The Islamic sustainable finance and investment sector is picking up speed. Notable progress unfolded in 2022 which bodes well for the industry. With specially curated exclusive content by market leaders in Shariah sustainable finance, the ISFI Annual Report canvasses the most significant developments of the year to provide nuanced insights and analyses.
Report's Content
EDITOR'S NOTE: Translating words into actionsNATO can be frustrating. And no, I’m not referring to the North Atlantic Treaty Organization; I’m talking about the acronym NATO used in some vernacular – ‘No Action, Talk Only’. As with any cynical journalist, it is not uncommon (in fact, it is expected of us) to view announcements as mere lip service and to take any commitments made...
Read MoreCOVER STORY: Islamic sustainable finance in 2022: Walking the talk For the best part of the last decade, Islamic sustainable finance, which mainly took the form of green Sukuk, was the talking point of the industry. But that was all it was – talk. Despite loud aspirations, Islamic ESG activities remained largely muted. But there have been signs in 2022 which perhaps indicated that we are at the cusp of a real, meaningful shift. The question is: have we turned the corner?
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ISFI MARKET SURVEY RESULTS: Islamic Sustainable Finance and Investment Survey 2022 results From August to October 2022, ISFI surveyed over 100 Islamic finance industry practitioners to understand how their respective organizations are adopting Islamic sustainable finance and investment. MARLENA KAREEM analyzes the results.
LEGAL SURVEY REPORT: Lack of standardization curbing Islamic sustainable finance growth in Malaysia and Indonesia, says legal community In August 2022, ISFI interviewed leading Islamic finance lawyers in Malaysia and Indonesia to gauge the state of Islamic sustainable finance in the region. LOUIS EDMONDES reports.
The dynamics, challenges and potential for Islamic green finance and Sukuk Oussama Kaissi, CEO of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), writes that the shift toward increasing investment and financing to support a sustainable and inclusive development agenda has progressed steadily over the last two decades. These are in line with achieving the targets set by the 2015 Paris Climate Agreement...
AAOIFI keeps pace with sustainable financing developments The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is the leading international standard-setting body primarily responsible for the development and issuance of standards for the global Islamic finance industry. The specific characteristics of the Islamic financial...
Sustainability and Islamic finance: Addressing regulatory and supervisory gaps Transitioning to sustainable development economies and mitigating climate change are major issues that are currently at the forefront of the global consciousness. DR BELLO LAWAL DANBATTA, the secretary-general of the Islamic Financial Services Board (IFSB), explores the role of regulatory and supervisory bodies in supporting financial...
Islamic sustainable finance has an opportunity to focus on the ‘real economy’ dimension of climate-related financial risks With climate talks and the G20 both being hosted in Islamic markets this year, Islamic sustainable finance has a unique opportunity to extend the connection of Islamic finance as an integral part of the broader responsible finance market. Indonesia hosted the G20 and Egypt hosted COP27...
Advancing climate finance in Malaysia: 2022 in review In September 2022, Malaysia’s National Energy Policy 2022–2040 was launched reflecting the role of energy as a significant contributor to enable other key economic sectors to thrive. Embedded within this policy is the country’s Low Carbon Nation Aspiration 2040 which seeks to achieve, among others, the following by 2040....
Weighing up the conundrums of war and geopolitics through an ethical investment lens With the world already undergoing critical changes off the back of the COVID-19 pandemic, Russia’s invasion of Ukraine and the subsequent war in the country have set off a chain of events as many countries jostle for position in a power play...
Fintechs in an ESG-focused world DDCAP Group (DDCAP), an industry-leading market intermediary and financial system solutions provider, connects the global Islamic marketplace responsibly via its proprietary system, ETHOS Asset Facilitation Platform (ETHOS AFP). DDCAP aspires to be a best-in-class responsible and sustainable fintech and supports awareness...
Investors bet on alternatives and impact-focused opportunities as the world moves to sustainability and energy freedom Bad news for markets is good news for alternative investments. A volatile stock market, four-decade high inflation, raising interest rates and geopolitical tensions this year have stunted the global market and contributed toward a dramatically changing role of alternative investments. Investors relying on the traditional game...
The Prestige Premium Alziraea Fund: Shariah compliant project finance in green energy Prestige Funds is a specialist direct lending fund manager which leverages the expertise of our lending partners in the UK. For over 15 years now we have provided investors with a means to access the dynamic economics of the SME sector in the UK, including the growing clean...
A new approach to ASEAN ESG investing With the advent of the COVID-19 pandemic, ESG investing has taken a front seat in investors’ minds. Similarly, Islamic investors, seeing the benefits and similarities of ESG with Islamic investing, have embarked on a journey to imbed ESG into their Shariah portfolios. However, similar challenges that bewildered the Islamic sector...
HSBC Amanah: Embedding sustainability The global move to incorporate ESG characteristics and principles into the decisions made by businesses represents a necessary and significant change for the long-term sustainability of our world. At HSBC, we are committed to building a business for the long term, developing relationships that last. We want to be a well-managed organization that people are proud to work for, has the trust of our clients...
Labuan IBFC – Asia’s premier international financial hub Islamic banking is one of the fastest-growing segments in the world financial system due to large investments in the Halal, infrastructure and Sukuk sectors. Globally, Islamic finance is forecast to be worth more than US$3 trillion by 2023. The industry can generally be categorized into five subsectors...
Cagamas doubles down on sustainability agenda; working on framework to scale up green housing Malaysia’s second-largest issuer of corporate debt, Cagamas, intends to devise a framework to serve as guidance for property ecosystem stakeholders to boost the domestic green housing sector.
Greenwashing concerns here to stay, says IdealRatings ESG ratings play a critical role in sustainable finance and investment. To learn about the role of sustainability ratings in the Islamic sustainable finance and investment space, ISFI spoke to Magdy Eissa, the vice-president of IdealRatings, a data screening and ratings provider with a focus on sustainability and Islamic...
Sustainable Islamic interbank market transactions likely to grow, says CIMB Islamic CIMB Islamic Bank recently entered into a RM1 billion (US$224.74 million) sustainable collateralized commodity Murabahah (CCM) transaction with Standard Chartered Saadiq Malaysia. On the back of this landmark deal, ISFI spoke to Ahmad Shahriman Mohd Shariff, CEO of CIMB Islamic, to understand its structure...
SME Bank SME Bank is fully committed to driving Malaysia’s economic growth by providing financial assistance and playing the developmental role of SMEs through providing professional advisory services and capacity-building programs. SME Bank aims to nurture the advancement of SMEs
Al Rajhi Bank’s dual tranche sustainability commodity Murabahah facility Al Rajhi Bank concluded its US$1.16 billion three-year dual-tranche sustainability commodity Murabahah facility on the 20th September 2022. The deal was participated by 13 global investors from North America, Europe, Asia and the Middle East.
Ekovar’s waste management green Sukuk Ankara-based Ekovar Cevre Grup Geri Donusum Atik Depolama Insaat Taahhut Sanayi Ve Ticaret has issued a TRY50 million (US$2.7 million) green Sukuk facility on the 14th September 2022. The proceeds from the issuance, arranged by Emlak Participation Bank, will be channeled to waste...
Malaysia’s first sustainability ringgit Sukuk The Malaysian government has issued its first ringgit-denominated sustainability Sukuk worth RM4.5 billion (US$968.5 million) on the 30th September 2022. The proceeds from the 15.5-year Sukuk facility will be utilized to finance or refinance eligible social and green projects as defined in the
Indonesia issues largest-ever global green Sukuk tranche The Republic of Indonesia has issued its largest green Sukuk tranche to date worth US$1.5 billion on the 24th May 2022. The 10-year green tranche was issued as part of a dual-tranched US$3.25 billion issuance which included a US$1.75 billion five-year tranche. The total issuance is the