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

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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