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.”
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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.
Announcement – UK thought body is the first specialist Islamic Finance organization in the world to endorse the new UNEP-led guidelines for responsible banking.
Today Islamic Finance Council UK (UKIFC) became the first advisory body dedicated to Islamic finance to endorse the United Nations Environment Finance Initiative’s (UNEP FI) Principles for Responsible Banking (UN PRBs), joining 64 other international banks and stakeholders.
The UN PRBs represent an opportunity for the Islamic Banking industry, which is made up of over 1,300 financial institutions and windows, and is growing at 6% annually. It is a USD2.4 trillion contributor to the international banking marketplace forecasted to reach USD3.8 trillion by 2023 (Islamic Finance Development Report 2018).
The Principles are the first global framework to enable banks to integrate sustainability across their operations and enhance their positive impact with in the regions they operate in. Arab African International Bank (AAIB) (Egypt), Commercial International Bank (CIB) (Egypt), CIMB Bank (Malaysia) and Garanti Bank (Turkey), which operate in muslim-majority countries, are amongst the founding signatories.
The PRBs strongly align with the principles of Islamic Finance. Alignment and Impact are embedded in the foundational goals of the Maqasid al Shariah, a framework of purpose in Islamic practice that focuses on the objective of wealth and the preservation and continuity of life. Achieving communal prosperity and financial transparency underpin Shariah compliant finance, based on a law designed to protect all members of a society. Fairness and inclusion are themes of Islamic finance that resonate with the remaining four UN PRBs (Clients, Stakeholders, Governance and Transparency). Adopting the UN PRBs will encourage more innovation in the use of Islamic finance instruments to achieving the SDGs, such as green Sukuks.
Omar Shaikh, Member of the UKIFC’s Advisory Board said: “The UKIFC is the leading organization in Islamic finance actively promoting greater integration with the broader ethical finance marketplace. The underlying principles of Islamic finance align well with people, planet and purpose. The enhanced nature of stakeholder involvement in Islamic finance sits particularly well with the ethos of UNEP FI’s Principles for Responsible Banking 6 principles and for this reason we welcome and endorse them.”
Simone Dettling, head of the Banking team at UNEP FI said: “It is fantastic to see this coalition growing so quickly. The Principles for Responsible Banking are rapidly setting the global standard for what it means to be a responsible bank. We invite banks that haven’t endorsed them yet to join and show their commitment to the sustainable banking system of the future.”
The Principles, developed by 28 of the world’s leading banks, are currently out for global public consultation until May 2019 and will become available for signature in September 2019, during the UN General Assembly. Shariah compliant banks and intermediaries are encouraged to join the coalition by endorsing the Principles.
The UKIFC contributes to research and advisory on the alignment of the UN SDGs with the Maqasid al Shariah in the Islamic Banking industry, shaping the industry’s role in the broader ethical finance industry and promoting shared values across faith-based finance and investment institutions (The Edinburgh Finance Declaration).
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For media enquiries, please contact: Chris Tait at chris@ukifc.com
Notes to editors
Islamic Finance Council UK
The UKIFC is a specialist advisory and development body focused on promoting and enhancing the global Islamic and ethical finance industry. The organisation was launched in 2005 by a group of likeminded professionals who sought to make a contribution to the development of the Islamic finance industry. The UKIFC specialises in four core areas, being: 1) Ethical finance – helping to promote better co-ordination and understanding of the shared values between Islamic finance and the broader ethical finance arena; 2) Advisory – specialist capability in advising government agencies, regulatory bodies and financial institutions on creating enabling frameworks for Islamic finance; 3) Executive training – delivering bespoke capacity building programmes aimed at practitioners and regulators focused on commercial issues; and 4) Thought leadership – authoring reports, community education and providing industry comment towards influencing regulation and encouraging the development of the sector based on strong research and insights.
Principles for Responsible Banking
The six Principles for Responsible Banking that banks commit to are:
1) Alignment: We will align our business strategy to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national and regional frameworks. We will focus our efforts where we have the most significant impact.
2) Impact: We will continuously increase our positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from our activities, products and services.
3) Clients & Customers: We will work responsibly with our clients and our customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.
4) Stakeholders: We will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals.
5) Governance & Target-setting: We will implement our commitment to these Principles through effective governance and a culture of responsible banking, demonstrating ambition and accountability by setting public targets relating to our most significant impacts.
6). Transparency & Accountability: We will periodically review our individual and collective implementation of these Principles and be transparent about and accountable for our positive and negative impacts and our contribution to society’s goals.
For more information about the Principles visit www.unepfi.org/banking/bankingprinciples
- The Principles were launched by the Founding Banks’ CEOs on 26 November 2018 in Paris at the UN Environment Finance Initiative’s biennial Global Roundtable and the 4th Climate Finance Day, under the patronage of the French President Emmanuel Macron.
- The Principles are now in a six-month global public consultation period until 31 May 2019 before they will be signed by banks from around the world. Banks and stakeholders are invited to provide feedback and input to guide their further development, and to signal their support by becoming Endorsers of the Principles for Responsible Banking.
Event Listings for Edinburgh Ethical Finance Week - 22nd - 25th October 2018
As part of the Global Ethical Finance Initiative international leaders in ethical finance will be convening in Edinburgh at Ethical Finance 2018 taking place on 22nd - 23rd October 2018. The conference will be delivered in partnership with United Nations Development Programme (UNDP), Scottish Government and RBS.
Ethical Finance 2018 will explore themes including regaining trust in financial institutions, measuring impact, aligning capital to the UN Sustainable Development Goals (SDGs) and the $7trn demand for ethical investment products from faith and philanthropy groups.
The conference forms part of a wider ethical finance week that includes a series of events, organised and supported by Baillie Gifford, Church of Scotland, The Institute of Chartered Accountants of Scotland (ICAS), Ethical Finance Hub and the Financial Innovation Lab, that will take place in Edinburgh between the 22nd - 25th October 2018.
Please see below for details:
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ETHICAL FINANCE 2018* - 9am - 5pm, 22nd - 23rd October 2018
Hosted by RBS at the Gogarburn Conference Centre, Edinburgh and delivered by UKIFC in partnership with Scottish Government, UNDP and Responsible Investor
*includes an evening reception at Edinburgh Castle (6.30pm - 8.30pm, 22nd October 2018)
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INTERFAITH COLLABORATION ON ETHICAL FINANCE CELEBRATORY DINNER - 7pm - 9.30pm, 23rd October 2018
Hosted by Church of Scotland at Greyfriars Kirk, Edinburgh in partnership with UKIFC.
www.globalethicalfinance.org/edinburgh-declaration/
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UNDP ROUND TABLE: ROLE OF BLENDED FINANCE FOR THE SDGs - 1.45pm - 4pm, 24th October 2018
Hosted by Ben Macpherson MSP at the Scottish Parliament, Edinburgh and delivered by UKIFC in partnership with UNDP and Baillie Gifford.
Ethical Finance Round Table Overview
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INCLUSIVE FINANCIAL INNOVATION IDEATION EVENT - 10.30am - 4pm, 25th October 2018
Hosted by the Finance Innovation Lab at Foundation Scotland, Edinburgh.
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SUSTAINABLE FINANCE DISCUSSION - 6pm - 8pm, 25th October 2018
Hosted by ICAS at CA House, Edinburgh in partnership with Ethical Finance Hub.
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Over the past 8 years, along with our partners, the UKIFC has pioneered and developed a number of ethical finance initiatives in Edinburgh. Moving forward, these activities are being consolidated under one neutral umbrella - Global Ethical Finance Initiative (GEFI) - which aims to create a compelling proposition that positions Scotland as the "Davos" of ethical finance.
We believe Scotland is well positioned to become a global leader in ethical finance by facilitating dialogue and enabling innovative businesses, initiatives and thinking. To do so we welcome your participation and support so please come along to the Ethical Finance Week events and feel free to share with colleagues and associates.
If you wish to discuss the new Global Ethical Finance Initiative or any of the events in more detail please contact chris@ukifc.com or call Chris Tait on +44(0) 7931 103573.
JOB VACANCY - Senior Consultant and Researcher
We are currently recruiting a Senior Consultant and Researcher for a 12 month full time (or 4 days per week pro rata) contract based in Glasgow or London.
The successful candidate will be responsible for leading and undertaking consulting assignments, high-quality research and report writing activities for the organisation as well as supporting other colleagues.
The role will involve effective self-management and delivery of a range of developmental projects and client assignments across our four core work streams. The role will also include operational responsibility such as the management of budgets and resources.
UKIFC Senior Consultant and Researcher Job Specification
Please send your CV and a 300 word summary outlining why you are suitable for the role to umer@ukifc.com by 31st July 2018.
UKIFC Senior Advisor Talks to CNBC Africa about Financial Inclusion
According to the World Bank around 2 billion people do not use formal financial services and more than 50% of adults in the world’s poorest households are unbanked. A number of factors significantly affect financial inclusion and through working with policymakers, regulators and development agencies across the globe over several years we at the UKIFC are acutely aware of these.
Financial inclusion typically relates to transactions, payments, savings, credit and insurance products and services that facilitate day-to-day living, helping families and businesses plan for everything from long-term goals to unexpected emergencies. As account holders, people are more likely to use other financial services, such as credit and insurance, to start and expand businesses, invest in education or health, manage risk, and weather financial shocks, which can improve the overall quality of their lives.
UKIFC Senior Advisor, and financial inclusion expert, Modupe Ladipo joined CNBC Africa to discuss financial inclusion in Africa.
Please click on the link to watch the full interview - Keeping track of Nigeria’s financial inclusion strides
'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.
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.
TO REGISTER FOR THE EDINBURGH EVENT, PLEASE CLICK HERE.
For more information, please contact: info@ukifc.com
IIBI to Hold Public Lecture on Sukuk and Dana Gas at Dentons in London
The Institute of Islamic Banking and Insurance (IIBI) are to hold a public lecture by legal experts and academics at Dentons, in London.
The theme of the lecture is Sukuk, focussing on developments in the UK and in Global Markets and looking ahead to what the future holds, whilst exploring Dana Gas as a case study, in mitigating Shari'ah compliance risk.
The lecture will be introduced by Richard de Belder, Partner and Head of Islamic Finance at Dentons, and Advisory Board Member at UKIFC.
Click here to register for the event.