Islamic finance as a catalyst for financing the sustainable development goals (SDGs)

For over a decade, Deloitte Middle East, Islamic Finance Knowledge Center has been conducting cutting-edge multidisciplinary and collaborative research on the development of alternative Islamic financing instruments, Islamic social innovation and policy and regulatory support required.

In doing so, we profoundly advocate bridging Islamic finance with sustainable finance and social and economic inclusion, and in this article, we highlight yet again the importance of Islamic finance to support the global development targets identified by the UN’s SDGs. The link between Islamic finance and the UN’s SDGs and how this can be transformed into practical action plan and developing policies and green Islamic financing solutions to achieve the SDGs in respective countries. 

The emphasis will be on financing the green transition, and the analysis provides a case for developing Islamic carbon credit markets supported by the Islamic financial industry stakeholders. This represents a key sustainable growth opportunity for members of the OIC marketplace in social, environment and energy projects.

The article discusses the premise of a net zero strategy using Sukuk as a green Islamic financing instrument. Four main areas of practice have been identified to harness the growth of an efficient Islamic credit carbon markets.