Second Islamic Finance & SDG Taskforce meeting takes place
The second Islamic Finance and the UN Sustainable Development Goals (SDGs) Taskforce meeting has taken place virtually bringing together over 50 global Islamic finance leaders. At the meeting, convened by the State Bank of Pakistan (SBP) in partnership with the UK Islamic Finance Council (UKIFC), the SBP announced the launch of a country level working group bringing the leading banks across Pakistan to focus on green finance and the SDGs. Two further working groups, to be driven by Taskforce members, focused on Disclosure and Reporting and Education and Awareness were also announced.
The Taskforce is playing a leading role to encourage the adoption of the SDGs, highlight the green finance opportunity and promote the UN Principles of Responsible Banking within the global Islamic finance sector. This represents a $2.5 trillion global investment opportunity as part of the post-Covid-19 economic recovery. The Islamic Development Bank suggest that between $700m and $1trillion of this is within its member countries presenting an immediate opportunity for Islamic finance institutions.
State Bank of Pakistan Governor, His Excellency Dr. Reza Baqir, announced the launch of a Pakistan country working group that will:
“Explore the inherent strength of Islamic finance to develop a responsible business framework by engaging academia, policy makers and practitioners towards achieving SDGs.”
Leading the Awareness group UKIFC Advisory Board Member and meeting chair, Richard de Belder commented:
“Having identified a knowledge gap this working group will focus on activities that increase awareness, promote understanding and encourage adoption of the SDGs amongst the global Islamic financial and their related primary stakeholders.”
Leading the Disclosure and Reporting working group Gatehouse Bank CEO Charles Haresnape added:
“This working group is a unique opportunity to bring the Islamic banks signed up to the UN Principles of Responsible Banking together to share experiences with a view to developing a more consistent approach to disclosure and report.”
Despite a natural alignment few Islamic financial institutions are engaged with the SDGs. As we enter the decade of delivery the Taskforce has become an important platform to raise awareness of the Global Goals and catalyse practical action amongst Islamic financial institutions.
The meeting, also heard from Dr Hayat Sindi, Senior Advisor to the President, Islamic Development Bank, who spoke about how Islamic financial institutions are demonstrating resilience as world events continue to reshape the landscape of global financial services; how IFI’s can prepare themselves for the opportunities and challenges posed by such a changing economy; and especially with regards to investing in science and innovation so poorer countries can provide an adequate response to the Fourth Industrial Revolution.
NOTES FOR EDITORS
About The Taskforce:
With assets expected to reach US $3.8 trillion in 2022, Islamic finance is one of the fastest growing sectors in the global financial industry. Achieving the 17 Sustainable Development Goals (SDGs) agreed in the UN’s 2030 Agenda for Sustainable Development will take over US$5 trillion per year investment with the current financing gap standing at around $2.5 trillion per year.
The purpose of the taskforce is to explore the role the Islamic finance industry can play in addressing this funding gap and to better understand the commercial opportunities the SDGs present for the sector.
The UN’s SDGs are the blueprint to achieving a better and more sustainable future for all, addressing issues such as climate change, education and equality. Achieving the SDGs requires a coordinated global effort with Governments and private sector, including the financial services sector as a whole. Analysis indicates there is limited engagement by the global Islamic finance sector and this focused taskforce has been established by the UKIFC.
UKIFC announces support of 'Faith In SDGs' and the Path to COP26 campaign
UKIFC is a signatory of the Global Ethical Finance Initiative's Path to COP26 campaign, and is collaborating on the #FaithInSDGs workstream, which forms a part of the campaign. Ahead of the crucial 2021 Glasgow climate summit, the two organisations are seeking to coordinate faith groups, who have the power to invest in transformative change through their holdings.
UKIFC Partnership with Alliance of Religions and Conservation (ARC) Discussed on the BBC
Omar Shaikh (UKIFC) and Martin Palmer (Alliance of Religions and Conservation (ARC)) appeared on BBC Radio Scotland's Sunday Morning with Ricky Ross to discuss a new and innovative partnership between the organisations which aims to promote a major shift in international ethical finance. ARC, UK-based international NGO linking religions with environment initiatives, was founded in 1996 by HRH The Prince Philip and current Secretary General Martin Palmer.
The agreement came after a delegation from ARC spent two days in Edinburgh, attending the UKIFC’s 15th Ethical Finance Round Table as well as meeting with representations of the Ethical Finance Hub, Scottish Government, Church of Scotland and others to discuss the possibility of a new faith-consistent investment unit being based out of the Hub in Edinburgh.
ARC has been working with the United Nations Development Programme (UNDP), Organisation for Economic Cooperation and Development (OECD) and faith groups from across the globe to explore the development an international faith-consistent investment alliance which seeks to address the challenges and opportunities posed by the SDGs. The UN recognises that traditional aid channels and funds are not sufficient or sustainable sources of finance to deliver the SDGs. The potential of the faiths, however, is significant.
Every religion has values and teachings that accord (in different ways) with at least some of the visions expressed in the SDGs. Faith investments (pensions, endowments and other portfolios) represent at least 12% of the total global capital market an estimated further 30% owned by people who are active followers of the major religions. Until recently, whilst some faith groups had negative screening policies (eg not investing in armaments or tobacco), almost none had proactive / positive investment policies (of what they would actively invest in to support a better future world in the future eg sustainable energy).
The UKIFC will join ARC’s steering group meeting at the UN office in New York on March 26 2018. The aim of the meeting is to discuss the purpose and structure of the proposed faith-consistent investment alliance and whether and how it might operate from three global centres, which might include the Edinburgh Ethical Finance Hub and possibly a centre in Zug, Switzerland.
ARC will also work with the UKIFC and the Church of Scotland to support the development of shared values framework, to be launched in autumn 2018, by bringing in other faith groups to ensure the values are widely ratified.
'How Ethical is Islamic Finance' Thematic Workshop a huge success!
We are pleased to announce that our Thematic Workshop with the International Shari’ah Research Academy for Islamic Finance (ISRA) in association with K&L Gates had a great turnout and was a huge success. There was a lot of passion, energy, provocation and engagement with the topics. More details about the thematic workshop will be published soon.
'How Ethical is Islamic Finance' Thematic Workshop set for February 2018
Following the success of the October 2016 event on Shari’a Governance, the Islamic Finance Council UK (UKIFC) and the International Shari’ah Research Academy for Islamic Finance (ISRA) in association with K&L Gates are delighted to provide details of our next Thematic Workshop on 21st February 2018, which will focus on the topic of the relationship between Islamic finance and ethical finance. The workshop, sponsored by DDCAP, the Bahrain EDB and Gatehouse Bank, will convene at 09:30am at K&L Gates One New Change London EC4M 9AF.
The trend of positioning Islamic finance within the broader umbrella of ethical finance has gained momentum in recent years. Following Shari’a principles, it is argued Islamic finance is seen to be intrinsically interwoven with ethical finance values and strategies.
However, this view is not shared across the whole of the financial services industry. Critics of Islamic finance would challenge the notion of Islamic finance being ethical by questioning the creation of synthetic products to overcome textual restrictions with the result that the economic outcome and risk sharing profile is identical or very similar to that of conventional banks.
This conference will review and reflect on a number of key areas to explore the question of “How Ethical is Islamic Finance?”
Speakers include:
- Lord Sheikh, Co-Chair, All-Party Parliamentary Group on Islamic Finance
- Ajmal Bhatty, Board Member UKIFC and CEO, Qatar General Insurance and ReInsurance Co
- Dr Akram Laldin, Executive Director, ISRA
- Alastair King, Chairman, Naisbitt King Asset Management and Alderman of Queenhithe Ward, City of London
- Dr. Ashraf bin Md. Hashim, Senior Researcher / CEO, ISRA Consultancy
- Barry Cosgrave, Islamic Finance Partner, K&L Gates
- Charles Haresnape, CEO, Gatehouse Bank
- Professor Dr. Engku Rabiah Adawiah, International Islamic University Malaysia Institute of Islamic Banking and Finance
- Graham Burnside, Chairman, UKIFC
- Harris Irfan, CEO, Cordoba Capital
- Jonathan Lawrence, Islamic Finance Partner, K&L Gates
- Justin Sykes, Managing Director, Innovest Advisory
- En. Kamarul Ariffin Bin Mohd Jamil, Group CEO, Affin Bank Malaysia
- Martina Macpherson, Partner, Sustineri
- Professor Mehmet Asutay, Director, Durham Centre for Islamic Economics and Finance
- Professor Mohamed Iqbal Asaria CBE, Visiting Lecturer, Cass Business School
- Mushtak Parker, Editor, Economist & Independent Non-Executive Director, CIMB Principal Islamic Asset Management (Ireland) Ltd
- Nyra Mahmood, Managing Director, Simply Sharia Human Capital
- Omar Shaikh, Advisory Board Member, UK Islamic Finance Council
- Peter Lovell MBE, Chief Executive Officer, Financing Sharia Enterprise
- Petr Klimes, Group Marketing Director & Head of Digital, Abu Dhabi Islamic Bank
- Shaykh Essam Ishaq, Shariah Scholar
- Shaykh Ruzwan Mohammed, Co-Founder Solas Foundation and Educational Director, iSyllabus Islamic Studies Program
- Sheikh Badr Al-Hasan, Partner, Dome Advisory and Chairman, InsureHalal.com
- Shelina Janmohamed, Vice President, Ogilvy Noor
- Simon Walker, Head of Retail Sales, Al Rayan Bank
- Stella Cox, Managing Director, DDCAP
- Stuart Hutton, Chief Investment Officer, Simply Ethical
- Tarek El Diwany, Director, Kreatoc Zest
The event will cover several key themes including:
- The Shari’a Scholar Debate - Is Islamic finance following the spirit of the law or just the letter?
- Is Islamic Finance an ethical alternative - what social impact has it made in the past 20 years?
- With $40trn in SRI funds under management, is the Islamic Finance sector branded optimally?
- By focusing on the banking model, has Islamic Finance restricted its ability to provide more ethical and socially responsible solutions?
- Malaysia and UK innovation case studies – value-based intermediation and interfaith shared values framework
To view detailed agenda of the themes for the day click here.
Click here to view highlights from our 2016 event “Is the Current Model of Shari’ah Governance Fit for Purpose?
THIS EVENT IS NOW OVERSUBSCRIBED. IF YOU WOULD LIKE TO BE ADDED TO OUR WAITING LIST PLEASE EMAIL EVENTSLO@KLGATES.COM.
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UKIFC facilitates inaugural APPG meeting
The UKIFC facilitated the inaugural All-Party Parliamentary Group on Islamic finance meeting on Monday 20th November.
The meeting was hosted and chaired by Lord Sheikh, Baron of Cornhill and co-chaired by Baroness Uddin. The meeting was dutifully attended by key stakeholders from the Islamic finance sector, including practitioners, experts, academics, financial institutions, law firms and Shariah scholars. Amongst others were representatives from the UK Department for International Development (DfID).
The meeting raised a number of discussion points, and it was fascinating to hear from tenured industry leaders about the challenges that they face. Lord Sheikh was keen to capture the issues and proposed solutions, then raise them with the appropriate government departments to see how the issues can be best addressed.
UKIFC's Ethical Finance Round Table explores the role financial institutions can play in meeting UN SDG's
The 14th Edinburgh Ethical Finance Round Table took place on Monday 13th November 2017 for the first time in the offices of Baillie Gifford, who will be hosting the series for the next 2 years. The topic for the meeting was the UN Sustainable Development Goals and the role the financial sector can play in making them a reality.
The first presentation was given by Fran van Dijk, one of the founding partners of One Stone Advisors, who are leading consultants in the field of sustainability, operating principally in the UK, Scandinavia and the Netherlands. Fran reported that the UN Sustainable Development Goals (SDGs) have increasingly become a focus area for their clients in recent times, both seeking to map their own strategy against the SDGs and, in some cases, going beyond that to seek to link and adapt their strategies to make a positive contribution to meeting the goals.
A major challenge in achieving the SDGs by their target date of 2030 will be finance, much of which will have to come from the private sector. However that will bring many opportunities too both in generating revenue from change (estimated at a possible $12 trillion) and in creating jobs (estimated at a possible 380 million). Fran then gave a number of examples of businesses which together or in partnership were actively contributing to progress – these included Triodos Bank, BNP Paribas, which was developing the "Solactive" index, and the World Benchmarking Alliance lead by Aviva, which was seeking to develop a comprehensive SDG benchmark over the next 3 years.
The second presentation was given by Lee Qian of Baillie Gifford, introducing their "Positive Change Fund" in which he played a leading role. The strategy of the Fund is to invest solely in companies making a positive contribution to social or environmental challenge, while continuing to deliver attractive returns. The Fund had only recently been launched and currently stood at a level of £12 million but it was hoped in time this could reach a value of up to $10 billion.
The view underlying the investment strategy was that companies in this category will prosper in the long-term, so this is very much a "patient capital" approach. The management of the Fund operates by way of intensive internal analysis, focusing on the intention, business practices and product impact of the companies in question. The SDGs form a useful framework for measuring the last of these aspects and also provide a means of communicating and reporting on the impact achieved to investors.
The discussion was then opened to the floor.
One question which was raised was whether there was a danger of the SDGs becoming merely a "box ticking" exercise or whether they were actually stimulating new investment. In response, Fran van Dijk agreed that it was essential that the impact of investment should be closely assessed against the SDGs – in her view the forthcoming Aviva benchmark should help in this.
It was noted that as yet the UK was one of the countries which had not yet formulated its policy in relation to SDGs and it appeared that the government was seeking contributors to put together chapters on each of the individual Goals. It was suggested therefore that it might be a suitable project for the EFRT to collaborate on one of the chapters in question.
There was some comment that for certain sectors the SDGs may appear to be framed in too general and high level way. Nevertheless the view of the presenters was that they could still form a very useful starting point for any company's strategy.
The Purpose of Wealth - Community Awareness Day in Glasgow
The Islamic Finance Council UK is pleased to bring to you this community awareness day, supported by Al Rayan Bank, National Zakat Foundation and Islamic Relief, on the critically important theme of 'wealth'.
The events will focus on two topics:
- Understanding Islamic mortgages; and
- How to calculate zakat
The events will feature stalls, interactive workshops and presentations by Al Rayan Bank, National Zakat Foundation, Islamic Relief as well as discussions and short lectures by leading scholars. The event is free, open to all and light refreshments will be available.
TO REGISTER FOR THE EDINBURGH EVENT, PLEASE CLICK HERE.
For more information, please contact: info@ukifc.com
UKIFC features in The Global Business Magazine
The UKIFC features prominently in the most recent edition of The Global Business Magazine following a successful Global Ethical Finance Forum 2017 in Edinburgh.
Please click here to read the article.
For more information on the Global Business Magazine & News please click here.
The 2nd Global Ethical Finance Forum a huge success!
Day One: Reflecting on the aftermath of the global financial crisis and highlighting the need of establishing a sustainable financial system, Keith Brown MSP, Cabinet Secretary for the Economy, Jobs & Fair Work, Scottish Government, said, “In the ten years following the global financial crisis there has been something of a re-alignment in attitudes among bankers and investment managers and among customers and shareholders. [...] Interest in establishing an alternative, sustainable, responsible and ethical financial system continues to grow as does interest in developing a more long-term and responsible form of economic development.”
Credit: Ian Jacobs
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Speaking on behalf of the UKIFC and explaining how Scotland poses as a fitting backdrop to host the narrative due to its strong heritage in ethical finance, Omar Shaikh, Advisory Board Member said, “Globally the city is a leading financial hub and within this, Edinburgh is a key location for asset management and banking. With Scotland’s proud heritage in prudent finance through the mutual life companies, origins of the savings bank movement, I believe that Scotland presents a natural place to convene and host this international dialogue which is pertinent now more than ever.”
Stressing on the massive opportunity that lies for mainstreaming ethical finance, Lord Sheikh, The Baron Sheikh of Cornhill and Patron of the UKIFC, said, “A fundamental part of the UK’s economic success strength stems from bilateral trade. This will be more important than ever before as we embark on a new era for our country post-Brexit. In particular, I believe that we must now seek greater economic and trade ties with our friends from across the globe and forge new trading agreements. In this context, the APPG believes that Islamic and ethical finance can offer a gateway to building new relationships and accessing new markets.”
Day Two: In an exemplary keynote address and what was possibly a fitting case study, Jameel Ahmad, Deputy Governor, SBP, took the audience on Pakistan’s journey to embracing financial inclusion, wherein he spoke about responsible finance and its pre-requisites and cited some informative statistics highlighting Pakistan’s global recognition in embracing financial inclusion. He further expanded on State Bank of Pakistan’s impressive strategic approach towards responsible finance, in particular strengthening the framework for microfinance consumer protection and the national financial literacy programme being rolled out. He also took into account the obstacles that may pose a hindrance in achieving the goal of effective financial inclusion.
In a powerful and fitting closing keynote address, Nigel Kershaw, Chair, The Big Issue, said, “There is a lot of talk about ethical finance and in particular ESG and social impact because it’s talked about primarily by people involved in the financial sector. I believe the democratisation of capital is extremely central to what we do. Quite often, the discussion is top-down supply and product-led and for me, it often misses one of the most important social outcomes that is quite often forgotten – that’s the opportunity for ordinary people to invest and save in creating a better place to live for themselves, their families and the community around them. It’s not about mainstreaming ethical finance, it’s all about bringing the mainstream to us.”
Following the welcome and keynote addresses was the Plenary Session on the interplay between ethics, faith and finance which witnessed leading experts deliberate on how ethics should redeem its integral role within finance, beyond being just a convenient addendum.
Click on the links below to see press releases from the forum.
