The FINANCIAL — Islamic Finance is set to drive a growing focus on ESG and sustainability in the wider Halal economy, new research* with leading Islamic Finance professionals working across a wide range of sectors shows.
Up to 88% of Islamic Finance professionals believe the growing focus on ESG and sustainability in their industry will mean the wider Halal economy will need to address ESG and sustainability more seriously.
The research was conducted by Maybank Islamic Berhad, the Islamic banking arm of Maybank Group, and IslamicMarkets.com, a leading platform that provides access to expert knowledge and financial opportunities, to support their upcoming forum entitled The Global Connect Forum, with the theme of ‘Driving Sustainable Impact Through Islamic Finance.’
Around 54% of those questioned said Islamic Finance industry will place greater pressure on Halal businesses to focus more on ESG and sustainability while 53% said Halal businesses will realise the need to address ESG and sustainability to meet finance requirements. However more than half (54%) of Islamic Finance professionals say it is becoming increasingly clear that a company’s financial performance is linked to its ESG and sustainability record.
The research found that 25% of Islamic Finance professionals say cooperation between Islamic Finance and Halal businesses has intensified during the pandemic. Around 67% of Islamic Finance professionals questioned said the COVID-19 pandemic had intensified the focus on ESG and sustainability in their organisations which include asset managers, banks, insurers, fintechs and consultancies.
“The COVID-19 pandemic has highlighted that incorporating ESG considerations into business models is crucial if the Halal economy and Islamic Finance are to maintain their strong growth”, Maybank Islamic Berhad Chief Executive Officer Dato’ Mohamed Rafique Merican said.
“Islamic Finance is leading the way on ESG, and sustainability and it is clear that it will help the wider Halal economy to adapt and improve its performance.”
“Both the Halal economy and Islamic finance are outperforming growth projections but there needs to be a greater focus on ESG and sustainability if current growth rates are to be maintained,”Shakeeb Saqlain, CEO of IslamicMarkets added.