Sharia compliance on sustainable investment (ESG) and green sukuk

Abstract

Global sustainability challenges promote the incorporation of Environmental, Social, and Governance (ESG) concepts in investment practices. Nonetheless, a complete framework ensuring sharia compliance for ESG and green sukuk investments is absent, resulting in a deficiency in the sharia financial literature. This study seeks to examine the intersections and possible synergies between sharia principles and ESG criteria while also assessing the sharia compliance of Green Sukuk as a sustainable finance mechanism. The invention consists of a conceptual model that amalgamates sharia maqasid with the ESG pillar, guaranteeing that investments are not only halal but also thayyib and yield a good impact. The findings discussion delineates the profound alignment, screening obstacles, and advantages of Green Sukuk in mobilising Sharia financing for sustainable development. In conclusion, significant potential exists for harmonisation, accompanied by proposals for standardisation and education to enhance the role of Islamic finance in the global sustainability agenda