Many powerful quotes emerged from COP26 (2021 United Nations Climate Change Conference), which I found to have resonated with the Islamic sustainable finance movement, which extends well beyond climate change. Prince Charles aptly expressed: “Quite literally, it is the last-chance saloon. We must now translate fine words into still finer actions.”
This call-to-action perfectly applies to the Islamic finance industry as well which, despite its much-touted synergy with sustainable finance, has been slow to fully embrace environmental, social and governance structures: the first green Sukuk facility was issued 10 years after the first green bond hit the market. During the last decade, impact investments grew exponentially to exceed the trillion-dollar mark, while the Islamic finance industry is still playing catch-up with only a fraction of assets under management marked as sustainability-linked.
It is, however, easy, and dangerous, to dwell on what we lack, for we risk inaction from being stuck in a state of flux. But as the industry’s strongest proponents of Islamic sustainable finance have expounded in great detail in this IFN Islamic Sustainable Investing Thought Leadership Report, many industry leaders are proactively advocating for Islamic sustainable finance and more importantly, turning their words into actions as they introduce new products, new frameworks and new initiatives to shift toward purposeful finance. The IFN Islamic Sustainable Investing Thought Leadership Report is an industry-driven initiative to contribute to the industry knowledge body with specially curated exclusive content by market leaders in Shariah sustainable finance, as we venture on this journey together.
The IFN Islamic Sustainable Investing Thought Leadership Report would not have been possible without the support and guidance from the following agencies, which continue to be a formidable force in championing sustainable finance:
• Accounting and Auditing Organization for Islamic Financial Institutions
• Cambridge Institute for Sustainability Leadership
• Climate Bonds Initiative
• Climate Governance Malaysia
• International Islamic Financial Market
• Islamic Development Bank Group
• Islamic Financial Services Board
• Responsible Finance & Investment Foundation
• ShareAction
• United Nations Principles for Responsible Investment
We’d also like to thank our partners for their contributions to this seminal report: it is hoped that their experience and perspectives would provide the global Islamic finance industry with insights to carve its own path toward sustainability. Our gratitude goes to:
• Bedford Row Capital
• Bursa Malaysia
• Cagamas
• CIMB Islamic Bank
• DDCAP Group
• Fitch Ratings
• IBF Net Group
• Kenanga Investment Bank
• Luxembourg for Finance
• Nomura Asset Management
• Norton Rose Fulbright
• Prestige Asset Management
• S&P Dow Jones Indices
• Standard Chartered Bank
Over the last year or so, we have seen a greater mobilization of efforts by industry stakeholders as they come together toward a common cause — which gives us hope that the industry is indeed moving in the right direction to truly embed sustainability into our DNA. It is high time all stakeholders of the Islamic finance industry get our act together, and combine our resources and expertise to make Islamic finance a greater force for good.
In the words of renowned broadcaster and activist David Attenborough at COP26: “We are, after all, the greatest problem solvers to have ever existed on Earth. If working apart, we are a force powerful enough to destabilize our planet; surely working together, we are powerful enough to save it.”
Vineeta Tan,
Managing Editor, IFN
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