High-Level Working Group on Green Sukuk

A group of global stakeholders working together to promote and facilitate the power of green sukuk

ESG Sukuk Survey 2024: Exploring ESG Sukuk Market Dynamics

As part of our collaboration with the London Stock Exchange Group (LSEG) and Global Ethical Finance Initiative (GEFI), co-founding members of our High-Level Working Group on Green and Sustainable Sukuk (HWLG); we are focusing on the rapidly growing market of Green and Sustainability Sukuk (ESG Sukuk).

ESG Sukuk has gained considerable traction in international markets, where ESG investments have become mainstream. The data from 2023 shows that ESG Sukuk was oversubscribed by 4.6 times on average, compared to 3.6 times for traditional Sukuk. These findings support the conclusion from the HLWG’s “Green and Sustainability Sukuk Report 2022” that the higher demand for ESG Sukuk is driven more by ESG investment mandates than by Shariah compliance mandates.

On the supply side, ESG Sukuk issuance continues to grow at double-digit rates, predominantly in the four largest markets. There have been isolated issuances from other OIC markets, indicating that issuers in these regions face challenges such as lack of awareness, additional costs, or unavailability of suitable projects.

This comprehensive study aims to understand the dynamics of the ESG Sukuk market, and your insights and perspectives would be invaluable. Your contributions will be prominently featured in the 2024 edition of the Green and Sustainability Sukuk Update Report, which will be published later this year.

Fill the survey by clicking the link below:


Guidance on Green, Social and Sustainability Sukuk launched.

Two pioneer members of the High-Level Working Group on Green Sukuk (HLWG) -the London Stock Exchange Group (LSEG) and the Islamic Development Bank (IsDB) have, in partnership with International Capital Market Association (ICMA), launched the Guidance on Green, Social and Sustainability Sukuk in Saudi Arabia at the 50th Golden Jubilee anniversary of IsDB on 29th April, 2024. The collaboration to publish this guidance was announced at COP28. The guidance is intended to give issuers and market players much-needed direction on how to label sukuk as green, social, or sustainable.

Collaboration with ICMA announced

The HLWG, represented by the Islamic Development Bank (IsDB) and London Stock Exchange Group (LSEG), announced at COP28 in Dubai, a collaboration with ICMA to produce green sukuk guidance in line with the Green Bond Principles. The pioneering initiative will support the growth of the green sukuk market for mobilizing climate finance from global capital markets.

IsDB, LSEG and ICMA will work together to develop the guidance for global capital market practitioners. It is expected that the guidance will enhance investor awareness of the sukuk asset class.

About the High Level Working Group

During COP26, the Islamic Finance Council UK (UKIFC), Her Majesty’s Treasury, Ministry of Finance in the Republic of Indonesia, Islamic Development Bank, London Stock Exchange Group and the Global Ethical Finance Initiative (GEFI) came together to launch a High Level Working Group on Green Sukuk (HLWG).

Our “Innovation in Islamic Finance: Green Sukuk for SDGs” report identified that an additional US$30+ billion of capital towards the SDGs can be raised by 2025 through green and sustainability sukuk. The HLWG has been launched to unlock this potential and deliver the goals of the Paris Agreement.

  • Industry-led
  • Policy-focused
  • International
  • Outcome driven

Founding Partners

Strategic Partner

Working Group Aims

The HLWG will be a focused, high-profile group of global stakeholders that will be led by the founding partners. The UKIFC together with Global Ethical Finance Initiative will act as Secretariat. The HLWG will focus on the following objectives:

Ensure 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 key 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.

Working Group Meetings

January 2024

The 4th meeting of the HLWG was held virtually in January 2024 to provide members with updates on the group’s action plan. Chris Tait from the group’s Secretariat gave a brief recap of the last meeting and associated activities and action points which touched on all areas of the work plan. The Chair, Shrey Kohli gave a detailed overview of the progress on the guideline to be published in collaboration with the International Capital Market Association (ICMA) and efforts that have been made with representatives of the IsDB. Members also made contributions on how to improve the collaboration. He further noted that the working group’s three-year term would formally end at COP29 this year in Azerbaijan.

Mustafa Adil of LSEG discussed the latest Green and Sustainable sukuk report. He highlighted the updates that were made and the marketing efforts to publicise it. The Secretariat also showcased the draft of the online Knowledge Portal. Updates were given on other aspects of the work plan such as the capacity building programme and activities set for the forthcoming IsDB AGM.

May 2023

At the 3rd meeting of the High-Level Working Group in May 2023, members joined virtually to discuss Green and Sustainability Sukuk. Proceedings commenced with opening remarks by Shrey Kohli (London Stock Exchange Group, Working Group Chair), who provided the background to the Working Group. The importance of the state of the market report was emphasized, and members were urged to take the opportunity to comment on the work plan and consider how to make the most of COP28.

Thereafter, the Secretariat provided a detailed overview of the work plan which covered: capacity building, education & awareness, knowledge portal, reporting frameworks, and tactical opportunities. Representatives of Norton Rose Fullbright, HSBC Amanah Malaysia Berhad, UKIFC, DDCAP Group, and Dechert then provided their contributions.

May 2022

The meeting commenced with opening remarks from the Secretariat and Chair, Shrey Kohli who provided an overview of challenging market conditions this year including lower sukuk issuance, inflation, supply chain issues, and geopolitical tensions. He noted that however, the broader green and sustainable finance markets continue to see growth.

Presentations were delivered highlighting the need to expand beyond narrow green definitions towards wider sustainable and social projects to increase sukuk deal flow. Law firms, including Norton Rose Fulbright, Dechert, and White & Case, discussed the need to leverage existing frameworks like ICMA for sukuk guidelines. Mustafa Adil from Refinitiv provided an update on their upcoming market report, emphasizing alignment between Islamic finance, sukuk, and SDGs.

March 2022

Omar Shaikh (Islamic Finance Council UK, Working Group Secretariat) and Shrey Kohli (London Stock Exchange Group, Working Group Chair) gave the opening remarks. Shrey provided background on the Working Group’s formation, objectives, and initial plans. This includes issuing a state of the market report around COP 27 with input from members. He noted that Technical Committee specifically aims to address challenges and opportunities in growing sustainability sukuk markets.

An open discussion then highlighted key issues inhibiting growth. Main themes included building internal sustainability capabilities within issuing institutions, addressing asset scarcity, as well as overcoming product standardization and accounting alignment issues limiting cross-border investment flows. Suggestions included showcasing case studies and better aligning with accounting standards

Knowledge Hub

The Green and Sustainable Sukuk Knowledge Portal

The Portal provides an online platform from which to access and analyse comprehensive information on green and sustainable sukuk. The knowledge portal serves as a ‘one–stop’ shop which would serve as a global resource for green and sustainable sukuk. key studies, reports as well as contributions from issuers within the market that can be shared among participants. 

Visit the Knowledge Portal

Financing a Sustainable Future

Green and sustainability sukuk report 2023

Global financial markets had a tumultuous year in 2022. Major central banks responded to concerning inflation levels with a series of rate hikes, while geopolitical tensions heightened. As a result, debt markets experienced a significant decline, with primary market activity falling by 19% compared to 2021. ESG bond markets saw an even bigger decline, dropping 26% as some issuers were reluctant to go to market with some opting to is issue `vanilla’ bonds during volatile market conditions. However, we have seen a rebound in 2023 and expect ESG bond issuance to approach 2021’s record-high of $1 trillion.


Financing a Sustainable Future

Green and sustainability sukuk report 2022

With our partners the London Stock Exchange Group (LSEG) and the Global Ethical Finance Initiative (GEFI), we launched a report on green and sustainability sukuk, examining the potential for Islamic fixed income products to deliver financial returns and impact for the SDGs. The report was presented at the Dubai launch event for GEFI’s Path to COP28 campaign on 24th October.


Innovation in Islamic Finance:

Green Sukuk for SDGs

In 2015, the United Nations (UN) established a blueprint for addressing economic, social, governance, and environmental challenges – the Sustainable Development Goals (SDGs). It is estimated that funds of up to US$7trn are required on an annual basis for initiatives aligned to the SDGs.

This report, commissioned in conjunction with UNDP Indonesia, explores the role of green sukuk in the context of climate change and the green economy. It highlights the potential of green sukuk to be used effectively by OIC member states and beyond, to finance NDC’s by attracting investment at scale to projects that reduce national greenhouse gas emissions in line with the Paris Agreement.