Financing a Sustainable Future: High-Level Working Group on Green & Sustainability Sukuk releases its second report at COP28

  • Global Green and Sustainability Sukuk issuance exceeded $10 billion by the third quarter of 2023 compared to $9.4 billion in 2022, according to London Stock Exchange Group (LSEG) data.
  • Indonesia, Malaysia, and Saudi Arabia have raised 77% of the total value of cumulative issuance as of Q3 2023
  • ESG sukuk issuance from GCC-based entities was $6.1 billion during the first nine months of 2023, nearly double their 2022 full-year level. UAE-based corporates issued a record $3.9 billion worth of these sukuk, accounting for 38% of the global total, making the UAE the largest issuance base for ESG sukuk to date in 2023.
  • Corporate issuers have become increasingly active in the green and sustainability sukuk market, accounting for 65% of issuance by the third quarter of 2023, an increase from 41% in 2022.

Global Green and Sustainability Sukuk issuance exceeded $10 billion by the third quarter of 2023, according to LSEG data published today by the High-Level Working Group (HLWG) on Green and Sustainability Sukuk.

As part of the Global Ethical Finance Initiative’s (GEFI) COP28 Unlocking Islamic Finance Summit held at the Dubai International Finance Centre (DIFC), the HLWG published its second report entitled “Financing a Sustainable Future: Green and Sustainability Update Report 2023”. The event, attended by over 300 practitioners, explored how Islamic finance and sustainability principles can be aligned through new standards and improved practices in the finance industry.

The HLWG was launched in November 2021 at COP26 by the Islamic Finance Council UK, HM Treasury, the Ministry of Finance in the Republic of Indonesia, Islamic Development Bank, LSEG, and GEFI.

The report is a follow-up to Financing a Sustainable Future: Green and Sustainability Report 2022, showcased at COP27 in Sharm El-Sheikh, that provided an introduction to, and overview of, the green and sustainability sukuk market. This year’s updated report includes the latest market figures and details of some recent flagship issuances.

The HLWG notes its support for the announcement by the Islamic Development Bank (IsDB, the Bank), the International Capital Market Association (ICMA) and LSEG on the sidelines of the COP28 in Dubai to develop a practitioners’ guide on the issuance of Sukuk in line with the Green Bond Principles and Sustainability Bond Guidelines as published by ICMA, which was a development suggested in the recommendations of its 2022 report.

The HLWG intends to use the momentum from COP28 to continue to raise awareness and inspire more green and sustainability sukuk issuances to help address climate change.

Omar Shaikh, Advisory Board Member & Director, Islamic Finance Council UK (UKIFC), commented: “The HLWG continues to affirm that progress can be made with consistent effort no matter how little. The updated report highlights great improvement in the sukuk market. The workplan of the HLWG having been approved, will provide room for more collaborations for the promotion of green and sustainability sukuk.”

Shrey Kohli, Director, Head of Debt Capital Markets, London Stock Exchange, and Chair of the HLWG on Green and Sustainability Sukuk, said: “With over $10 billion raised in the first three quarters, 2023 marks a record year for Green and Sustainability Sukuk. At COP28, we have seen the recommendations of the HLWG resonate and drive collaboration within the industry. We will continue to work with our partners to enhance the awareness of Sukuk as an asset class and accelerate progress towards climate and sustainability goals worldwide.”

Mustafa Adil, Head of Islamic Finance, Data & Analytics, LSEG, said: “Embracing sustainability in Islamic finance isn’t just a choice; it’s a responsibility. By aligning our principles with the global green movement, we can create a more equitable and environmentally conscious financial future for all.”

Read the report:

About the HLWG

The HLWG is a focused, high-profile group of global stakeholders that is led by its founding partners. Shrey Kohli, Head of Debt Capital Markets at the London Stock Exchange, is the current Chair. It has a 3-year initiative that directs investment to reduce greenhouse gas emissions in the world’s regions in most need. It is currently in its second year. The UKIFC, together with the Global Ethical Finance Initiative, acts as its Secretariat. The HLWG focuses on the following objectives:

  • Ensuring green and sustainability sukuk is highlighted at annual COP summits up to and including 2023 to increase awareness of the instrument and proactively encourage the issuance of such sukuk by all market stakeholders (corporates, multilaterals, and sovereigns) as a key Islamic financing tool.
  • Assist and enhance existing established global standard-setting bodies and regulatory initiatives run by the UN, IsDB, and others (e.g. PRI, NGFS, Transform, PRB) to encourage better alignment of the Islamic finance industry with the global green and sustainability financial movement.
  • Identify and address specific existing challenges for green and sustainability sukuk on the supply and demand side.

Read more about the HLWG here: https://ukifc.com/sdg/green-sukuk

About The Islamic Finance Council UK (UKIFC)

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 for 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. In 2020 the UKIFC, alongside the British Government’s Treasury department, established the Islamic Finance and Sustainable Development Goals (SGDs) taskforce, which will be anchored in London.

FOR MORE INFORMATION OR TO ARRANGE AN INTERVIEW PLEASE CONTACT:

Chris Tait – chris@ukifc.com / +44(0)7931 103573


New Tayyib Initiative Launches to Unlock $500 billion Opportunity for Islamic Finance

Dubai, 5th December 2023.

  1. The Islamic finance sector is valued at over $4 trillion and spans prominent financial hubs across the globe, including London, Luxembourg, Dublin, Istanbul, Dubai, Bahrain, and Kuala Lumpur
  2. Responsible investing is rapidly growing and is projected to surpass $30 trillion by 2026
  3. With over 1.6bn Muslims globally ensuring all voices are included in addressing the “S” in ESG enables a more considered and relevant solutions
  4. Initiative builds on the Shariah-compliant model of Islamic finance, to develop a Tayibb-inspired approach with enhanced ESG and sustainability considerations
  5. Tayyib Secretariat, involving global Islamic finance experts, will develop Tayyib-inspired investment principles, open up new markets and inspire new investment products
  6. Tayyib Secretariat will help align Islamic finance with conventional ESG and impact investing, providing a voice for Islamic for Islamic finance in the mainstream sustainable finance sector

A pioneering finance initiative inspired by the Islamic concept of “Tayyib” (pure, wholesome, and impactful) has launched today at GEFI’s Unlocking Islamic Finance Summit, hosted by the Dubai International Finance Centre.

The announcement of the Tayyib Secretariat comes at a time when the eyes of the world are focused on Dubai as it hosts the UN’s 28th annual climate summit, COP28. The initiative, an output of a 1-year market assessment commissioned by UKIFC and GEFI last year, is seeking to build on the Shariah-compliant model of Islamic finance, to develop a Tayibb-inspired approach with enhanced ESG and sustainability considerations.

Using the principles within the Maqasid al-Shariah (objectives of Shariah) and Qawaid (Islamic legal maxims), the Tayyib approach has the potential to offer a new best practice approach to responsible investing.

The Tayyib Secretariat is a global collaboration involving Malaysia, UAE and the UK, UAE. The Secretariat will be co-managed by the UKIFC and ISRA Consulting with DIFC the Host Financial Centre and PwC Dubai Technical Partner. An Advisory Panel (representing shariah scholars, multilateral bodies, and select industry developmental stakeholders) and an Industry Consultation Group will be established to support the Secretariat.

The Tayyib Secretariat will be focusing on:

  1. Developing a set of investment principles inspired by Tayyib across select asset classes
  2. Supporting Islamic asset managers to access global ESG liquidity pools
  3. Inspiring new innovative ESG linked, Tayyib-inspired products
  4. Aligning Islamic finance with conventional ESG and impact investing
  5. Providing a voice for Islamic for Islamic finance in the mainstream sustainable finance sector

At the launch, GEFI Global Steering Group Chair Dame Susan Rice said: “With global growth in sustainable finance, it is an opportune moment for the Tayyib concept and the beautiful principles it encapsulates to come to the fore in Islamic finance.”

Leading global scholar Dr. Mohamed Ali Elgari added “I have no doubts that Islamic principles can have a positive impact in the global transition to a more sustainable and equitable economy. I urge the Islamic finance industry to embrace the opportunities that lie ahead and to work collaboratively in the ESG finance space to create a more sustainable future for all.


Financing a Sustainable Future: High-Level Working Group on Green & Sustainability Sukuk releases its first report

  Press Release 24 Oct 2022

  • Global Green Sukuk issuance of $4.4 billion in H1 2022
  • Indonesia and the GCC are leading jurisdictions for green and sustainability sukuk, together making up 53% of total issuance.
  • The report recommends promoting common regional and international standards, developing capacity with issuers, and expanding the wider ecosystem.

Global green and sustainability sukuk issuance totalled $4.4 billion during the first half of 2022, following a record annual issuance of $6.1 billion in 2021, according to data published by the High-Level Working Group (HLWG) on Green and Sustainable Sukuk. HLWG has issued its first report titled “Financing a Sustainable Future“.

The HLWG was launched in November 2021, during COP26, by founding members Islamic Finance Council UK (UKIFC), HM Treasury, Ministry of Finance in the Republic of Indonesia, Islamic Development Bank, LSEG (London Stock Exchange Group), and Global Ethical Finance Initiative (GEFI.)

The report, produced in partnership with UKIFC, GEFI, and LSEG, provides insights on the green and sustainability sukuk market, discusses key recent transactions and regulatory developments, and provides views from key industry stakeholders conducted through discussions of the HLWG and an industry survey. Featuring a roadmap outlining key recommendations to facilitate the development of the green and sustainability sukuk ecosystem globally, key findings include:

  • Indonesia and the GCC are the leading jurisdictions for green and sustainability sukuk, together making up 53% of total issuance.
  • Sukuk have been the main driver of ESG debt issuance in the GCC, making up 80% of green and sustainability bonds sold by GCC-based issuers during the first half of 2022.
  • On average, 82% of annual green and sustainability sukuk have been issued in international markets since 2018, reflecting strong demand from overseas investors.
  • On average, green and sustainability sukuk generated order books worth 4.4 times their offering values, compared with 3.3 times for comparably sampled traditional sukuk.
  • The report recommends promoting common regional and international standards, developing capacity with issuers, and expanding the wider ecosystem.

Omar Shaikh, Advisory Board Member & Director, Islamic Finance Council UK (UKIFC), commented: “We are pleased the HLWG has filed its first report which finds that despite the increase in the issuance of green and sustainability sukuk, there is scope for greater capacity building across issuers, investors and professional services to scale the market to serve the Islamic world.”

Shrey Kohli, Director, Head of Debt Capital Markets, London Stock Exchange, and Chair of the HLWG on Green and Sustainability Sukuk, said: “The growth of green and sustainability sukuk will enable more countries and companies to access finance in a manner consistent with their faith and values. As sukuk are linked to assets that may be eligible for green and social projects, they will become vital tools to fund the U.N. Sustainable Development Goals and the just transition to Net-Zero, as has been evidenced by transactions by Working Group members such as the Islamic Development Bank and Etihad Airlines.”

“I sincerely thank all members of the HLWG for their expertise and insights. We look forward to working with the market to implement the recommendations as head towards the next two COPs in Egypt and the United Arab Emirates.”

Mustafa Adil, Head of Islamic Finance, Data & Analytics, LSEG, said: “This July marked five years since the first green sukuk was issued, raising $58 million. Green and sustainability sukuk have made great strides during this time, gaining traction across several Islamic capital markets in Southeast Asia, the GCC and Africa, with cumulative total issuance amounting to $21 billion by the first half of 2022.”

“As we approach COP27, it is our aim this report will inform and encourage more countries to adopt green and sustainability sukuk as an innovative approach for financing their SDGs and sustainable development plans.”

LSEG is well placed at the heart of global capital markets to be a strategic enabler of sustainable economic growth. It plays an important role in accelerating the transition to Net Zero and supporting the growth of the green economy. Refinitiv, an LSEG business, provides an Islamic finance database including over 1,500 Islamic financial institutions data covering $4 trillion of Islamic finance assets. The London Stock Exchange’s Sustainable Bond Market (SBM) is home to more than 300 green, social, and sustainability bonds, raising a combined £120 billion. Read the full report here: https://ukifc.com/greensukuk/

– Ends –

 

For further information

LSEG Press Office

Nandeep Roopray (EMEA)

Oliver Mann (EMEA)

Tarek Fleihan (MEA)

newsroom@lseg.com

+44 (0)20 7797 1222

www.lseg.com

 

About LSEG

LSEG (London Stock Exchange Group) is more than a diversified global financial markets infrastructure and data business. We are dedicated, open-access partners with a commitment to excellence in delivering the services our customers expect from us. With extensive experience, deep knowledge and worldwide presence across financial markets, we enable businesses and economies around the world to fund innovation, manage risk and create jobs. It’s how we’ve contributed to supporting the financial stability and growth of communities and economies globally for more than 300 years.

 

Data & Analytics

Our acquisition of Refinitiv means we can provide the breadth and depth of financial data and best-in-class analytics that customers expect – driving innovation and growth across global markets. And our high-performance solutions – from trading, to market surveillance, to wealth solutions and more – help to enhance the performance of our customers. FTSE Russell is a leading global provider of financial indexing, benchmarking and analytic services with more than $16 trillion benchmarked to our indices – and offers an extensive range of data services and research. The combination of Refinitiv and FTSE Russell provides LSEG with leading capabilities in data, analytics, indices and benchmarks.

 

Capital Markets

We offer our customers extensive access to capital markets and liquidity across multiple asset classes. We operate a broad range of international equity, fixed income, exchange-traded funds/exchange traded products and foreign exchange markets. Our Group is home to several capital formation and execution venues: London Stock Exchange, AIM, Turquoise, FXall and Tradeweb (through a majority ownership interest).

 

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UnaVista, a regulated platform that helps customers meet their reporting compliance obligations and reduce operational and regulatory risk through reporting, reference data and analytics solutions, further complements our Post Trade offering.

Through a comprehensive suite of trusted financial market infrastructure services – and our open-access model – we provide the flexibility, stability and trust that enable our customers to pursue their ambitions with confidence and clarity.

LSEG is headquartered in the United Kingdom, with significant operations in 70 countries across EMEA, North America, Latin America and Asia Pacific. We employ 25,000 people globally, more than half located in Asia Pacific. LSEG’s ticker symbol is LSEG.


REPORT ANNOUNCEMENT: Islamic Finance: Shariah and the SDGs

With COP 26 in Glasgow just six weeks away, we’re delighted to have launched the final report in our 4-part thought leadership series ‘Islamic Finance: Shariah and the SDGs’ written in partnership with Malaysia based International Shari’ah Research Academy for Islamic Finance (ISRA). This latest report is designed to assist and encourage active engagement in support of the UN Sustainable Development Goals (SDGs) by the global Islamic finance sector.  

The report highlights the US$5-7 trillion annual funding gap to achieve the SDGs by 2030 which cannot all be obtained from government or donor agencies.  With its underlying Shariah principles, Islamic finance is naturally aligned and well positioned to lead the private financial services sector’s efforts towards funding the SDGs. 

By providing a detailed analysis the views of Shariah scholars on the alignment of Islamic finance and the SDGs the report explores the current awareness levels and captures views on SDG implementation. 

The UKIFC and ISRA have published  this report  to encourage Islamic finance institutions (IFIs) to embrace the SDGs and demonstrate that consideration for people, planet and purpose can coexist with profit and underpin  the next generation of Islamic financial products.The SDGs have a clear development agenda, relevant to the world of Islamic social finance (zakat, ṣadaqah, waqf, etc.), but this report presents a clear challenge to the private Islamic finance sector to build the achievement of the SDGs into their commitments to the fight against climate change.  

REPORT  FINDINGS : 


  • The alignment of the SDG agenda and Islamic finance  presents a clear opportunity to attract capital from across the global financial system. SDGs provide an opportunity to Islamic Banks and Financial Institutions that should be adopted as part of their business strategies. 


  • The SDGs are aligned to Maqasid al-Shariah (the objectives of Shariah) with very minor differences in certain aspects of Shariah. 


  • In pursuing SDGs in socio-economic activities, philanthropic instruments such as waqf, zakat and ṣadaqah will rank supreme due to their potential in instilling cooperation, solidarity and alternative finance. 


  • The issuance of sustainable sukuk has been part of the Covid-19 response through an alignment with the underlying principles of Islamic finance. 


  • The emergence of fintech should trigger innovations among the Islamic finance industry players and promote creativity by providing new perspectives and practices in financial transactions.  


  • Shariah scholars should understand the technical aspects of sophisticated financial instruments and the implementation of fintech in Islamic finance to keep pace with the developments that are taking place in the market. In this regard, Shariah scholars and industry players must work together to produce innovative Shariah-compliant products that fulfil the needs of the society and help in realizing the objectives of SDGs. 



You can download the full report here.


REPORT ANNOUNCEMENT: Innovation in Islamic Finance: Green Sukuk for SDGs

New report estimates an additional US$30-50bn can be raised by 2025 through green and sustainability sukuk  to deliver the United Nation’s Sustainable Development Goals.

Indonesia – 28th September 2021, United Nations Development Programme (UNDP), in partnership with the Islamic Finance Council UK (UKIFC), has today launched a pioneering report setting out the important role Islamic finance can play in delivering the finance needed across the world’s most vulnerable regions.

The UN Climate Summit (COP26) in Scotland, in less than six weeks’ time, brings together world leaders to hammer out a deal to reduce greenhouse gases and adapt to the impacts of climate change. The report shows how green sukuk bonds can provide a major part of the US$100bn in climate finance needed for developing countries.

UKIFC Managing Director Omar Shaikh presented the report’s findings to over 500 senior finance leaders at the first Islamic Finance and the Sustainable Development Goals Virtual Global Summit that took place today.

Sales of new Green sukuk bonds have grown from US$500m in 2017 to US$3.5bn in 2019. The Republic of Indonesia (ROI), in partnership with the UNDP, issued the world’s first Government  green sukuk in March 2018 (raising US$1.25bn) and the world’s first retail green sukuk in November 2019 (raising IDR1.4trn or USD$104.4m).

The report takes a detailed look at the best practice approach to green sukuk taken in ROI and other Islamic finance regions.

REPORT FINDINGS: 

  • Upfront investment is needed to develop a green framework and  independent certification to assure investors that green sukuk bonds are not greenwashing.
    • Demand from western global investors for Environmental, Social, and Corporate Governance (ESG) investments gives green sukuk bonds  the opportunity to attract  major new investors who otherwise would not have considered sukuk bonds for their portfolios.
    • Green or sustainability sukuk bonds might lower the cost of raising vital climate finance. Malaysia has seen the largest volume of sukuk issuances supported and facilitated by a number of Government initiatives.
    • Indonesia has a very limited corporate sukuk market and has not seen any corporate green sukuk issuances. There is a need to ensure sukuk have a level playing field with no additional burdens in comparison to conventional bonds; in addition, tax incentives could encourage corporate sukuk issuances.
    • The opportunity is there for Shariah scholars to positively influence ESG aspects as part of their Shariah review of sukuk issuances.
    • A challenge within the Islamic finance industry is the general lack of experience and depth of knowledge in relation to ESG matters. It is recommended organisations such as the Accounting and Auditing Organization for Islamic Financial Institutions take a lead and develop guidance for Shariah scholars.

The principles of Islamic finance are underpinned by the objectives of Islamic law and match many of the aims and objectives of the agenda for sustainable development goals adopted by all United Nations Member States in 2015 to provide a shared blueprint for an urgent call for action by all countries to end poverty, improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.

The report demonstrates how this unique alignment of the SDGs and Islamic finance provides a clear opportunity for green sukuk bonds to bridge the gap in private sector finance needed to meet countries’ climate targets and  accelerate achieving their wider Sustainable Development Goals.

You can access the report in full here.

See also:

https://ukifc.com/sdg/

https://ifikr.isra.my/library/SR/1

 


UKIFC launch 'Islamic Finance and the SDGs' report

The Islamic Finance Council UK (UKIFC), in partnership with Malaysia based International Shari’ah Research Academy for Islamic Finance (ISRA) and the Global Ethical Finance Initiative (GEFI), has today launched the third report in its 4-part 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.

UKIFC Senior Adviser Sultan Choudhury will formally announce the report, to an audience of over 3,000 financial practitioners, at GEFI’s flagship annual Ethical Finance Summit.

The report provides an analysis of responsible banking in the Islamic finance sector, assessing the level of engagement with the Principles for Responsible Banking (PRB) amongst banks in Organisation of Islamic Cooperation (OIC) member states and analysing the approaches used by 9 Islamic finance signatories. It also features notes from interviews with Al Baraka Banking Group, Bank Pembangunan Malaysia Berhad, CIMB Group, Gatehouse Bank, Gulf International Bank (UK) and Jaiz Bank who have all shown notable leadership in responsible banking.  

The PRB, which launched in 2019, is the world’s leading framework for responsible banking and is underpinned by six Principles that help signatory banks to align with the SDGs and the Paris Climate Agreement.

With its underlying Shariah principles, Islamic finance is naturally aligned to responsible banking and is well positioned to lead the financial services sector’s efforts towards achieving the SDGs. However, whilst a small number of organisations are making significant progress the report has highlighted the pressing need to raise awareness, in OIC member states and beyond, of responsible banking and the benefits to be achieved by integrating Shariah compliance with sustainable finance strategies and becoming PRB signatories.

TAKEAWAYS FROM THE REPORT INCLUDE:

  • 49 of the 57 OIC member states do not contain any PRB signatory organisations.
  • When the PRB was launched in 2019, 14.3% of the founding signatories were based in OIC member states. Now only 10.0% of the 221 PRB worldwide signatories are based within OIC member states despite the OIC member states having a collective population of over 1.82 billion (24% of the total world population).
  • Of the 61 countries containing PRB signatory organisations, 13.1% are OIC member states.
  • Within the 8 OIC members states that contain PRB signatories there are 22 signatory organisations, located in Africa (50.0%), Europe (27.3%) and Asia (22.7%).
  • 38 PRB signatories offer Islamic finance products and services, which equates to 17.2% of all PRB signatories.
  • The majority of Islamic finance institutions that are PRB signatories, 27 of the 38 organisations, are based outside OIC member states, across Europe, Asia, Africa, Oceania and the Americas.
  • Only 3 of the 38 institutions offering Islamic finance products or services are fully Shariah-compliant, namely Al Baraka Banking Group (Bahrain), Gatehouse Bank (UK) and Jaiz Bank (Nigeria).  
  • The most popular Islamic product / service offered by non-OIC member states signatories is corporate finance, with 40.7% of signatories offering this. Amongst OIC member states the most popular product / services are personal banking and personal, business and corporate banking, at 27.3%.

PRB signatories are currently underrepresented in OIC member states, suggesting the PRB should increase its activities within OIC member states. Awareness of the PRB in OIC member states could be increased through working groups, targeted awareness and outreach activities. Given the mutual benefits of becoming PRB signatories to both Islamic finance institutions and the responsible banking industry, increasing engagement should be treated as a priority.

Download the report.


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 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:

Stella Cox
Stella Cox

“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.