ESG and sustainability are gaining traction across Islamic Finance, new research has revealed.
The research conducted by Maybank Islamic Berhad and IslamicMarkets found that 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.
More than half (54%) of Islamic Finance professionals believe the industry will place greater pressure on Halal businesses to focus more on ESG and sustainability, while 53% believe Halal businesses will realise the need to address ESG to meet finance requirements, with a similar proportion (54%) noting that it is becoming increasingly clear that a company’s financial performance is linked to its ESG and sustainability record.
The pandemic also saw cooperation between between Islamic Finance and Halal businesses intensify, the research showed, with around two thirds (67%) of professionals stating that Covid-19 had intensified the focus on ESG and sustainability in their organisations.
Mohamed Rafique Merican, chief executive officer of Maybank Islamic, said: “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.
“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.
Shakeeb Saqlain, CEO of IslamicMarkets, added: “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.”
