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Innovation in Islamic Finance: Green Sukuk for SDGs

Innovation in Islamic Finance: Green Sukuk for SDGs

Year Published

2021

Contributing Organizations

Islamic Finance Council (UKIFC)

Type of Resource

Research/Insights Report

Languages

English

Relevant Topics

Core Topic
Islamic Finance
Topic 2
Thematic Bonds

Target Audience

All

Relevant Geography

Middle East and North Africa
Asia & the Pacific
Africa
Innovation in Islamic Finance: Green Sukuk for SDGs

Resource Description

This report examines how green sukuk, Shariah-compliant green bonds, can help close financing gaps for climate action and the SDGs, with lessons from Indonesia’s early issuances.

Why This Matters

Green sukuk provide a Shariah-compliant way to scale sustainable investment and channel capital to climate and SDG priorities.

Key Insights

  • Islamic finance principles naturally align with sustainability goals
  • Green sukuk are expanding rapidly, attracting global ESG investors
  • Indonesia’s sovereign and retail sukuk fund renewable energy, transport, waste, and resilience projects
  • Credibility requires strong frameworks, external reviews, and transparent reporting
  • Barriers include high costs, lack of standardization, and limited ESG expertise, though large growth potential exists

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