Post-Normal Bonds: Financial Instruments for a Sustainable Economy

2023

Environmental nance and green banking are central drivers of the transition to a sustainable economy and essential components in solutions to climate change. This book presents the latest research on theory and practices in these interdisciplinary elds, incorporating both public and corporate nance. It introduces three parts-environmental investing and nancing, green banking and environmental policies in the public sector. The book explores the current trends, dynamics and ways forward for environmental nance and green banking, including fundamental theories (e.g., environmental Kuznets curve) and comparisons between traditional and green bond e ciency, corporate governance practices and disclosure, green central banking, climate nance, sustainable strategies, green Islamic banking, and public climate fund management in multi-country contexts. The contributors to this book highlight signi cant challenges ahead while recognizing potential opportunities, such as the revolution in green investments and trading in green bonds. This book is a welcome addition to the literature on environmental economics and nance and the economics of sustainability and climate change.

Journal of Modern Accounting and Auditing, 2024

Although green bonds are a relatively new innovation in the financial world, they are changing the way financial institutions address the growing issue of sustainability. They offer companies an alternative method for financing their socially responsible activities and raising capital for environmentally friendly projects. The various applications of green bonds in financial markets, such as financing the transition to low-carbon economy and decelerating the depletion of natural landscapes, are important in combating humanitarian crisis such as climate change. To be able to finance projects that mitigate the effects of climate change, it is vital to focus not only on developed countries, but also on underdeveloped and developing countries. The uncertain fate of the planet brought about by climate change can be made far less foreboding if large corporations and industries persist in their commitment to transitioning to more sustainable practices. Green bonds are an essential part of this commitment, and their full impact on climate change mitigation has yet to be realized.

journal of king Abdulaziz University Islamic Economics

The paradigm of Islamic economics and finance is guided by the motivation of comprehensive human development (CHD) and its preservation as manifested in the objectives of Sharīʿah (maqāṣid al-Sharīʿah). However, the real world free-market economies are driven by the linear economy paradigm under the influence of Hotelling’s 1931 famous work concerning the economics of exploiting natural resources, in which, the ecological environment is not recognized as a resource. The global financial architecture is designed to protect and preserve the linear economic paradigm. In practice, Islamic finance has also remained a ḥalāl sub-set of this system. The resultant social, environmental, and governance imbalances have recently led to different initiatives sponsored by the UN including the Sustainable Development Goals (SDGs). Like the maqāṣid, the SDGs also aim at achieving and preserving human development. In practice, for the first time, a real paradigm shift from the linear to the ecologic...

2016

The purpose of this paper is to explicate the congruence of innovative financial tools: Social Impact Bond (SIB) and Sustainable and Responsible Investment (SRI) sukuk with the principles of Islamic Finance, and explore their potential contribution towards the sustainable growth of the Islamic finance and societal wellbeing. Using various literature, the paper takes a comparative approach in explaining and relating the two innovative tools with the development of Islamic finance. The paper finds that there is a growing interest in innovative tools such as SIB and SRI sukuk globally. Furthermore, these tools exemplify the spirit of risk-sharing and social responsibility which are the major essences of Islamic finance that are currently missing in practice. The paper provides a reference towards understanding the mechanism and concepts of SIB and SRI sukuk. It also provides insight to the emerging interest in these innovative tools, and assesses the current innovative efforts in the I...

The Journal of Contemporary Issues in Business and Government, 2021

There is a need to cut down CO2 emissions by at least 45% by the year 2030 to attain a net zero. There is a need around the globe for a wide ranging shift to a low carbon foot print economy with a view to restrict the rising earth temperature status within 1.5 to 2 degrees. To achieve this objective one needs to support technological shifts and advances as well implementation of government policies on climate controls in the form of carbon taxes, green growth policies. Green bonds are instruments aimed at encouraging sustainability and to help build up on projects focused at environmental protection and implementing other climate related projects. The paper aims at studying comprehensively the global operation of green bond markets and its ongoing development. The result predicts that there is positive impact of these projects on the sustainable development. Use of Renewable Capacity From Solar, Wind And Hydro Technologies has been used that decreases Co2 Emission and thus significa...

Islamic Perspective for Sustainable Financial System, 2020

2022

Indonesian Journal of Sustainability Accounting and Management

The challenges posed by environmental degradation and abandoning of social rights to secure business interests have highlighted the importance of focusing on sustainable development within the global financial system, especially among citizens and policymakers. The timely declaration of the Sustainable Development Goals (SDGs) by the United Nations is appropriate in addressing environmental degradation. In fact, the SDGs have become part of the fundamental agenda and essential requirements of every business, including Islamic financial institutions. In particular, the concept of sustainable development is parallel with Islamic teachings, which promote welfare, security, and rights for the sake of the current and future generations. Furthermore, Islamic finance and the SDGs are closely associated, as the former is capable of serving a meaningful function in sustainable development to achieve the goals of implementing fair and equitable tools, promoting resource mobilization, and enab...

KnE Social Sciences, 2024

Along with the continued issue of green and sustainable development, fundraisers for finance project green is increasing. Principle investments in Islamic finance are combined with a draft-friendly environment and sustainability. The instrument of innovative Islamic finance-based continuity, like Green Sukuk in Indonesia, offers potential and importance for supporting the development economy in line with the effort for protecting the environment. This study aims to know the development of green sovereign Sukuk as part of creative and innovative financial market financing Islamic development. The method used by the author is qualitative, with a review of the literature. Literature research is a way to find relevant references to problems that arise. Research results show that the issuance of green Sukuk is an effort to apply sustainability in Indonesia. Green Sukuk is significant in Indonesia because this is one of the countries with a level of vulnerability and frequent disasters. Tragedy in growing hydrometeorology increases consequence changes, and increasing climate increases consequence development sustainability, which is not noticed in the environment. The continuous neglect of the environment has led to climate change causing droughts and floods which have a detrimental economic impact.

Proceedings of the International Conference on Law, Governance and Islamic Society (ICOLGIS 2019)

Indonesia's ratification of Paris Agreement through Law No. 16/2016 in October 2016 shows the commitment of the Indonesian government to prevent adverse impacts of climate changes. Such commitment, however, requires a huge sum of funding. Indonesia, as the country with the biggest Muslim population, lead the world to fund the environmentally-friendly project with the issuance of the first sovereign green sukuk. Green sukuk is a unique product that must meet sharia-compliance and green compliance. Currently sharia-compliance of sukuk green refers to OJK regulation number 3/Pojk.04/2018, regarding issuance and sukuk requirements, while green compliance refers to OJK regulation number 60/Pojk.04/2017, concerning the issuance and debt securities requirements environmentally friendly (Green Bond). However, because of its uniqueness which must fulfil both types of compliance, it is necessary to examine whether a new regulation is needed, specifically to regulate this green sukuk. This study used a juridical-normative method to study the issuance of green sukuk in terms of law and concept. Therefore, the purposes of this research are to review the laws and schemes in the collaboration. The research concludes: first, the green criteria of the Indonesian green sukuk, and, second, the sharia criteria of the Indonesian green sukuk.

2021

The article explores a sample of papers on Islamic finance and sustainability to define some streams of literature on this topic. The paper aims to validate whether it is possible to interpret the multitude of contributions on the subject in three different research streams that consider environmental, economic, and social sustainability. The research conducts a structured literature review on 73 articles extracted from Scopus. The bibliometric analysis revealed the descriptive statistics on this field and the main themes through the authors' keywords. The different perspectives showed the multicultural nature of the topic, which is not only addressed by Islamic countries. Moreover, it made it possible to find correspondence in the theorisation underlying the article and to categorise the topics covered by the authors.

Securing Sustainable Futures Through Blue and Green Economies, 2025

Indonesia became the world’s first country to issue Sovereign Green Sukuk to address climate change mitigation and adaptation. Another variant of Green Sukuk, although it still has not been issued, the Government of Indonesia has also prepared the framework of Blue Sukuk. The issue that arises is that sukuk generally has a redemption. In fact, the forerunner of the modern sukuk and the origin of sukuk itself, namely esham, does not have redemption. By using literature studies on the performance of Green and Blue Sukuk in Indonesia, also supported by focus group discussion with the related ministry and in-depth interviewing the expert, this chapter focuses on discussing: (1) The performance of Indonesia's Green Sukuk in the anthropogenic era; (2) The conception of Blue Sukuk to address climate change and at once to finance the blue economy; (3) The potential instruments of Islamic blended finance scheme and future direction for the Perpetual Sustainable Sukuk, a sustainable sukuk without redemption, to Islamic sustainable finance and Islamic fiscal sustainability.

Convergence of Islamic & Sustainable Finance, 2019

The 13th annual public lecture and workshop on Islamic finance took place under the auspices of the Centre of Islamic and Middle Eastern Law (CIMEL) at SOAS University of London from 13-14 February 2018. The SOAS-QFC public lecture and workshop allow a select group of around 30-40 leading shari’ah scholars, economists, legal practitioners, bankers and academics to gather together for a day long closed-door discussion on an important contemporary theme within the field of Islamic finance. The workshop and public lecture are unique events with almost no parallel in the Islamic finance industry. The workshop, in particular, is designed to discuss in the most rigorous fashion a contemporary topic, which participants choose by poll. Because the workshop is not open to the general public and adheres to Chatham House rules, which means that the information of the workshop may be reported but the source of the information may not be explicitly or implicitly identified, discussion is critical and without social or industry constraint. The public lecture is given by an esteemed practitioner in the Islamic finance industry. It addresses a particularly important topic which is related to the principal workshop theme. The reports included in this publication are derived from these events. They represent some of the most advanced thinking on the topic in the Islamic Finance Industry.

Journal of Islamic Economic Literatures

Islamic finance plays an important role in sustainable development. Sharia offers a comprehensive approach to many elements of life, including transactions. Sharia provides moral standards for economic operations and transactions in addition to legal laws. It outlines the fundamental ideas of economic systems, such as property rights, contacts, economic activity, and the principles that govern the behaviour and activities of individuals, markets, and the economy. Where Islamic financial instruments focus on implementing a vision that lies in three aspects: economic growth, social inclusion, and environmental protection. In this context, the goals of Islam are in line with the objectives of the sustainable development agenda (SDGs) which are to increase economic growth and realize a prosperous life and eliminate poverty. This study aims to determine the development of research trends in Islamic Finance and Sustainable Development Goals published by leading journals on Islamic financi...

SSRN, 2019

In recent years, the United Nations - Sustainable Development Goals (SDG’s) have risen to the top of the development agenda, with an emphasis on a partnership approach between the financed and financier. Given the scale of the financial resources required to support the SDG’s, coupled with the strain on government budgets, the mobilization of financing through innovative instruments becomes imperative. Islamic finance, through the Maqasid al-Sharia – Islamic moral economy values being the foundation for Islamic finance, where participatory modes of finance take center stage. Hence, the potential of the use of Islamic finance to support “Green” investments to finance the SDGs has been receiving increased attention. With recent issues of “Green” Sukuk to finance climate friendly projects, water and sanitation projects, clean energy projects. This is enhanced by the rise of the class of Ethical Social Governance (ESG) friendly investor and investment manager, who will mobilize the funds for investing in green sustainable projects. It is in this melting pot of ESG, Islamic moral value-based financial products, and impact investing, where innovative participatory finance will fusion to enable funding for green sustainable projects to actualize the SDG.