The theme "Islamic Finance and Sustainability" explores the relationship between Islamic finance and the concept of sustainability. This research Hub explores how Islamic finance, based on its principles and values, promotes the realisation of Sustainable Development Goals (SDGs) in economic, social and environmental aspects.
In the fields of teaching and research, the "Innovations in Islamic Finance" can be enhanced through the SDG university platform in the following aspects.
Integrate with SDG Courses: Design courses that blend Islamic finance innovations with SDG goals. For example, create courses like "Islamic Finance and Sustainable Development Goals", elaborating on how Islamic finance instruments such as green sukuk can contribute to environmental sustainability (SDG 13).
Case Study Courses: Develop case study courses centered around successful applications of Islamic finance innovations globally. Students can analyze the cases of Malaysia's Value - Based Intermediation and understand its impact on the economy, community and environment.
Lectures by Practitioners: Invite industry practitioners and experts in Islamic finance to give lectures. They can share their practical experiences and the latest industry trends, helping students bridge the gap between theory and practice.
University - Industry Collaboration: The SDG university platform can serve as a bridge to foster cooperation between universities and Islamic financial institutions. They can jointly conduct research on topics like the application of fintech in Islamic finance and its impact on financial inclusion.
Multidisciplinary Research Teams: Form multidisciplinary research teams consisting of scholars from finance, economics, sociology, and environmental science. They can conduct in - depth research on the complex issues at the intersection of Islamic finance and SDGs.
Group Discussions and Projects: Organize students into groups to discuss and conduct projects related to Islamic finance and SDGs. For example, they can work on projects about designing Islamic finance solutions for a specific SDG in a certain region.
Funding Support: The SDG university platform can set up special research funds to support innovative research projects in Islamic finance. This encourages researchers to explore new areas and solutions.
Publication and Dissemination: The platform can help researchers publish their findings in high - quality academic journals and provide channels for presenting and promoting research results, increasing the influence of Islamic finance research.
Academic Awards: Establish academic awards to recognize and reward outstanding research achievements in the field of Islamic finance and SDGs, motivating researchers to strive for excellence.
Queen Mary University of London, England, United Kingdom
This research hub will explore the relationship between Islamic finance and the concept of sustainability.
Islamic Finance: Islamic finance is a financial system that complies with Islamic teachings. Its core is derived from the Quran and Sunnah, which provide a legal and moral framework for financial activities. It has several unique principles: First is Prohibition of Riba, it bans the concept of interest in traditional finance and adopts interest-free loans like Qardul-Hasan and profit-sharing models such as Mudaraba; Second is Prohibition of Gharar, it prohibits gambling and speculative behavior to ensure the stability of the financial market; and Third is Prohibition of Investment in Haram Industries, it prohibits investing in industries against Islamic teachings, such as those related to alcohol, gambling, and pork. There are also multiple other principles, such as Emphasis on Social Responsibility, Compliance with Shariah, Risk Diversification, Long-term Investment Focus, and Importance of Information Disclosure.
Sustainability in Islamic Finance: It has three aspects: First is the Economic Aspect. Islamic finance investment emphasizes long-term and sustainable value creation. It links financial activities to real assets through financial tools like Sukuk, ensuring funds flow to legal and beneficial areas and avoiding short-term speculation; Second is the Social Aspect, social responsibility is a key consideration in Islamic finance. Financial institutions are required to focus on the development of social equity, education, health and other fields while pursuing economic benefits, promoting social harmony; and Third is the Environmental Aspect, Green investment in Islamic finance involves investing funds in projects that meet Islamic teachings and environmental protection requirements, such as renewable energy, green buildings, and ecological agriculture, to balance economic growth and environmental protection.
In general, "Islamic Finance and Sustainability" explores how Islamic finance, based on its principles and values, promotes the realisation of sustainable development goals in economic, social and environmental aspects.
The latest research in the field of Islamic Finance and Sustainability mainly has two aspects, Sedco's Prudent Ethical Investment and Research on the Application of Blockchain Technology in Islamic Finance.
Sedco's Prudent Ethical Investment: First is Core Idea. Sedco Capital has proposed "Prudent Ethical Investment" (PEI), which combines responsible investment with Shariah-compliant investment principles. It not only excludes "sin industries" but also integrates Environmental, Social, and Governance (ESG) criteria assessment to enhance the risk-adjusted return of portfolios; and Second is the Investment Process. It includes negative screening, assessment of environmental, social and governance factors, and active ownership. Through this process, Sedco Capital can identify companies with long-term sustainable development potential.
Research on the Application of Blockchain Technology in Islamic Finance: The aim of it is that the research "Blockchain technology and Islamic finance: Empowering small businesses for financial sustainability" aims to explore the potential applications of advanced blockchain technology such as DeFi and NFTs in supporting halal micro, small, and medium enterprises (MSMEs) within the framework of Islamic finance. The research finds that DeFi and NFTs offer significant opportunities for halal MSMEs to access financing more easily, reduce transaction costs, and increase the speed and transparency of financial operations.
Islamic Finance and Sustainability can help address several global issues such as:
Solving Economic Issues: Islamic finance is based on the principle of risk sharing between lenders and borrowers. Different from the debt-based and risk-transfer model of traditional banking, it encourages more cautious investment and lending practices. During economic downturns, Islamic financial institutions will continue to invest in the economy instead of tightening credit, which helps to mitigate the severity of boom-and-bust cycles and promote economic resilience and recovery. Moreover, it requires that all financial transactions must be supported by tangible assets or services, preventing the creation of excessive credit and speculative financial products. This can reduce the likelihood of financial bubbles and maintain the stability of the financial system. Moreover, the profit and loss sharing (PLS) arrangements in Islamic finance allow businesses to have more flexibility to survive challenging times. During economic downturns, financial obligations can be adjusted according to the actual business performance, which is crucial for the continuity of small and medium-sized enterprises (SMEs).
Coping with Social Issues: By prohibiting interest on loans and focusing on profit-sharing investments, Islamic finance provides a viable financial system for those who are excluded from the traditional banking system due to religious reasons or financial constraints, helping to mobilize a larger pool of savings and investments and reduce poverty. Besides, Islamic finance emphasizes social responsibility and requires financial institutions to consider social interests in their operations. It promotes justice, responsibility and solidarity in commercial transactions, clears corruption and contributes to the harmonious development of society. Moreover, It attaches great importance to education, health and food security, and is committed to ensuring the realization of these basic human rights. Islamic financial institutions will invest in relevant social welfare projects to promote the development of the social welfare cause.
Resolving Environmental Issues: Islamic finance encourages investment in environmentally friendly projects through financial tools such as green sukuk. Funds are directed to renewable energy, green buildings, ecological agriculture and other fields, promoting the balance between economic growth and environmental protection. Besides, with the deepening of the concept of sustainable development, Islamic finance requires financial institutions to consider the social, environmental and economic impacts of projects in their investment decisions. This is conducive to coordinating economic development and environmental protection and achieving sustainable development goals.
14 November 2022 , Sultan Sharif Ali Islamic University (UNISSA) through the Faculty of Islamic Economics and Finance (FEKIm) strengthened its network of strategic partners by renewing the signing of a…
Queen Mary University of London, England, United Kingdom
