Unlocking Islamic Finance Power Roundtable hosted at Simmons and Simmons
Following the Path to COP28 Sustainable Finance Summit, a select group of Islamic finance and sustainable finance practitioners gathered to discuss the alignment of Islamic finance with sustainability and the SDGs.
Regional and international financial institutions shared their experience on navigating both the conventional SDG financial market and the Islamic finance market to expedite the incorporation of the UN SDGs into Shariah products. Participants emphasized how Islamic finance is rooted in an ethical approach, but development in terms of ESG has been highly uneven.
However, the Islamic finance sector needs to act decisively on sustainability. At COP28 all eyes will be on the finance sector in the GCC, so being seen to be doing nothing is not an option, and sustainability is vital to capturing a younger generation of consumers.
Several institutions pointed to the value of “soft law” frameworks such as UN PRI and UN PRB in providing a clear action plan on sustainability. This means both to offering individual sustainability products and, perhaps more importantly, incorporating sustainability into general operations. The latter requires training at every level of an organisation, starting at the top.
There is a need to understand what consumers want, which the recent UKIFC study into Islamic banking customers and the SDGs does. Once this is established, consumers can be educated about what Islamic finance can do, and how it can do it: this can be a challenge for an acronym-heavy industry usually modest about its achievements.
This modesty is a key limitation to the global expansion of Islamic finance, hampering international awareness of the opportunities associated with it, the differentials to conventional banking (e.g. how late payment fees are handled more ethically in Islamic finance), and the pricing and commercial positioning advantages (e.g. sukuk’s resilience to price shocks in emerging markets).
COP28 presents a key moment to catalyse action in sustainable Islamic finance, drive awareness and uptake of the UN PRB and PRI, and contribute towards climate action.
Learn more about the UKIFC’s new Islamic finance and the SDGs: Retail banking customer perspectives report.
Unlocking Islamic Finance Power Roundtable hosted at Simmons and Simmons
Following the Path to COP28 Sustainable Finance Summit, a select group of Islamic finance and sustainable finance practitioners gathered to discuss the alignment of Islamic finance with sustainability and the SDGs.
Regional and international financial institutions shared their experience on navigating both the conventional SDG financial market and the Islamic finance market to expedite the incorporation of the UN SDGs into Shariah products. Participants emphasized how Islamic finance is rooted in an ethical approach, but development in terms of ESG has been highly uneven.
However, the Islamic finance sector needs to act decisively on sustainability. At COP28 all eyes will be on the finance sector in the GCC, so being seen to be doing nothing is not an option, and sustainability is vital to capturing a younger generation of consumers.
Several institutions pointed to the value of “soft law” frameworks such as UN PRI and UN PRB in providing a clear action plan on sustainability. This means both to offering individual sustainability products and, perhaps more importantly, incorporating sustainability into general operations. The latter requires training at every level of an organisation, starting at the top.
There is a need to understand what consumers want, which the recent UKIFC study into Islamic banking customers and the SDGs does. Once this is established, consumers can be educated about what Islamic finance can do, and how it can do it: this can be a challenge for an acronym-heavy industry usually modest about its achievements.
This modesty is a key limitation to the global expansion of Islamic finance, hampering international awareness of the opportunities associated with it, the differentials to conventional banking (e.g. how late payment fees are handled more ethically in Islamic finance), and the pricing and commercial positioning advantages (e.g. sukuk’s resilience to price shocks in emerging markets).
COP28 presents a key moment to catalyse action in sustainable Islamic finance, drive awareness and uptake of the UN PRB and PRI, and contribute towards climate action.
Learn more about the UKIFC’s new Islamic finance and the SDGs: Retail banking customer perspectives report.