At its core, Islamic finance embeds the principles of fairness, equality and ethics, with the aim that Shariah compliant financial services will lead to enhanced social well-being, which will encourage sustainable economic activity.
Juxtaposed against socially responsible investing (SRI), there is very little difference between the objective of Islamic finance and SRI’s concept and aims, and as such it can be argued that Islamic finance too provides the same benefits as the SRI funds available in global markets.
So, can conventional SRI funds then be re-structured into Islamic funds to tap into the large liquid Islamic capital market which widely seeks Shariah compliant asset classes? If so, there is a huge opportunity within the Islamic capital market where established conventional funds can tap to broaden its horizon.
In some markets, the momentum has been steadily building in towards this realization, and as a result the confluence and connectivity of Islamic funds with global SRI funds has been increasing exponentially in recent years.
Therefore, isn’t understanding the scope of SRI within the Islamic and Shariah compliance space is pivotal for finance practitioners?
Come and join the discussion on how Labuan IBFC’s Islamic solutions can assist in further bridging the perceived divide between Islamic finance and SRI investing.