NATO 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 by governments and stakeholders with a pinch of salt – NATO. This state of incredulity also applied as far as Islamic sustainable finance is concerned. For years, it was NATO.
Until five years ago. Fast forward to 2022, the Islamic finance industry proved it is indeed putting money where its mouth is: it continues to chip away at this skepticism with meaningful actions.
In every meeting room, every Islamic finance conference, every industry dialogue, ESG and sustainability made an appearance, if not dominated the discussions. This is likely to continue.
What is heartening is that the industry is actually walking the talk: Islamic financial institutions, corporates and policymakers have concrete measures, products and initiatives to show for it. We see the Islamic sustainable finance mix include social and impact Sukuk, rather than being exclusively green-focused, and we see a stronger push for Islamic sustainable banking and insurance products, rather than it being mainly a capital markets play.
Make no mistake – the road ahead is long, and the room for improvement is large. But these signs are encouraging.
As these pages will tell you: the advocacy to better infuse ESG into Islamic finance to meet the SDGs is strong. Good work is being done, and will continue as we venture on this journey together.
The Islamic Sustainable Finance and Investment 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.
This report would not have materialized without the unwavering support of our partners:
• Accounting & Auditing Organization for Islamic Financial Institutions
• Al Waseelah
• Bursa Malaysia
• Cagamas (National Mortgage Corporation of Malaysia)
• Capital Markets Malaysia
• CIMB Islamic
• Climate Bonds Initiative
• DDCAP Group
• DLA Piper
• HSBC Amanah
• International Islamic Financial Market
• International Islamic Trade Finance Corporation
• Islamic Corporation for the Insurance of Investment and Export Credit
• Islamic Development Bank Group
• Islamic Financial Services Board
• Labuan International Business and Financial CentreBFC
• Malaysian Sustainable Finance Institute
• Old Mutual
• Prestige Funds
• Responsible Finance & Investment Foundation
• SME Bank
• United Nations Global Compact
• UOB Asset Management
If 2022 is any indication of the industry’s drive to embed sustainability into its Islamic finance DNA, then I am hopeful (and excited) for the things we will achieve in 2023.