UKIFC supports Ethical Finance 2020
UKIFC was proud to be s upporter of Ethical Finance 2020. The annual summit, organised by the Global Ethical Finance Initiative, was held virtually for the first time in 2020 on the new EFx platform. The 4 days of the summit saw leaders from across finance participating in discussion on ethics, responsibility and sustainability in banking, investment, insurance, regulation and more.
Figures at the summit included H.E. Dr Bandar Hajjar, President of the IsDB, Eric Usher, Head of UNEP FI, economist & author John Kay, Rafe Haneef of CIMB, Richard Curtis, filmmaker & campaigner, Alison Rose, CEO of NatWest Group, Hasan Aljabri, CEO of SEDCO Holding Grouo, Samer Abu Aker, CEO of SEDCO Capital, Nigel Topping, the COP26 High-level Climate Action Champion, and Maunel Pulgar-Vidal, President of COP20.
Videos from all of the sessions are available now on YouTube.
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.
Islamic finance and the SDGs in the UK (Islamic Finance News)
This article originally appeared in Volume 17, Issue 29 of Islamic Finance News, and was authored by Omar Shaikh, co-founder and CEO of UKIFC and Chris Tait, Project Manager of UKIFC.
Islamic Finance and the SDGs – UK Update
With Covid-19 exposing the fragility of people and the planet the Sustainable Development Goals (SDGs) is a recognised global framework upon which we can, collectively, build our social, environmental and economic resilience. With its underlying Shari’ah principles, Islamic finance is naturally aligned to, not only support but, lead the financial services sector’s efforts towards achieving the Global Goals.
With a $2.5 trillion per year financing gap, the UKIFC has committed to a 24 month action oriented programme of activities to address barriers blocking Islamic Financial Institutions from embracing the SDGs.
A new high-level international taskforce to engage the Islamic finance industry with the SDGs was launched late last year. The taskforce, which is anchored in London and run by the UKIFC with the support of the UK Government, aims to promote understanding and encourage adoption of the SDGs amongst Islamic financial institutions.
Commenting on the launch Economic Secretary to the Treasury, John Glen MP, said: “This Taskforce will bring together the global Islamic finance community so it can help us meet our international, environmental and sustainability objectives – using UK expertise in sustainable finance to drive forward innovation around the world.”
The inaugural meeting was scheduled for March 2020, and recently took place virtually after a postponement, attended by leading Islamic finance institutions along with the Bank of England, John Glen MP and Islamic Development Bank President, HE Bandar Hajjar.
The UKIFC, in partnership with Malaysia based International Shari’ah Research Academy for Islamic Finance, recently launched the first report in a thought leadership series that aims to assist and encourage active engagement in support of the SGDs by the global Islamic finance sector. The report, Islamic Finance and the SDGs: Framing the Opportunity, provides an introduction to the SDGs within the context of Islamic finance, emphasising the opportunity the SDGs present to the Islamic finance sector. The report highlights:
- The limited participation from Islamic finance sector in leading UN initiatives such as Principles for Responsible Investment (PRI), Principles for Responsible Banking (PRB) and Principles for Sustainable Insurance.
- That to achieve SDG targets, Islamic Development Bank Member Countries need annual funding of between US$700 billion and US$1 trillion which represents around 40% of the total global SDG financing gap.
- An opportunity for Islamic finance to tap into emerging global liquidity pools seeking SDG-aligned products.
- Aligning with the SDGs supports the tayyib (pure, good) concept which contends that the focus of Islamic finance products and services should be on the evaluation of wider societal impact rather than an overly legalistic analysis of Shari’ah compliance.
In terms of practical action in 2016, DDCAP became one of the first Islamic financial sector signatories to the PRI thereby demonstrating a commitment to aligning responsible investment practices with the SDGs. The UK is also leading the way in relation to the Islamic finance sector’s engagement with the PRB. The principles offer the first SDG-aligned global framework that helps banks to integrate sustainability across their operations at the same time as enhancing their positive impact. In February 2019 the UKIFC became the first advisory body dedicated to Islamic finance to formally endorse the principles and Gatehouse Bank was the first fully Shariah compliant bank amongst the founding signatories when the principles are launched at the UN General Assembly in New York in September 2019.
Elsewhere UK-based Cogneum, in partnership with Bahrain Institute of Banking Finance and Innosoft Solutions, working to develop and launch the world’s first Shariah Governance software platform that links an Islamic bank’s activities to Maqasid al Shariah as well as the SDGs.
With assets expected to reach US $3.8 trillion in 2022, through its adeptness at innovative financial structuring, the global Islamic finance sector has the opportunity to take a leading role in driving capital towards the SDGs and UK organisations are well placed to contribute and support.
OTHER UK DEVELOPMENTS
All Party Parliamentary Group On Islamic Finance (APPGIF)
The APPGIF was re-constituted on 4th February 2020 with the continuing aim of promoting the understanding and development of Islamic finance both domestically in the UK and overseas as well as looking at the role Islamic finance can play in the wider ethical finance sector. It is an active body with 9 officer holders and a further 5 supporters from across the parties and from both sides of the house.
Sovereign sukuk
In 2014 the UK became the first country outside the Islamic world to issue sovereign Sukuk. The 5-year £200 million issuance received very strong demand, with orders totalling around £2.3 billion, and allocations made to a wide range of investors including sovereign wealth funds, central banks and domestic and international financial institutions. Following a “value for money assessment” in June 2019 former Chancellor Philip Hammond announced the UK will be issuing a second sovereign sukuk.
Other than the aforementioned the Debt Management Office announced in November 2019 that HSBC and Clifford Chance LLP were appointed on 4 November 2019 as structuring and legal advisors and, as yet, despite the procurement notice indicating that the contract would end on 3rd May 2020, there has been no announcement on the appointment of Structuring Bank(s). With the coronavirus pandemic causing great volatility in financial markets it remains to be seen whether the Sukuk will be issued this year.
By issuing a sovereign Sukuk the Government sought to pave the way for other public and private sector organisations to follow suit. However, Al Rayan Bank, which issued a public Sukuk for £250m in early 2018 to become the first bank ever to issue an Islamic bond in a non-Muslim country, has been the only other UK entity to enter the Sukuk market.
Shariah compliant student loans
As far back as 2013, when the UK hosted the ninth World Islamic Economic Forum, former Prime Minister David Cameron announced that “never again should a Muslim in Britain feel unable to go to University because they cannot get a student loan - simply because of their religion”. Despite the Government commitment a shariah compliant student loan product is still not available to prospective and existing UK students. Whilst progress has been made a wider review of student finance, as well as the coronavirus pandemic, have caused delays and the solution, which we believe to be based upon a Takaful model, has yet to be formally launched.
Shariah compliant real estate investment in Scotland
Pre-coronavirus as the real estate market in the Middle East stabilised, Gulf investors have sought to diversify their property portfolios and select the UK as a preferred investment destination. Whilst London continues to dominate the strong yield projections in other UK cities (including Manchester, Liverpool and Leeds) has driven the trend for Gulf real estate investment to flow northwards. There has been significant activity in Scotland where there is a separate and distinct legal basis for structuring shariah compliant deals. Over the last 2 years, supported by organisations such as BDO, Gatehhouse Bank, Ocorian and Shepherd + Wedderburn, over £250million of Shariah compliant real estate deals have been concluded for properties in Aberdeen, Edinburgh and Glasgow.
Islamic fintech
The UK Islamic FinTech Panel, an independent group of Islamic finance and fintech practitioners, continues to focus on connecting entrepreneurs with government, and building international connections with the inclusion of participants from Bahrain, Dubai and Pakistan. Fintech success stories in the UK include Yielders, an Islamic crowdfunding platform for UK property that allows investors to buy shares in houses that it buys and lets, Wahed Investment who have launched their US robo-advisory halal investments platform into the UK and Niyah, a mobile-only Islamic banking solution providing an interest-free banking experience. Kestrl, an ethical banking fintech, is set to launch in the UK later this year.
Inaugural Islamic Finance and the SDGs taskforce meeting takes place
The inaugural Islamic Finance and the UN Sustainable Development Goals (SDGs) Taskforce meeting took place virtually, in light of the Covid-19 pandemic, bringing together over 40 global Islamic finance leaders. The pioneering meeting, convened by the Islamic Finance Council UK (UKIFC) in partnership with the UK Government, explored the role Islamic finance can play in addressing the $2.5 trillion SDGs funding gap as part of the post-Covid-19 economic recovery.
Islamic Development Bank President Bandar Hajjar welcomed the initiative calling for greater cooperation between the public and private sectors and to use the SDGs to inspire financial innovation.
UKIFC and ISRA launch report on Islamic finance and the SDGs
The Islamic Finance Council UK (UKIFC), in partnership with Malaysia based International Shari’ah Research Academy for Islamic Finance (ISRA), has launched the first report in a thought leadership series that aims to assist and encourage active engagement in support of the UN Sustainable Development Goals (SDGs) by the global Islamic finance sector.
The report, Islamic Finance and the SDGs: Framing the Opportunity, provides an introduction to the SDGs within the context of Islamic finance, emphasising the opportunity the SDGs present to the Islamic finance sector.
The SDGs seek to address global economic, social, governance and environmental challenges by 2030 and have been adopted by 193 countries. They recognise that ending poverty and other deprivations complement strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our natural environment.
With a $2.5 trillion per year financing gap the UKIFC has committed to a 24 month action oriented programme of activities to address barriers blocking Islamic Financial Institutions from embracing the SDGs. The report follows the launch of a global Islamic Finance and SDG Taskforce that is supported by the UK Government and involves senior level participants from across the globe.
With Covid-19 exposing the fragility of people and the planet the SDGs is a recognised global framework upon which we can, collectively, build our social, environmental and economic resilience. With its underlying Shari’ah principles, Islamic finance is naturally aligned to, not only support but, lead the financial services sector’s efforts towards achieving the Global Goals.
TAKEAWAYS FROM THE REPORT INCLUDE:
- There has been limited participation from Islamic finance sector in leading UN initiatives (such as Principles for Responsible Investment, Principles for Responsible Banking and Principles for Sustainable Insurance) that support financial institutions to align with the SDGs.
- To achieve SDG targets, Islamic Development Bank Member Countries need annual funding of between US$700 billion and US$1 trillion which represents around 40% of the total global SDG financing gap.
- Opportunity for Islamic finance to tap into emerging global liquidity pools seeking SDG-aligned products.
- Alignment with the SDGs supports the tayyib (pure, good) concept which contends that the focus of Islamic finance products and services should be on the evaluation of wider societal impact rather than an overly legalistic analysis of Shari’ah compliance.
- With assets expected to reach US $3.8 trillion in 2022, through its adeptness at innovative financial structuring, Islamic finance is well placed to create instruments that drive capital towards the SDGs.
With a deep rooted commitment to social benefit Islamic finance should be at the front and centre of this new, sustainable economic paradigm. With the SDGs emerging as the shared blueprint for peace and prosperity for people and the planet, now and into the future, it is time for the global Islamic finance sector to step up and demonstrate its credentials for driving finance for positive change.
Executive Director of ISRA, Dr Akram Laldin, said:
“Islamic finance has a lot in common with impact investment and can play a major role in addressing the problems faced by society. It also has the potential to bring added value to the efforts to mobilize resources for the sake of realizing the SDGs.”
Richard de Belder, Advisory Board Member of the Islamic Finance Council UK, said:
“The UKIFC firmly believes that the Shari’ah principles which underpin Islamic finance make the sector well positioned to lead in promoting the SDGs to achieve global economic and social justice combined with sustainability and to drive home the point that we are all vice regents with temporary custody of the world’s finite resources and so need to act in a way that recognises this.”
Charles Haresnape, CEO, Gatehouse Bank, said:
“The environmental and social challenges facing the world impact everyone and equally we must all play our part in affecting change for the better. Islamic Finance institutions already champion fairness and ethics through Shariah principles and by working to align our business activities with the UN’s SDGs we can further solidify that commitment. As the first UK Shariah-compliant bank to become a signatory to the principles we have seen first-hand how oversight from the UN encourages us to scrutinise the impact of our activities and importantly, assess where we can improve. This is an important global scheme that we would encourage other Islamic finance providers to be part of to drive positive change.”
Stella Cox, CEO, DDCap Group, said:
“The 17 SDGs are an incredibly important resource as they provide a roadmap to address some of the world’s most pressing matters, from battling climate change to reducing social inequality and raising global living standards. Every institution, regardless of size, can and should seek to align its work with the objectives of the 17 goals. Furthermore, there is a natural alignment between the SDGs and the core values in our industry. UKIFC’s Islamic Finance and SDGs Thought Leadership Series provides us with the opportunity to call to action and inspire greater engagement of the global Islamic banking and wider financial industry in delivering against the targets set within the SDGs. We are proud to support the UKIFC’s valuable work during the publication of this important series of reports.”
Umer Suleman of UKIFC appears on BBC Radio 4's Beyond Belief
Umer Suleman of UKIFC appeared on BBC Radio 4’s Beyond Belief, to discuss Islamic finance, ethical finance and the Edinburgh Finance Declaration with presenter Ernie Rea.
“It is estimated that religious institutions own trillions of dollars’ worth of investments but some have acknowledged that their financial choices have not always reflected their principles. Can faith values help people to choose how to invest their money in ways that align with their ethics? Can new technologies like blockchain provide greater transparency and control, and where are the potential pitfalls for people looking to invest their money?
Joining Ernie Rea to discuss ethical investing are Rabbi Mark Goldsmith of the Edgware & Hendon Reform Synagogue and member of the International Interfaith Investment Group; Devie Mohan, an expert in the relationship between finance and technology; Martin Palmer President of Faith Invest and Umer Suleman a member of the UK Islamic Finance Council and a Sharia Finance Consultant.”
Listen now on BBC Sounds.
UKIFC Launches Brochure to Promote Shariah-Compliant FDI in Scotland
The UKIFC, in partnership with BDO, Gatehouse Bank, Ocorian and Shepherd + Weddernburn has launched a brochure to promote Shariah compliant real estate investment opportunities in Scotland.
With the London real estate market cooling Scotland is a strong and attractive investment destination and, with expertise in both conventional and Islamic finance, it offers competitive Shariah-compliant real estate opportunities.
A number of Shariah-compliant deals have been completed in Scotland in recent years. With a growing and stable economy, underpinned by strong yields, returns on Scottish commercial real estate exceeded the UK average in 2018. Investment reached a record level of £2.5 billion in 2018, up 46% from 2017.
With an enabling legal and regulatory framework and a network of specialist advisers and financiers Scotland provides significant potential for investors seeking Shariah-compliant commercial property structures.
Click HERE to view the brochure.
New Islamic finance taskforce to deliver global sustainable growth.
A new international taskforce is to be created with the support of the UK Government to engage the Islamic finance industry with the UN’s Sustainable Development Goals. The high-level Islamic Finance and Sustainable Development Goals (SGDs) taskforce will be anchored in London and run by the Glasgow-based Islamic Finance Council UK (UKIFC). Economic Secretary to the Treasury John Glen said the new initiative will ‘drive forward innovation around the world’. The UK Government will be the founding country partner when it begins in 2020, with an aim to promote understanding and encourage adoption of the UN SDGs amongst Islamic financial institutions. Gatehouse Bank has confirmed participation and interest has already been expressed from Malaysia and Dubai, as well as other UK organisations.
The UN’s SDGs are the blueprint to achieve a better and more sustainable future for all, addressing issues such as climate change, education and equality. But a recent analysis from UKIFC and Malaysia-based ISRA found a considerable lack of knowledge, misunderstandings and minimal engagement by Islamic financial institutions with the SDGs. Islamic finance is one of the fastest growing sectors in the global financial industry, with assets expected to reach US $3.8 trillion in 2022. Innovative financial structuring in the sector can help create instruments that drive capital towards the SDGs. The UK – and London in particular – has already become a centre for Islamic finance, helping finance developments such as The Shard and the Olympic Village. In 2014, the UK Government cemented the UK’s position as a hub for Islamic finance by becoming the first western country to issue sovereign Sukuk – Islamic bonds. With the City’s strength in conventional financial services, the strong legal framework and progressive outlook it continues to intellectually innovative and assist developments in the global Islamic finance arena.
The UKIFC was established in 2005 as a specialist advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. It was the first global specialist Islamic finance body to sign up to the UN Principles of Responsible Banking (PRB). With Gatehouse Bank the only fully Shariah-compliant signatory, the UK is leading the way in relation to the Islamic finance sector’s engagement with the global framework that aligns with the SDGs. In 2016, the Church of Scotland and the UKIFC signed a partnership agreement to co-develop an ethical finance solution open to all society, regardless of race, religion or ethnic background and based on the shared values between the faith traditions. The UKIFC supported this month’s Ethical Finance 2019 global summit in Edinburgh, which brought together over 400 senior representatives from more than 200 companies and organisation.
The Economic Secretary to the Treasury, John Glen MP, said:
“The UK is a world leader in Islamic Finance, so I am pleased we’re now a founding country partner and observer member of the new Islamic Finance SDG Taskforce. “This Taskforce will bring together the global Islamic finance community so it can help us meet our international, environmental and sustainability objectives – using UK expertise in sustainable finance to drive forward innovation around the world.”
Richard de Belder, Advisory Board Member of the Islamic Finance Council UK, said:
“Delivering the UN’s Sustainable Development Goals will require private sector involvement. “But business-as-usual in the global financial arena will not deliver the 2030 goals. “A step-change in private investment in SDGs is required, and Islamic finance, as one of the fastest growing sectors in the global financial industry, provides a unique opportunity for innovative solutions. “We need a fairer system of financial management that delivers more than just profit and the inherent principles within Islamic finance are naturally aligned to the sustainability agenda. “This new taskforce will explore ways to bring people and institutions together to help achieve the UN SDGs.”
Charles Haresnape, CEO, Gatehouse Bank, said:
“We welcome the opportunity to support and participate in the Islamic Finance and Sustainable Development Goals Taskforce. “Our Shariah-compliant finance principles mean that our products and services are ethical by design and as a founding signatory of the UN’s Principles for Responsible Banking, Gatehouse Bank has committed to strategically aligning its business with the UN’s Sustainable Development Goals. “We are confident that the taskforce will play a significant role in identifying innovative solutions for sustainable finance in the future.”
ENDS
NOTES TO EDITORS
The Islamic Finance Council UK (UKIFC) is a specialist, not-for-profit, advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. It has helped six countries develop enabling regulatory frameworks for Islamic finance, enhancing financial inclusion to over 15 million people, established the award-winning Ethical Finance Round Table series running since 2010, launched the world’s first joint venture between Islamic finance and the Church of Scotland, and delivered development sessions to over 500 Islamic scholars across the globe.
The framework of an Islamic financial system is based on elements of Sharia (the law of Islam) which governs Islamic societies. The fundamental concept of Islamic finance is that money has no intrinsic value and should only be used as a measure of worth.
London Islamic Finance Summit 2019 hears a wide range of views from across the globe
The UKIFC and International Shari’ah Research Academy for Islamic Finance (ISRA) 2019 London Summit, Reimagining Islamic Finance was hosted on 2nd October in association with Clifford Chance.
The event heard a wide range of views from across the globe. Speakers from early pioneers, to current leaders and a groundbreaking all-woman panel shared their views on the role Islamic finance could and should play in relation to delivering social impact.
Our Islamic Finance London Summit has become the premier London conference in Islamic Finance, convening a multi-stakeholder global audience interested in open, frank and challenging discussions on core issues framing the industry’s purpose and informing future direction.
UKIFC Confirms Support for Ethical Finance 2019
We are delighted to be formally supporting the Ethical Finance 2019 summit; the premier event in Edinburgh advocating finance for positive change. The 2 day gathering of banks, investors, asset owners, regulators and development agencies from across the globe will explore the transition to a sustainable financial system where capital drives positive change.
The summit on October 8 and 9 is being organised by the Global Ethical Finance Initiative and is supported by the Scottish Government. Bodies represented will include the United Nations, Bank of England, Financial Conduct Authority, RBS, Baillie Gifford and HSBC. It is the fourth time the summit has been staged in Edinburgh, and it will be attended by over 400 senior representatives from more than 200 companies and organisations from across the globe.
As part of the Ethical Finance summit UKIFC and Church of Scotland are co-hosting a private round table and dinner with global industry leaders / senior religious guests. The event, which will take place in Edinburgh on Wednesday 9th October 2019, will look at interfaith collaboration and the role of faith based values in modern finance. It will provide a unique opportunity to discuss progress and next steps in relation to the Edinburgh Finance Declaration.
We have a limited number of discount codes (applicable to early bird rates) for Ethical Finance 2019 so please get in touch with info@ukifc.com for details.
- Financing Sustainability: Designing for A Future on Earth
- SDGs and the UN Principles for Responsible Banking
- Worthy of Trust? Law, Ethics and Culture in Financial Institutions
- Accelerating Green Finance
- FinTech for Good
- Data Paradigm Shift – Exploring ESG Data Needs
- Values-Based Investing – an Asset Owner Perspective
- Measuring Impact – Asset Manager Challenges
- Finance for Sustainable Supply Chains
- Innovative Financing Structures and Using Blended Capital
[/grve_list][grve_title title="Confirmed speakers include:"][grve_list]
- Dame Susan Rice, Practitioner Member, Banking Standards Board
- Sir Rodger Gifford, Chair, Green Finance Taskforce
- Sarah Breeden, Executive Director for UK Deposit Takers Supervision, Bank of England
- Saker Nusseibeh, CEO, Hermes Investment Management
- Richad Soundardjee, Chief Executive Officer (Middle East), Societe Generale
- The Most Revd and Rt Hon Justin Welby, Archbishop of Canterbury (Video address)
- Tan Sri Dato Azman Mokhtar, Former MD, Khazanah Nasional Berhad
- David Blunt, Head of Conduct Specialists Department, Supervision – Financial Conduct Authority
- Charles Haresnape, CEO, Gatehouse Bank
[/grve_list]
More speakers are listed on www.ethicalfinance2019.com