Exciting developments in Islamic finance after COP28 – a guest blog by Omar Shaikh, Managing Director of the Global Ethical Finance Initiative
Our new online course Faithful Finance starts this week!
The next FCI Interest Group Forum is on March 7 – with the Green Climate Fund
The road ahead for the $4.5 trillion global Islamic finance industry: a guest blog by Omar Shaikh
There are exciting developments taking place in the $4.5 trillion global Islamic finance industry. COP28 shone a spotlight on its potential as a source of capital for sustainable development. We asked Omar Shaikh, Managing Director of the Global Ethical Finance Initiative (GEFI), which ran the largest ever finance-focused campaign for COP28, to give us an overview of the key developments.
By Omar Shaikh, Managing Director of GEFI
The recent COP28 conference marked a significant milestone in the global effort to combat climate change. As the finance world continues to focus on sustainability, Islamic finance is emerging as an untapped pool of capital that aligns faith-based finance with environmental, social, and governance (ESG) principles.
As a global $4.5 trillion industry adhering to the Shari'ah (Islamic law), Islamic finance does not permit receipt and payment of riba (interest), gharar (excessive uncertainty), maysir (gambling), short sales or financing activities that are considered harmful to society.
As such, Islamic financial institutions are uniquely placed to finance the transition to net zero.
Islamic finance – a $500 billion opportunity
COP28 saw a greater focus on Islamic finance than previous COPs with much of the effort being driven by the Islamic Finance Council UK (UKIFC) together with GEFI and Dubai International Financial Centre (DIFC). The UKIFC’s “Unlocking Islamic Finance at COP28”, which formed part of the Path to COP28 campaign (the first, and largest finance-focused campaign for the Dubai Climate Summit), was hosted by DIFC and was the main (and largest!) event focused on Islamic finance, attracting over 200 leaders and practitioners.
At the Summit, the Global Islamic Finance & SDGs Taskforce announced the publication of its Key Outputs Report and the UKIFC launched Tayyib Inspired – a pioneering project seeking to integrate responsible investing and Islamic finance to create a more sustainable, inclusive, and equitable world. This groundbreaking approach presents a $500bn market opportunity.
'As the world transitions towards a cleaner energy future, Islamic finance has an immense opportunity to enable investment consistent with both climate goals and faith-based values.'
– Omar Shaikh, GEFI
Read more of Omar's blog on the FaithInvest website, including how:
Green sukuks (an Islamic financial product similar to a bond in Western finance) could channel investments towards impact-driven assets aligned with ESG goals;
Islamic banks are increasingly incorporating sustainability criteria into their operations and investment decisions.
We're very excited that our new online course begins on Wednesday, led by our Director of Faith-Consistent Investing Mathew Jensen. Faithful Finance: An Introduction to Aligning your Investments with Faith Values is the first live-taught online course aimed at faith-based organisations and is suitable for all faith traditions.
Interest has been high – so much so that we have scheduled the next four-week course, which will take place onTuesdays from 7-28 May 2024. Find out more and register your interest by clicking below.
FaithInvest's quarterly FCI gathering: Thursday 7 March
10.00 EST, 15.00 GMT, 16.00 CET, 17.00 EAT
At our 7th March meeting, we'll go deeper into developing-market climate investing - and a potential path for more involvement from Faiths - with Green Climate Fund (GCF) - the world's largest climate fund.
Green Climate Fund was established by the United Nations, is funded by developed countries, supports developing countries and partners with commercial, non-governmental organizations, developmental, investment and many other institutions to invest in 'on-the-ground' climate mitigation and adaptation projects.
The Green Climate Fund has a new leader, FaithInvest friend Mafalda Duarte, and a revitalized direction, which includes engaging the Faiths more.
At our Forum we'll introduce GCF, cover their extensive investment project activities, and we'll explore ways Faiths can engage. Join us!
FaithInvest posts weekly on topics related to faith-consistent investing. The posts are a valuable source of FCI comment, insights & research. CHECK them out.
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