writer, advocate, strategist and entrepreneur for global social change. His articles, opinions, and interviews with global leaders can be found at www.rahimkanani.com.