'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:

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.

 

Sponsored by:                            


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.

Eventbrite - The Purpose of Wealth - Glasgow

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!

 The UKIFC worked with Middle East Global Advisors (MEGA) as Strategic Partner to the 2nd Global Ethical Finance Forum (GEFF) 2017, supported by Scottish Government and HM Government, and was hosted at the RBS Conference Centre in Edinburgh. Building upon the legacy of the inaugural Forum held in September 2015, the theme for GEFF 2017 - “Ethical Finance: Merging Profit & Purpose”, was in line with the Forum’s aspiration to serve as a platform of convergence and collaboration across the responsible finance universe, and to forge a vision for a more inclusive and sustainable financial system.The forum was attended by over 300 delegates from world-renowned organisations such as the Scottish Government, RBS, Standard Life Investments, Columbia Threadneedle, IDB, Cameron Hume Limited, Impax Asset Management, SEDCO Capital, Astana International Financial (AIFC) Authority, Vigeo Eiris, The Big Issue, State Bank of Pakistan (SBP), Hermes Investment Management, Global Alliance for Banking on Values and many more.

 

Cabinet Secretary for Infrastructure, Investment & Cities, Keith Brown MSP, addresses the delegates. Credit: Ian Jacobs

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.”

 

Omar Shaikh, Advisory Board Member of UKIFC welcomes the audience to Edinburgh
Credit: Ian Jacobs
Pic shows:

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.”

 

Deputy Governor of State Bank of Pakistan, Jameel Ahmad addresses the delegates. Credit: Ian Jacobs

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.

Credit: Ian Jacobs

UKIFC and Church of Scotland convene 3rd Shared Values Workshop at Dalmahoy Hotel and Country Club

The Islamic Finance Council UK (UKIFC) and Church of Scotland co-hosted a private event at the Dalmahoy Hotel and Country Club on 12th September 2017.

The round table was the third in a series of three workshops that forms part of a joint venture between Islamic finance and the Church of Scotland (see BBC). The round table picked up on discussions from earlier round tables held in Edinburgh and the House of Lords in London, delivering a draft Shared Values Framework.

Shaykh Ruzwan Mohamed presents the draft  Shared Values Framework to attendees

The framework was authored and presented by Shaykh Ruzwan Mohamed, one of the UK's leading Islamic theologians to an audience of seniorrepresentatives from the faith traditions and financial services sector including the Church of England, Church of Scotland and the Quakers, international scholars and academics, and senior figures from CMS, Wintons, DDCAP, Al Rayan Bank, RBS, HSBC and RJ Fleming.

HH Sanusi II, Emir of Kano (and former Governor of Central Bank of Nigeria), who has supported the initiative since inception and attended earlier round tables sent his apologies, commended the UKIFC and Church of Scotland in reaching this impasse and reiterated his support in a video message.

The presentation by Shaykh Ruzwan Mohamed was well received and appreciated by the audience who broadly agreed with its content. Contributions from Sir David Walker (former Chairman of Barclays Bank and Morgan Stanley) and other participants were taken on board and will form part of the considerations in moving on to the research and development stage of the joint venture to deliver a practical solution.

A selection of pictures from the event can be seen below:

Roundtable attendees enjoying the sunshine in Edinburgh
Humza Yousaf, MSP - Minister for Transport and the Islands, addresses the attendees at the Dalmahoy Hotel and Country Club

 

Sir David Walker (former Chairman of Barclays and Morgan Stanley) shares his insights with other attendees
Left: Stephanie Maier, Director of Responsible Investment at HSBC, Centre: Shaykh Ruzwan Mohamed, iSyllabus Right: Dr Richard Frazer, Church of Scotland

"Faith in finance" is the theme for the lastest Edinburgh Ethical Finance Round Table

The 13th Edinburgh Ethical Finance Round Table took place in the offices of Maclay Murray & Spens LLP at Quartermile on 15th June 2017.  The topic for the meeting was faith-based finance and the faith perspective on ethical investment.

The first presentation was given by Catherine Alexander, chair of the trustees of the Church of Scotland Investors Trust.  The Trust was established by the Church in the 1980’s to provide it and its congregations with cost effective investment management of their funds.  The total funds under management currently amount to around £400m and day to day management is delegated to three investment management firms.  Catherine indicated that the Trust has always operated on the basis of avoiding certain categories of investment, their current policy being to exclude any company with a higher than 15% involvement in armaments, alcohol, gambling, tobacco or tar sands.  Certain of these exclusions were not without their questions – for example the Church of Scotland itself is willing to accept heritage lottery funding for projects.  Increasingly the Trust is seeking ways of encouraging ethical behaviour by those they invest in and consider that they have an important role as lobbyists in this direction within the corporate sector.

UKIFC's Omar Shaikh (right) with Saquib Ismail (Al Rayan Bank) and Catherine Alexander (Church of Scotland Investors Trust)

Saquib Ismail, Senior Sales Manager with Al Rayan Bank gave the second presentation.  He opened by giving a brief history of the Bank, which was founded in 2004 (as Islamic Bank of Britain) and opened its first branch in Scotland last year (see Scotsman article).  It currently has around 50,000 customers and has grown rapidly in recent years.  In keeping with Sharia requirements all of its products are asset-based and all returns provided to depositors constitute profit and not interest, although for the most part this distinction is invisible to the Bank’s customers. Interestingly, the list of assets and activities which the Bank excluded is very similar to that mentioned by Catherine, although in the Bank’s case the exclusions are absolute rather than matters of choice and policy.  A recent notable development is that around 80% of the Bank’s deposit customers are now non-Muslims, although Muslims naturally remain a substantial majority of those taking “Islamic mortgages”.

The presenters then took a number of questions from the floor, one point which emerged being that any set of ethical investments principles needs to be kept under regular review, to take account of changing perceptions and understanding.  There was general agreement that most recent research had tended to indicate that returns from ethical investments generally fully matched those of conventional investment strategies.  David Cousland, of Fair Finance Agency, cited the work of Oikocredit in the developing world, including one notable project which had been running across the Muslim and Christian communities in Egypt for around 40 years.

Omar Shaikh (left), Martin Johnstone (centre) and Dr Richard Frazer (right)

The final part of the meeting saw a report on a “global first” for Scotland, namely the ongoing project between the Church of Scotland and the Islamic Finance Council UK to attempt to produce a financial product which would help to tackle financial exclusion, based on the shared values of the two faith communities (see BBC article).  Doctor Richard Frazer and Martin Johnstone, Convener and Secretary of the Church and Society Council, spoke for the Church of Scotland and Omar Shaikh for the UKIFC.   The aim will be to produce in the fairly near future a document setting out the conclusions reached on the applicable shared values, as emerging from the series of inter-faith workshops which had taken place, and there would then be a phase of “R & D” seeking to build out the detail of a financial product.  It was emphasised that the ultimate product would be open to the whole of society, not only those of the faiths involved.  The relevance of Scotland’s long history of ethical finance was noted and Doctor Frazer also made the point that part of the process would involve taking views from the “grass roots” communities which the product would be intended to assist.  In response to a question from the floor Mr Shaikh confirmed that it was the intention of involving other faith groups also in the process as matters moved forward.