Abstract
This research paper examines the application of Maqasid al-Shariah principles in the context of sustainable finance, focusing on the impact of Green Sukuk Allocation in Indonesia. As an Islamic financial instrument, Green Sukuk aims to raise funds for environmentally friendly projects while adhering to shariah principles. This study analyzes the 2023 Green Sukuk Allocation and Impact Report from the Indonesian Ministry of Finance to assess the impact of Green Sukuk in achieving both financial and sustainable development goals. Using a qualitative approach, this paper evaluates how the allocation of green sukuk funds aligns with the objectives of Maqasid al-Shariah, particularly in the preservation of the environment and the promotion of social welfare. The analysis also considers the challenges and opportunities faced in implementing green sukuk as a sustainable financing mechanism. This research finds that the implementation of green sukuk financing in Indonesia aligns with the five essential principles of Maqasid al-Shariah, namely hifz al-deen (preservation of religion), hifz al-nafs (preservation of life), hifz al-aql (preservation of intellect), hifz al-maal (preservation of wealth), and hifz al-nasl (preservation of lineage). Moreover, the implementation of green sukuk financing has also positively impacted multiple sectors in Indonesia. The findings of this study have important implications for policymakers, financial institutions, and investors seeking to promote sustainable development through Islamic finance instruments. The study's insights can inform the design of future green finance policies and strategies, highlighting the role of Islamic finance in achieving both financial and sustainability goals.References
AAOIFI. (2017). Shari’ah Standards. Shari’ah Standard No. (17) “Investment sukūk”
Alam, A., Tri Ratnasari, R., Latifathul Jannah, I., & El Ashfahany, A. (2023). Development and evaluation of Islamic Green Financing: A systematic review of Green Sukuk. Environmental Economics, 14(1), 61–72. https://doi.org/10.21511/ee.14(1).2023.06
Alam, N., Duygun, M., & Ariss, R. T. (2016). Green Sukuk: An innovation in Islamic Capital Markets. Energy and Finance, 167–185. https://doi.org/10.1007/978-3-319-32268-1_10
al-Fāsy, `Allāl. (1993). Maqāshid as Syariah Wa Makarimuha. Dar al-Gharb al-Islami.
al-Khadimi , N. al-D. M. (1998). al-Ijtihad al-Maqâshid Hujjiyatuhu, Dhawabituhu, Majalatuhu (Vol. 1). Wizarah al-Awqaf as al-Syuun al-Islamiyah.
Almutairi, S. (2023). A systematic review on the green sukuk after Paris-agreement. Issues in Economics and Business, 9(1), 1. https://doi.org/10.5296/ieb.v9i1.21110
Al-Raisuni, A. (1999). Al-Fikr al-Maqasidi: Qawa’iduhu wa Fawaiduhu. Dal al-Baida.
Al-Shaybani, M. H. (1997). Kitab al-Kasb. Beirut: Dar al-Bashair Al-Islamiyyah.
Bowen, G. A. (2009). Document analysis as a qualitative research method. Qualitative Research Journal, 9(2), 27–40. https://doi.org/10.3316/qrj0902027
Dresch, A., Lacerda, D.P., Antunes, J.A.V. (2015). Systematic Literature Review. In: Design Science Research. Springer, Cham. https://doi.org/10.1007/978-3-319-07374-3_7
El Amri, M. C., Mohammed, M. O., & Abdi, M. H. (2021). How Green Sukuk Structure Contributes to SDGs? Islamic Wealth and the SDGs, 621–637. https://doi.org/10.1007/978-3-030-65313-2_32
Eldersevi, S., Mohammed, M. O., & El Amri, M. C. (2021). Analysis of global ethical wealth based on Maqasid al-Shari’ah: The case of waqf. Islamic Wealth and the SDGs, 469–484. https://doi.org/10.1007/978-3-030-65313-2_24
El-Gammal, M., & Abozaid, A. (2021). Environmental Protection and Sustainable Development: An Islamic Perspective. In Islamic finance and Circular Economy: Connecting Impact and Value Creation. essay, Springer.
Endri, E., Tahya Hania, B., & Ma’ruf, A. (2022). Corporate Green Sukuk issuance for sustainable financing in Indonesia. Environmental Economics, 13(1), 38–49. https://doi.org/10.21511/ee.13(1).2022.04
Hariyani, H. F., & Kusuma, H. (2020). Green Sukuk-based project on Sustainable Waste Management in Indonesia. Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah, 12(2), 165–178. https://doi.org/10.15408/aiq.v12i2.15129
Hasan, Z. (2006). Sustainable development from an Islamic perspective: Meaning, implications and policy concerns. Journal of King Abdulaziz University-Islamic Economics, 19(1), 3–18. https://doi.org/10.4197/islec.19-1.1
Hassan, M. K., Muneeza, A., & Saraç, M. (2021). Need to Redefine Islamic Finance in the Light of Maqasid Al-Shariah. In Islamic finance and Sustainable Development a sustainable economic framework for Muslim and Non-Muslim countries. essay, Palgrave Macmillan.
Hod Rozita (2016). The Impact of Air Pollution and Haze on Hospital Admission for Cardiovascular and Respiratory Diseases. International Journal of Public Health Research, 6(1).
Ibn Ashur, M. al-Tahir. (2006). Treatise on Maqāṣid al-Shari’ah (M. el-Tahir el-Mesawi, Trans.). International Institute of Islamic Thought.
Khan, Tariqullah. (2019). Reforming Islamic Finance for Achieving Sustainable Development Goals. Journal of King Abdulaziz University Islamic Economics, 32(1), 3–21. https://doi.org/10.4197/islec.32-1.1
Malahayati, M., & Anggraeni, L. (2023). Potential of and challenges to the green sukuk for financing the green economic recovery in Indonesia. Post-Pandemic Green Recovery in ASEAN, 234–257. https://doi.org/10.4324/9781003324386-14
Manzur, I. (1997). Lisan al-Arab (Vol. 11). Dar Sader.
Marleni, N. N., & Raspati, G. S. (2020). A critical review of wastewater resource recovery implementation in Indonesia. Journal of the Civil Engineering Forum, 6(1), 89–102. https://doi.org/10.22146/jcef.52755
Ministry of Finance. (2023). Green Sukuk Allocation and Impact Report. Ministry of Finance. https://www.djppr.kemenkeu.go.id/en/performancereport
Moghul, Umar F., & Safar-Aly, Samir. (2015). Green Sukuk: The Introduction of Islam's Environmental Ethics to Contemporary Islamic Finance. Georgetown International Environmental Law Review (GIELR), Vol. 27, No. 1, Available at SSRN: https://ssrn.com/abstract=2580864
Musari, K. (2021) Green Sukuk, Islamic Green Financing: A Lesson Learned from Indonesia. In Handbook of Research on Climate Change and the Sustainable Financial Sector. New York: IGI G lobal https://doi.org/10.4018/9781799879671.ch001
Musari, K., & Hidayat, S. E. (2023). The Role of Green Sukuk in Maqasid Al-Shariah and SDGs: Evidence from Indonesia. In Islamic finance, Fintech, and the road to sustainability: Reframing the approach in the post-pandemic era. essay, Palgrave Macmillan.
Obaidullah, M. (2018). Managing climate change: The role of islamic finance. IES Journal Article, 26(1), 31–62. https://doi.org/10.2139/ssrn.3303687
Rahman, A., Abu Hanife, M., Ab Halim, A. H., & Markom, R. (2022). The challenges of Green Sukuk policy implementation for achieving sustainable environment. Malaysian Journal of Social Sciences and Humanities (MJSSH), 7(11). https://doi.org/10.47405/mjssh.v7i11.1987
Raworth, K. (2017). Doughnut Economics: Seven Ways to Think Like a 21st-century Economist. Chelsea Green Publishing.
Susanto, J. W., & Sujana, C. M. (2023). Barrier of green building implementation in construction projects in Indonesia. IOP Conference Series: Earth and Environmental Science, 1169(1). https://doi.org/10.1088/1755-1315/1169/1/012018
Ulfah, I. F., Sukmana, R., Laila, N., & Sulaeman, S. (2023). A structured literature review on Green Sukuk (Islamic bonds): Implications for government policy and future studies. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/jiabr-10-2022-0255
Wahab, M. Z. H., &, Naim, A. M. (2020). Sustainable and responsible investment: Concept and the commonalities with Islamic financial institutions. Etikonomi, 19(1), 141–154.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
MBER have CC-BY-SA or an equivalent license as the optimal license for the publication, distribution, use, and reuse of scholarly work.
In developing strategy and setting priorities, MBER recognize that free access is better than priced access, libre access is better than free access, and libre under CC-BY-SA or the equivalent is better than libre under more restrictive open licenses. We should achieve what we can when we can. We should not delay achieving free in order to achieve libre, and we should not stop with free when we can achieve libre.
MBER is licensed under a Creative Commons Attribution 4.0 International License
You are free to:
- Share copy and redistribute the material in any medium or format
- Adapt remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.