Green Sukuk and Islamic ESG Finance: Aligning Shariah Compliance with Global Sustainability Goals (SDGs)
Keywords:
Green Sukuk, Islamic ESG Finance, Maqasid Al-Shariah, Sustainability, Shariah Compliance, Sdgs, Ethical FinanceAbstract
This study explores the intersection of Green Sukuk, Islamic ESG finance, and the United Nations Sustainable Development Goals (SDGs) to understand how Shariah-compliant financial practices align with global sustainability objectives. Using a qualitative exploratory design and interpretivist philosophy, the research draws insights from semi-structured interviews with Shariah scholars, regulators, and practitioners in Malaysia, Indonesia, and the United Arab Emirates—three leading jurisdictions in Islamic sustainable finance. Thematic analysis reveals that maqasid al-shariah (the objectives of Islamic law) provides a moral foundation that naturally complements the SDGs by promoting justice, welfare, and environmental stewardship. Findings highlight that while Green Sukuk have emerged as an effective instrument linking Islamic ethics with sustainable development, their broader impact is constrained by regulatory fragmentation, inconsistent Shariah interpretations, and the absence of standardized ESG frameworks. Respondents emphasized the need for a unified Islamic ESG taxonomy that integrates faith-based principles with measurable sustainability metrics. The study concludes that Islamic finance holds significant potential to advance global sustainability when institutionalized through harmonized standards, transparent impact assessment, and strong Shariah governance. By embedding maqasid al-shariah within ESG and SDG frameworks, Islamic finance can transition from compliance-oriented operations to a transformative model of ethical and sustainable development.
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