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Home / Insights

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Halal Industry

Tunisia Hosted the Islamic Organization for Food Security 5th General Assembly – Appointed One-Year Presidency in IOFS

18 Oct 2022
Insight

TUNIS – Tunisia hosted the 5th General Assembly of the Islamic Organization for Food Security (IOFS) held online on October 10-11, 2022, in Tunis, Republic of Tunisia, on the theme “Partnership for Sustainable Food Security: Africa within OIC Geography
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Islamic Finance
Saudi Arabia eyes global Islamic finance hub status through new index
04 Aug 2022
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Islamic Finance
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Embedded Islamic finance: Back to the roots to reshape the future
28 Jul 2022
Insight

Islamic Finance
Sponsored
Collaboration between Islamic finance incumbents and Islamic fintech challengers
28 Jul 2022
Insight

Islamic Finance
Lack of good practice solutions hinders development of Islamic social finance
20 Jul 2022
Insight

Islamic Lifestyle
Fashionable and designer hijab styles around the world
18 Jul 2022
Insight

Islamic Finance
International standards and tribunals being developed to solve global Islamic finance disputes
12 Jul 2022
Insight


All Other Insights
Halal Industry
Tunisia Hosted the Islamic Organization for Food Security 5th General Assembly – Appointed One-Year Presidency in IOFS
TUNIS – Tunisia hosted the 5th General Assembly of the Islamic Organization for Food Security (IOFS) held online on October 10-11, 2022, in Tunis, Republic of Tunisia, on the theme “Partnership for Sustainable Food Security: Africa within OIC Geography
18 Oct 2022
Insight
Islamic Finance
Saudi Arabia eyes global Islamic finance hub status through new index

Newly launched Tadawul Islamic index adds to growing index universe as kingdom eyes Islamic finance hub status.

 

London: Saudi Arabia is working to become a regional and global hub for Islamic finance. To achieve this, the kingdom is keen to develop the sector as well as attract investment from local and international Islamic investors and funds.

In response to growing demand for Sharia-compliant tools and investment services, Tadawul, the country’s stock exchange, launched its first ever Islamic index last month.

The TASI Islamic Index will track the performance of Sharia-compliant companies listed on the Saudi Exchange. The TASI Islamic Index is constructed from the Tadawul All Share Index “TASI” and will be screened for Sharia compliance, which are approved by the exchange’s Sharia Advisory Committee. The committee will be responsible for overseeing and approving the list of Sharia-compliant listed companies on a periodic basis.

The proliferation of Sharia indices makes sense, according to Redha Al Ansari, Head of Islamic Finance Research, Data & Analytics at the London Stock Exchange Group.

“In the past two or three years so many retail and institutional investors started to invest,” he said. “And with Saudi being one of the largest Islamic finance markets globally, you need to actually provide more investment opportunities for Islamic financial institutions beyond sukuk and real estate.”

Companies within the index are screened by an independent screening provider under the supervision of Tadawul’s recently formed Sharia Advisory Committee that include representatives from leading financial institutions.

Tadawul did not respond to a request by Salaam Gateway for further information about the methodology that will be adopted for the index.

The index will also act as a tool for investors and other stakeholders to guide and inform decisions when analysing investments. It will also help asset managers benchmark the performance of their Sharia-compliant portfolios.

One Riyadh-based portfolio manager said that the new Islamic index is a natural step given that a large proportion of companies on Tadawul are already inherently Sharia compliant.

“Most money managers were using the IdealRatings index for performance evaluation, now they can be measured vs a published index which most (retail) investors can track,” he said, requesting anonymity.

Monem Salam, executive vice president/portfolio manager at US-based Saturna Capital, said that any step that is taken towards Sharia compliance benefits the industry.

“It is still a bit unclear as to which methodology they will be using,” he said. “They mention a panel of scholars from various institutions. My experience from Saudi Arabia is that the institutions have varying guidelines, so it will be interesting to see what consensus they come up with. However, coming up with guidelines can be very beneficial for individual/retail investors and I applaud this move.”

But a Dubai-based multi-asset portfolio manager said that whilst the TASI Islamic index is positive it is not a game changer given the small number of global funds with a Sharia-only mandate as well as the small size of the Saudi stock exchange in comparison to other equity markets worldwide.

In addition to benchmarking, the new index can also serve as a base for financial instruments like derivatives and Exchange Traded Funds (ETFs).

Tariq Al Rifai, CEO of the Quorum Centre for Strategic Studies, a London-based think tank, said that the Saudis establishing their own benchmarks gives them a strategic advantage, since the country has the largest market cap in the Middle East and North Africa (MENA) region.

“This is because index providers may not know your objectives for a particular benchmark and more importantly, you own the data. That’s where the money is,” he said.

Adding to Islamic index universe

The TASI Islamic Index will join a growing number of Islamic indices that track regional and global equities as well as other asset classes. Providers like S&P, IdealRatings, MSCI and FTSE offer their own Sharia-compliant indices.

The most notable global Islamic indices include Dow Jones Islamic Market index and the MSCI World Islamic Index. In addition, providers also offer regional indices such as the Dow Jones Islamic Market GCC index. FTSE also offers Sharia indices in other jurisdictions like Malaysia and Taiwan.

“It is important to have Sharia-compliant indices as there is a big, growing market for Sharia-compliant investments and investors would need credible benchmarks to compare the returns,” explained Faisal Hasan, CIO and Head of Asset Management at Dubai-based Al Mal Capital.

“This is a positive move that help in measuring the performance for Sharia-compliant investments. I’m sure there will be more Sharia indices that will be coming in future as the market become more diverse and deeper,” he added.

Becoming an Islamic finance hub

The launch of the new TASI Islamic index is part of a wider drive by Riyadh to position the kingdom as the Islamic finance capital of the world by 2030.

Bashar Al Natoor, Global Head of Islamic finance at Fitch Ratings said that launch of the TASI Islamic index is not a surprise and was set out as one of the kingdom’s Financial Sector Development Programme (FSDP) initiatives relating to Islamic finance, part of its Vision 2030.

“This is part of the international positioning goals that aims to enhance Saudi Arabia’s international position as the leader in Islamic finance, along with other strategic goals and initiatives that aim to enhance and develop the Islamic finance industry’s governance, educational and research institutions to support growth of the sector,” he said.

The launch of the TASI index follows the formation of Tadawul’s Sharia Advisory Committee in April. The Committee consists of representatives from the country’s largest financial institutions to ensure independency and transparency.

Fitch’s Al Natoor reiterated that the progression and development of the kingdom’s Islamic finance industry is part of a wider objective of economic diversification.

“Beyond Islamic finance the FSDP aims to develop a diversified and effective financial sector to support the development of the national economy, diversify its sources of income, and stimulate savings, finances and investments,” he said.

© SalaamGateway.com 2022. All Rights Reserved

04 Aug 2022
Insight
Islamic Finance
Embedded Islamic finance: Back to the roots to reshape the future

Dr. Moutaz Abojeib is Director of Operations at IFAAS, and Dr. Shaher Abbas is the CEO of IFIN.

 

The fourth industrial revolution is changing the world around us at a faster pace than ever experienced before. While the COVID-19 pandemic pushed the boards of financial institutions to accelerate the digitalization agenda, the management are still struggling in their adoption and implementation. With the constantly increasing number of digital solutions and Fintechs available in the market, the decision on which solution or Fintech to go with becomes more difficult.

One of the newly emerging solutions is embedded finance. Embedded finance is defined as a seamless integration of financial services by businesses. The primary purpose of embedded finance is to streamline customer experiences by eliminating extra steps to obtain financing in which the customer can get the product and the financial service at one stop. While embedded finance is a new concept, it is indeed not a strange notion for Islamic economics. In fact, one could claim that embedded finance is a core philosophy of the Islamic economics and transactions theory.

It is well established that Islamic economics does not promote separating financing process from real economy business transactions. While interest-based conventional finance industry concentrates on making money out of lending money; hence, disconnecting the financing from real economy trading/manufacturing process, Sharia does not allow charging fees on pure lending (Qard). Shariah rather promotes risk-sharing and allows money-making out of commercial and investment transactions only. In fact, the whole modern Islamic banking industry has been designed to bring back the connection between financing and businesses by using trading and investment contracts, such as Murabaha and Mudaraba. These Islamic financial principles create a bridge between finance and business which is the core philosophy behind embedded finance. However, it is important to note here that the Islamic finance industry in practice did not succeed so far in building such bridge due to the extensive use of Tawarruq that works in reality to disconnect the Islamic finance from the real economy.

Understanding the importance of embedded finance, IFIN (the first of its kind Sharia- compliant, cloud-based Fintech solution) has been designed to be the bridge connecting all types of Islamic Financial Institutions with all types of retailers (whether in physical stores or online and whether offering goods or services) allowing customers to submit their finance applications and get them approved instantly. The whole financing process including signing the required contracts can be completed within few minutes. IFIN is a game-changing innovative solution that is geared to redefine the way Islamic finance is being done, making it more efficient and inclusive. With such digital solution, Islamic finance becomes more accessible to all segments of the community at any place and any time.

Through full digitalization, IFIN does not only help Islamic financial institutions reduce transactional cost and operational risk (as no staff intervention is required) but also helps them offer unprecedented customer experience and widen their outreach to new areas and communities that they would not be able usually to reach using their normal distribution channels.

28 Jul 2022
Insight
Islamic Finance
Collaboration between Islamic finance incumbents and Islamic fintech challengers

Ashar Nazim is the CEO of Aion Digital.

 

Presently, financial inclusion is a primary objective of the banking sector. Naturally, Islamic finance is continuously increasing in global relevance as it pertains to a defining demographic of 1.8 billion Muslims worldwide and a broader global ethical finance community (World Bank, 2020). It is important to consider that Fintechs have created a space for enablement and innovation which is disrupting the banking industry, and on the other hand incumbents are hampered by siloed processes and legacy systems. Hence, collaboration is the key to mutually benefit both parties and achieve the intersection of a Venn diagram.

Islamic Fintechs are largely targeting a new customer base that is the younger Muslim population around the world that have been highlighted as a critical determinant of Islamic Fintech prospects as they account for 29% of the global population that are under 30 (Religion Information Data Explorer | GRF, 2022) (United Nations - Population Division, 2019). This younger demographic is highly technologically adept, due to their high-level access and usage of mobile and internet services in comparison to the world average. Further, Incumbents powered by Fintechs have also enabled people who are unbanked or underbanked. Temenos is an excellent illustration of this, as they deliver 8 million new users to the STCpay clientele in the Saudi region (Temenos, 2022).

Innovation is a key emphasis for Islamic Fintechs. A major prospect is the facilitation of Zakat (obligatory donation) and Sadaqah (voluntary donation) which can accumulate $200 Bn to 1 trillion globally, and this could play a tremendous role to alleviate global poverty (World Bank, 2020). Last Ramadan, Saudi’s national charity foundation ‘Ehsan’ generated approximately $493 million in the span of a month via 24 million voluntary donations. Ehsan’s donations were made exclusively through digital channels (ArabNews, 2022).

Fintechs must tackle a complex set of requirements to guarantee compliance with Shariah law. Interest, or riba, is not tolerated. Investments in the stocks of companies benefitting from alcohol, guns, cigarettes, and gambling are also unacceptable. For instance, ‘Wahed’ is an Islamic Fintech that offers Halal investing options to 200,000 clients globally. Currently, they are also partnering with other Fintechs such as ‘Niyah’ to promote their investment pathways. Considering, Ethical and Sustainable investing is a by-product of the Shariah law which creates the principles of Islamic Fintechs, it is garnering interest from Western societies that are eager to join into this endeavour.

The future demands innovation and Incumbents know that in order to stay ahead of the curve and provide the best banking services to customers, they need to select the right vendors and partners. It is impossible for them to innovate on every front and partnering with Fintechs is the only quick way to provide a new feature or service without reinventing the wheel which costs time and money.

28 Jul 2022
Insight
Islamic Finance
Lack of good practice solutions hinders development of Islamic social finance

The potential of zakat is not being maximised in the fight against poverty.

 

Tokyo: The lack of a common international Islamic financial regulatory system is hindering the development of Islamic social finance instruments, causing a dearth of good practice solutions that could effectively fight poverty, say experts.

In the February 2021 issue of the International Sharia Research Academy (ISRA) International Journal of Islamic Finance, Abdulsalam Ahmed Sawmar and his co-authors say the key element of Muslim charity, zakat (obligatory charity), has historically “been an integral part of the Islamic economic system because of its sizable impact in achieving social harmony and preserving decent living standard for the needy segments of Muslim communities”.

However, the potential of zakat is not being maximised and its management faces challenges including various regulatory frameworks in different Muslim countries, the paper warned.

One impact was “a significant gap” between the estimated potential of zakat proceeds and its collection through formal institutions.

UK-based international aid agency Islamic Relief is one group trying to create a common good practice in Islamic social finance. It offers a definition for Islamic social finance, saying the sector aims to improve social justice through wealth distribution and fair financial dealings.

It bans problematic practices such as gharar (uncertainty, deception and risk), while promoting philanthropy that includes zakat, sadaqah (voluntary charity) and waqf (endowment).

The UK’s National Zakat Foundation, another body laying down advice on Islamic social finance, stressed how zakat, one of the five pillars of Islam, requires Muslims to give 2.5% of their qualifying wealth (money and property) annually.

The Zakat Foundation of America has been offering guidance in the USA, outlining eight categories of people eligible to receive zakat-based assistance based on the Quran. The non-profit organisation includes the poor, debt-ridden and the displaced among its recipients.

It also promotes waqf or hubous, noting how it typically involves donating a building, plot of land or other asset for Muslim or charitable purposes to a religious, educational or charitable cause.

The Islamic Development Bank states the annual global zakat contributions amounts to $500 billion, but in 2019 only one third of the then-33-strong membership of global advocacy platform World Zakat and Waqf Forum (WZWF) (formerly World Zakat Forum) had laws on zakat, potentially hindering its development according to the WZWF.

National governments and international organisations are trying to establish the extent of the problem and offer solutions to increase zakat collections.

In Indonesia, the world’s largest national Muslim population, the zakat collected is just 0.03% of gross domestic product (GDP) against a potential 1.59%, according to the 2019 International Sharia Scholars Forum’s Regulatory Framework of Islamic Social Finance.

Taking into account the latest World Bank economic statistics on Indonesia, these sums are large – $3.57 billion collected against the $186 billion potential. However, the framework also states Indonesia’s zakat collective collection has increased more than 31 times in the past decade.

Greget Kalla Buana, Islamic finance specialist of the United Nations Development Programme (UNDP), told Salaam Gateway Indonesia offers “the most recent example of regulatory reforms in zakat management,” including the government’s creation of a Badan Amis Zakat Nasional, a public agency whose sole objective is zakat management.

In Malaysia, Singapore and Brunei, state-created majlis (entities) are solely responsible for the collection and distribution of zakat, while Pakistan operates a dual system whereby zakat is paid to the state for some wealth and income types and to the state and private zakat bodies for others, said Buana.

Meanwhile, despite being home to more than 200 million Muslims, India does not have a formal institutional or regulatory framework for zakat management. Buana says the government does not seek to intervene as zakat is entirely voluntary and collected by religious schools and institutions.

With such disparity of frameworks, Buana said the Zakat Core Principles, launched in 2016 by Bank Indonesia, Badan Amil Zakat Indonesia (Indonesia’s National Zakat Agency), the Islamic Research and Training Institute of Islamic Development Bank and countries participating in an international working group, was a positive step.

He said they “help in effective operation and supervision” of zakat, but added there was an additional need for “detailed technical guidance that aligns with each country’s local jurisdiction, rules and regulations”.

Globally, WZWF works “to address the lack of a standard international system for cross-border services and financial transactions in Islamic Social Finance,” said Buana, adding it carries out awareness-raising of instruments, such as zakat and waqf.

It also responds to the need for international consolidation in the practice of zakat and waqf, including the possibility of any cross-country collaboration, south-south cooperation and business-to-business partnerships.

A three-year memorandum of understanding signed by the WZWF and the UNDP, in November 2019, intends to help national and international partners “leverage and align” Muslim philanthropy, particularly the zakat, with the UN’s sustainable development goals (SDGs). Under the pact, both bodies promised to promote zakat’s potential to tackle goals one, two and 10, namely poverty, hunger and inequality.

A 2021 Global Islamic Finance Report by Cambridge Institute of Islamic Finance and Ajman University Centre for Excellence in Islamic Finance also noted a link between Islamic social finance and “the SDGs, climate remediation and circular economy,” pointing out zakat could help fund important environmental initiatives and progress.

Still, with such traditional Islamic social finance practices already established as a pillar of Islam, the 2019 International Sharia Scholars Forum suggested compliance incentives for zakat (such as tax incentives). A proper enforcement of penalties for non-compliance in jurisdictions where Zakat is compulsory could be another solution to improving regulatory systems.

Other operational improvements, including better zakat institution governance, have been advised.

“Greater public trust, transparent and effective governance and openness towards the formal zakat institution’s performance are critical for zakat to achieve its full potential,” said Buana in a 2020 Global Islamic Finance Report from Cambridge International Finance Advisory with its Cambridge Institute of Islamic Finance.

While significant work is required to develop a global Islamic social finance model, the fact serious experienced minds are debating the issue may yet yield fruit.

© SalaamGateway.com 2022. All Rights Reserved

20 Jul 2022
Insight
Islamic Lifestyle
Fashionable and designer hijab styles around the world

Social media fashion influencers credited with changing views on headgear.

 

Dhaka; Selangor, Malaysia; Tunis; Lagos; and Dubai: There was a time when hijabs were simply religious garb for Muslim women who covered their head and chest for religious observance, but hijab design has become increasingly sophisticated as wearers demand elegance while expressing their religious identity.

In Bangladesh online fashion influencers have been particularly influential since the mid-2010s, promoting different hijab trends and styles online. Local entrepreneurs are increasingly producing and selling hijabs online, especially via Facebook with a good example being Facebook trader Islamic Apparel BD, by Fatima & Aisha.

Bangladeshi hijab trends vary by age, marital status and socioeconomic status.

“Teenagers and young girls prefer wearing an inner cap only of black or beige while rural young girls prefer shimmery caps. They carry it with western dress – tops and pants – or salwar kameez (traditional dress),” said Mysha Sanzida, owner of Glam Addiction by Mysha and a Facebook influencer.

Turban-style under-caps with tieback or crisscross under-caps of black, white or beige will be key future trends, predicted Sanzida. She recalled there were fewer hijab options four or five years ago with Bangladesh women wearing ready-to-wear Malaysian, Iranian or Saudi Arabian hijabs.

“Since local entrepreneurs produce and promote them with a variety of styles, the price has fallen. Foreign ones now cost $5 while you will get a local one for $3 to $4.”

Sanzida said Bangladesh urban girls prefer single-colour hijabs as they like to play with colour contrasts with different outfits. This includes pairing a light-coloured dress with a brightly coloured hijab.

There are also differences in party hijab styles.

“Mid-age and senior women wear hijabs embellished with stonework design motifs and gorgeous colourful hijabs matching with saris, while young teens prefer single-coloured ones.”

Unmarried girls prefer single-coloured georgette crepe, satin and silk hijabs, while married women prefer cotton, silk, shimmery cotton or silk and georgette, she said.

Teens and young 20-somethings pair jeans, tops and kamiz with georgette, pleated and cotton. “Women outside (the capital) Dhaka prefer printed, embellished and elaborate designed hijabs that may even be shimmery or loud. With saris, gowns and party wear, they prefer silk, shimmery cotton and satin,” said Sanzida.

 

Mysha, a Bangladeshi influencer, wearing a stylish hijab (Mysha Sanzida).

 

Dress sense takes centre stage in Malaysia

A similar combination of style and religiosity can be seen in Malaysia, a country where 61% of its 32.6 million people are Muslim. Hijab trends are a form of self-expression with wearers increasingly showcasing their creativity while adhering to the expected Islamic guidelines.

When 25-year-old Kuala Lumpur hijabista Nadirah Naim Abdol Rahim purchases hijabs, it is never the brand nor price, but the material that counts. She wants fabric that is not too thick or see-through.

Hijabistas are Muslim women who dress stylishly while conforming to the Islamic modesty codes. While Rahim typically wears black, coloured hijabs also occupy her wardrobe.

“My style of hijab has always been the same, so I don’t usually purchase my hijabs unless it is a limited edition or matches my outfit for a special occasion. Buying anything from e-commerce sites is fine and I usually purchase chiffon or cotton which drapes beautifully and the material is suitable for our Malaysian weather,” she told Salaam Gateway.

Rahim owns hijabs priced from $1 to $100.

A consultant from a known Malaysian hijab brand selling across the capital Kuala Lumpur told Salaam Gateway hijab trends have evolved. While being influenced by western fashion houses, through adopting bolder colours and a wider selection of designs, Malaysia has developed its taste for classic headscarves and clothing.

He said Malaysian clients are likely to spend more on the brand if they like a specific design and the service received at the stores. He was speaking in his personal capacity and requested anonymity.

“If they like the service we provide, they can be persuaded to buy more,” he said.

Some popular Malaysian hijab brands like Lilit, dUCk and Siti Khadijah have store fronts in major shopping malls including the high-end stores KLCC and Pavilion Kuala Lumpur.

The consultant, with more than 10 years of hijab industry experience, said the country’s main trend, Keringkam sulam, has penetrated the market over the past three years. It is handmade embroidery on delicate fabrics usually sewn on to lighter fabrics.

He said Malaysian brands mostly outsource fabrics from Chinese manufacturers in Guangzhou and Yiwu.

“Hijab brands are now not afraid to experiment with their fabric and colour choices, given brands can have up to 20 choices of style and fabrics, while one style can have up to 30 or 40 colour ranges,” he added.

 

Kuala Lumpur hijabista Nadirah Naim Abdol Rahim (Nadirah Naim Abdol Rahim).

 

Hijab consumers in Malaysia are not prone to scrimp when buying high quality scarves. Urban and suburban consumers constantly look for high-end hijab brands, preferring neutral colours such as earthy and pastel tones in sizes spanning 40, 45, 48 and 50 inches, said the consultant.

Consumers from smaller villages and towns “choose bolder colours and... older customers prefer longer and wider scarves,” he noted.

Tunisian women pair their hijab with cosmetic choices

In Tunisia hijab-wear is often paired with colour cosmetics choices, said Malek Ajimi, a Tunis-based hijab stylist.

“Our clients choose the style they would love to use for both their hijab and make-up,” said Ajimi. She has created her own hijab brand and works with beauty salons to provide paired hijab and make-up styling, branding her products as Malek Hijabstylist. Most customers are Tunisian women preparing for engagement parties, weddings and other official ceremonies.

She told Salaam Gateway she was providing a new service and had been working in the domain for six years. Among the new trends she has created are hijabs and accessories such as decorative hijab pins.

“The trendiest hijab style today is the turban that is heavily demanded by Tunisians,” she said, adding this meshes with daily and simple make-up for work or for official occasions.

It is considered a new way of hijab wear, without a veil and not covering necks and chests as do traditional lines. It is also considered modern and practical for daily use, especially for working women seeking a more modern look, said Ajimi.

“The message women send when wearing a turban hijab with simple make-up is they can face daily challenges and hijabs never stand between them and success,” she said.

Turkish-style hijabs are also popular in Tunisia due to the famous Turkish television series Harim Al Soltan (known in Turkey as Muhteşem Yüzyıl) and widely watched in Tunisia. This style, involving a scarf wrapped around the head, is particularly popular at weddings and engagement parties, said Ajimi.

 

Tunisian hijab stylist Malek Ajmi (on the right) with a client (left) after styling her hijab (Malek Ajmi).

 

Gulf region a melting of fashion, expression and styles

As a cultural melting pot, the Gulf region also has a diverse mix of modest fashion and hijab styles. For Nada Nader, a Jordanian woman born and raised in the United Arab Emirates (UAE), living in the region has allowed her to embrace a fashion-forward lifestyle including hijabs.

“I like that the Gulf region is multicultural. Women here maintain their traditions by being modest yet with a trendy, modern twist,” she said.

An engineer, Nader recently obtained her master’s degree and is a modest fashion and beauty blogger. With almost 263,000 Instagram followers, the 32-year-old Dubai-based influencer has a large following for her hijab advice.

As for head gear, she said turbans and headscarves with back ties “are still in this season”. She noted, “Women like wearing them as they’re light and practical, especially for day outings, gym or outdoor activities; they give that young vibrant look”.

Matching fitted hijab and headscarf colours with abayas, the long-flowing garment that is especially popular in the Gulf, has been “trending for some time”. However, if women are pairing hijabs with abayas, she recommends being “careful with the colour by avoiding very bright and vivid tones”, given this is a full body and loose garment.

Colourful and printed headscarves worn as hijabs are also trending this season, according to Nada.

“If you’re not a big fan of colourful scarves, it’s better stick to neutrals like white, black, grey and beige. You can never go wrong with those colours, whether your outfit is colourful, stripy or monochromatic.”

Given the region’s weather, she often opts for light and bright fabrics, especially in summer.

“I prefer chiffon for the hijab. It’s light, comfortable and flowy and gives a neat and elegant look,” said Nada.

 

Nigerian hijab elegance - part of the collection of retailer Mariam Trish (Mariam Trish).

 

Nigerian women integrating style and fashion

Nigeria, where half the population is Muslim women, is also witnessing a move towards integrating hijabs with style and fashion.

“Sisters are now getting covered and chic at the same time. More entrepreneurs (have entered) the business of selling modest wear and accessories because the market has increased,” Mariam Trish, a Muslim who runs her online store on Instagram and retails halal wear in Ilorin, central Nigerian, told Salaam Gateway.

Nigerian Muslim women combine hijabs with western wear (leather jackets and trousers), traditional Muslim abayas and traditional Nigerian clothes. Some women prefer dark colours, while others play with colours.

In terms of hijab sizes, Trish said women also embrace variety, irrespective of region or marital status. “Some sisters are not married and they wear only maxi sizes, while some married women will go for small sizes,” Trish noted.

Turbans, long flowing traditional khimars and looser scarf-based shailah hijabs are common across Nigeria, with the turban style enjoying more popularity among the younger population, Adesegun Aminat, a Lagos-based retailer of fashion accessories for women, told Salaam Gateway.

“The turban has to be the most common type, especially among young ladies these days, when they use the scarf to wrap their heads and doesn’t necessarily have to cover their shoulders. I feel that is the most comfortable one among the three,” said Aminat, a Muslim who runs her online shop via Instagram.

She said hijab trends in the more Christian-based southern Nigeria also differ from those in the majority-Muslim north. Northern women hardly wear scarves; most times they wear the khimar.

However, southern women were less conservative when it came to hijabs.

“Sometimes they just want to be convenient with what they wear. For someone like me, I will hardly ever put on a khimar – the only time I put it on is when I need to pray.”

Nigerian hijabs are both made domestically and imported from Turkey, Bangladesh, Malaysia, Egypt, India and the UAE, said Aminat. With the market and industry becoming increasingly international, diversity is likely to deepen in all Muslim fashion markets.

 

Part of the hijab collection of retailer Mariam Trish (Mariam Trish).

 

© SalaamGateway.com 2022. All Rights Reserved

18 Jul 2022
Insight
Islamic Finance
International standards and tribunals being developed to solve global Islamic finance disputes

Shifts in political structures, widely varying legislation and jurisprudence, and demands to straddle two legal obligations causing significant complications.

 

Dubai, Jakarta and Ottawa: International legal arbitration systems and judicial standards are emerging to solve complex Islamic finance disputes, while national judicial and informal dispute resolution systems continue developing in civil and religious law institutions.

Informal dispute resolution processes can resolve disagreements without recourse to damage payments and potentially without harming valuable reputations, while avoiding litigation can pay dividends in Islamic finance.

Islamic financial services developers face jurisprudential complexities given their simultaneous grounding in traditional commercial civil law and in Sharia law for which different courts may apply.

Muslim-majority countries also have widely varying legislation and jurisprudence impacting Islamic finance with laws and precedents spanning the traditions of Arab monarchies and former French, UK and Dutch colonies.

Their legislation, judicial and political systems have dramatically changed over the past 60 years, resulting in profound difficulties in solving Islamic finance disputes, especially those with an international component.

Building international standards

Aware this can hinder the global development of Islamic finance, there is a move to build international standards and create transnational dispute resolution systems. While there is no globally dominant Islamic finance international tribunal, expert minds have been assessing the possibilities – looking to codify laws governing Islamic finance to formulate a global body of law.

One key issue is developing common principles for dispute resolution. The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has developed more than 100 standards on Sharia law, accounting, auditing, ethics and governance issues for international Islamic finance.

It works with the central banks and regulatory authorities, financial institutions, accounting, auditing and legal firms from more than 45 countries. A recent development is a Sharia standard on gold trading that categorises the metal and explains Sharia parameters for its trading and Sharia rulings for using gold-based financial products in Islamic finance institutions.

Its accounting standards include those on recording sukuk (Islamic bonds) investments and financial reporting for zakat charitable donations.

One solution floated by Gordon Blanke, founding partner Blanke Arbitration LLC, an arbitration specialist operating from London, Paris, Dubai and further afield focused on international commercial and investment arbitration, is developing semi-secular arbitration systems.

These can potentially combine civil and Sharia law rather than “settling for one or the other option, devoutly Sharia or entirely secular” that can be the initial hurdle for arbitration. Writing in Arbitration: The International Journal of Arbitration, Mediation and Dispute Management, he said tribunals need banking and finance and, if a three-member panel, “it might be sufficient only for the chairperson to have Islamic finance experience or expertise”.

Solid examples for dispute resolutions emerging from the UAE

The UAE is leading the way in developing dispute resolution systems and jurisprudence. Here, Islamic finance disputes can be resolved through litigation, arbitration or other alternative processes. Mediation (wasata) and arbitration (tahkim) are deeply rooted in the Islamic culture that values reconciliation (sulh) and a discreet settlement of conflicts, noted Antonin Sobek, counsel at the Dubai International Arbitration Centre (DIAC) and dispute resolution lecturer at the Paris-based Sciences Po University.

Last year Dubai issued a decree to consolidate all local arbitration centres under a revamped DIAC with Sobek indicating the centre is exploring opportunities to become the parties’ choice for Islamic finance dispute resolution.

He says in consultation with major global Islamic finance industry players, the DIAC can design sector-specific services including dedicated dispute resolution rules. It can also establish a list of arbitrator experts in Islamic law, banking and finance.

This development could be important given the UAE does not operate Sharia courts for Islamic finance disputes. Sobek says commercial and finance disputes are currently resolved by the civil courts, but there is potential for establishing specialised Islamic finance courts.

“Such courts could ensure Sharia compliance and contribute to developing consistent approaches to Islamic finance, thereby bolstering the attractiveness of the Islamic finance sector,” he says.

Industry not fully behind arbitration

However, the Islamic finance industry has not fully embraced arbitration.

“Islamic financial institutions may be reluctant to have their disputes resolved by private arbitrators in accordance with Sharia law. They may also be unfamiliar with the advantages of arbitration and the services available to deliver a Sharia-compliant dispute resolution process,” Sobek told Salaam Gateway.

The rapid growth of the global Islamic finance market has been accompanied by an increasing sophistication and proliferation of Islamic finance offerings. These factors inevitably create potential for future domestic and cross-border disputes between financial institutions and between these institutions and their clients and third parties.

Such concerns may have inspired the launch in 2005 of the Dubai-headquartered International Islamic Centre for Reconciliation and Arbitration to assist in resolving, through reconciliation or arbitration, disputes arising from the Islamic finance industry.

Parties to IICRA-administered proceedings are mainly from the Gulf Cooperation Council (GCC) countries and Malaysia, although Sobek noted claims that the “IICRA is yet to achieve widespread acceptance in the Islamic finance community”.

“In the absence of casework statistics, IICRCA’s popularity and international outreach remain uncertain,” he said.

Another proposal anticipates disputes resolved via dedicated rules and experienced Sharia scholars

Another option on the table is establishing a Dubai World Islamic Finance Arbitration Centre (DWIFAC) specialised in settling Islamic finance disputes; equipped with a dedicated set of arbitration rules and staffed by experienced Sharia scholars.

First proposed in 2013 by Camille Paldi, CEO of the Franco-American Alliance for Islamic Finance, the institution would be assisted by a jurisprudence office entrusted with developing a unified Islamic banking law.

While the centre has yet to be established, Sobek believes this proposal may have “nourished the debate about the need to design Sharia-compliant dispute resolution processes and harmonise Islamic finance standards and practices”.

The discussions led to a tangible initiative in May 2020 to build a unified global legal framework for Islamic finance. Announced by the UAE ministry of finance in partnership with the Islamic Development Bank and the now-defunct Dubai Islamic Economy Development Centre (DIEDC), the project aims to adopt an international treaty or global Islamic finance code.

Ultimately, it will expand the global reach of Islamic finance by integrating local differences in Islamic finance standards, practices and product offerings. A steering committee held its first meeting in November 2020 with participation from multiple global Islamic finance bodies.

More talks on the cards

Sobek says while dissolving the DIEDC in 2021 and transferring its duties, assets, rights and obligations to Dubai’s department of economic development may have slowed down progress, more talks will be staged.

He added a global Islamic finance code is currently being drafted in consultation with international strategic partners and with due regard to the AAOIFI’s non-binding Sharia standards. He expects arbitration and mediation to progressively gain traction as a mechanism for resolving Islamic finance disputes, especially as they provide significant advantages compared to litigation.

For instance, the UAE announced in March it would join the Singapore Convention on Mediation that provides its signatories from 55 countries with a mechanism for enforcing settlement agreements in other jurisdictions.

This might boost Islamic arbitration worldwide including in Indonesia where Amran Suadi, chair of the religious chamber at Indonesia’s Supreme Court, notes disputes involving Islamic finance are usually settled in religious courts for litigious cases and Sharia arbitration bodies plus the country’s Financial Services Sector Alternative Dispute Settlement Agency for non-litigious disputes.

The Supreme Court oversees the country’s regular and religious courts.

Amran said Islamic finance disputes handled by the religious courts had steadily increased from 229 in 2017 to 562 in 2020. Cases were becoming increasingly varied from simple ones involving sales and profit-sharing contracts to more complex subrogation and novation issues.

The country has more than 1,300 judges certified to handle Sharia finance cases, some trained in Saudi Arabia and Bahrain. Under Supreme Court rules, a dispute involving money less than $34,300 must be settled in 25 days.

“Thank God many disputes involving Sharia banks and customers are now settled through mediation. They don’t have to be decided by courts and that’s better,” he said.

Indonesia boosting its judges’ capacity

Indonesia’s Supreme Court has continued improving the capacity of its judges to handle Sharia finance cases via training conducted in co-operation with Indonesia’s Financial Services Authority (OJK – Otoritas Jasa Keuangan) and other authorities including Saudi Arabia and Morocco.

The LAPS SJK began operating on 1 January 2021, replacing six such agencies and simultaneously expanding the settlement scope to include the fintech sector. It works alongside the National Sharia Arbitration Board (Basyarnas-MUI) established in 2003 by the Indonesian Council of Ulema (MUI - Majelis Ulama Indonesia), a semi-official authority on Islam, amid rapid growth in Indonesia’s Islamic finance sector.

The board is tasked with resolving disputes in trade, finance, law, industry and services based on Sharia principles and provides binding legal opinions at the parties’ request. Basyarnas-MUI now has representative offices in 20 of the country’s 32 provinces.

Mochammad Buchori Muslim, head of the MUI Sharia economic department, said the council regularly issued fatwas (edicts) on points of Islamic finance.

“The Supreme Court conducts annual deliberations where our recommendations are included in the court’s circulars. Universities with law faculties have also been engaged in discussions on dispute settlement via theses, dissertations and journals,” he says.

Progress in Malaysia

In November the Kuala Lumpur-based Asian International Arbitration Centre (AIAC) in November introduced the i-Arbitration Rules 2021, a neutral international framework for resolving disputes related to Islamic finance. Malaysia’s national news agency Bernama quoted the prime minister’s department (parliament and law) minister Seri Wan Junaidi Tuanku Jaafar saying the rules meant the AIAC had pioneered the development of global disput resolution.
“This method is believed to help consumers around the world bring an integrated approach in dispute resolution and provide continuity in conventional business practices as well as Sharia requirements for such transactions,” he said.

© SalaamGateway.com 2022. All Rights Reserved

12 Jul 2022
Insight
Halal Industry
Clear halal and stunning labelling needed to help consumers choose meat, say animal rights and halal groups

Consumers have the right to know if meat has been pre-stunned or not.

 

Brussels: European consumers need to be offered clear labelling so they only buy halal meat, especially from animals not pre-stunned before slaughter, if they choose, animal rights organisations and halal groups say.

“It would be helpful if all meat was labelled pre-stunned or not so people can make informed choices,” Nick Palmer, head of Compassion in World Farming UK, an animal welfare campaign and lobbying group, told Salaam Gateway.

He said it was undesirable for non-pre-stunned meat to be accidentally purchased by consumers who preferred to avoid it.

His comments come as the labelling issue was raised in the European Parliament. In a written parliamentary question, Greek European Conservatives and Reformists (ECR) MEP Emmanouil Fragkos asked about the “increasing number of Islamic butchers selling halal meat” in Greece. He claimed “Christians living in largely or primarily Muslim communities within which Islamic butchers operate, unfortunately find themselves obliged to consume halal meat against their will”.

However, there was no European Union (EU) legislation on meat labelling corresponding to religious practices to avoid this situation, a European Commission official told Salaam Gateway. EU member state regulators, religious authorities and non-governmental organisations have competence in this matter.

The official said it was up to consumers to decide whether or not they wanted to consume halal or non-halal food.

Palmer told Salaam Gateway the issue for animal welfare was not really halal meat, but meat from properly stunned animals. There was no animal welfare-related reason to object to halal if pre-stunning had happened, as was often the case.

However, Brussels still allowed slaughter without stunning, justified under the EU 2009 Council regulation on the protection of animals at the time of killing. This accommodated religious slaughter in slaughterhouses.

Fragkos said despite mounting pressure to stop this practice, on 18 June the Brussels regional parliament voted against a bill to ban halal and kosher slaughter in the Belgian capital. Slaughter without stunning was banned in the Belgian provinces Wallonia and Flanders in 2017 and 2019 respectively.

Palmer said a butcher deciding to only sell meat from pre-stunned animals may gain customers concerned about the issue while losing others. However, he had not heard that butchers found the issue unmanageable.

“Some will choose to sell all kinds of meat; others will specialise either for ethical or religious reasons, or simply a commercial judgement that one market is more profitable. As for consumers, many simply want the nearest convenient and affordable food,” he said.

He said typically religion did not enter people’s thoughts when deciding what to have for a family meal, and there would be crossover with some Muslims buying non-halal and some non-Muslims buying halal.

“However, an increasing number of consumers from all religions want to feel the animals have been treated well, including minimising suffering at slaughter, and the large quantity of halal meat coming from pre-stunned animals perhaps reflects that preference,” he said.

Meanwhile, Mohammed Salah Eldin, halal administrator at the Brussels-based Halal Federation of Belgium (HFB), said more butchers selling halal meat should not be an issue for Christians and non-Muslims.

The matter only affected a small number of customers and would not influence the market, he told Salaam Gateway. Belgium Muslims account for less than 500,000 people out of the country’s 11.6 million population and 10% of the EU and eastern Europe populations.

According to data from USA-based think tank Pew Research Centre cited by worldatlas.com, among the Western European countries, France (7.5%), Netherlands (6%) and Belgium (5.9%) had the greatest share of Muslims in their population in 2010.

However, neither EU statistical office Eurostat nor market researcher Euromonitor International possess figures on the proportion of halal meat sold in Europe, but Euromonitor figures show meat consumption (and thus the amount of halal meat sold) varies significantly country by country.

France consumes 824,200 tonnes of beef and veal and 85,400 tonnes of lamb, mutton and goat and Italy (725,700 tonnes of beef and veal and 54,200 tonnes of lamb, mutton and goat), effectively topping the table.

 

 
Read - Halal and non-halal experts work to treat animals humanely – but consciousness at killing remains a concern
 
Read - Global cultured meat market set to boom, but is it halal?
 
Read - European rules on butchering tighten, challenging halal sector
 

 

Eldin insisted halal was “a quality label and quality concept” and large French families often tried halal butchers, for poultry predominantly, as the meat was cheaper. Once discovering the quality, they remained with halal.

He said studies by the University of Ghent have argued stunning was not the main animal welfare concern, taking account of an animal or bird’s entire life. An older paper emphasised that Muslims bought meat considering all aspects of animal welfare and health.

Halal-slaughtered animals must have been fed a natural diet containing no animal by-products; properly transported to the slaughterhouse and slaughtered on their own.

“It is a ‘farm to fork’ issue,” he told Salaam Gateway, claiming non-halal meat was often slaughtered in industrial conditions by commercial businesses.

He agreed labelling and standards were essential to stop consumer confusion when buying meat. Halal meat should carry a halal certificate showing the animal had been slaughtered using a sharp knife and had lived according to halal conditions.

“We are working with the EU and animal rights groups like GAIA (Belgium-based Global Action in the Interest of Animals) to ensure proper halal standards.”

Eldin argued Muslims were not obliged to eat halal, but health-wise it was better for them.

Meanwhile the popularity of halal meat was undeniable and Brussels boasted not only halal butchers, but also halal pizzerias and snack bars.

Islamic butchers Boucherie Nassiri in Forest (or Vorst in Dutch), Brussels, told Salaam Gateway his meat carried no official certificate, but “everyone knows the meat is halal” as it is written on the shop sign (in Arabic) on the door.

“We also have halal meat written on our bills,” he said, adding his customers are both Muslims and non-Muslims.

© SalaamGateway.com 2022. All Rights Reserved

04 Jul 2022
Insight
Islamic Finance
Global Islamic finance sector moves towards incorporating ESG concerns

Islamic finance industry looking for growth in new areas.

 

London: Global Islamic finance industry observers are predicting significant growth in Sharia-compliant environmental and social governance (ESG) investment, as the demand for institutions to ethically deploy funds, along with an awareness of climate change and social justice, expands.

According to research conducted by Maybank Islamic Berhad, the Islamic banking arm of Malaysia’s Maybank Group, and IslamicMarkets.com, a UK-based financial intelligence and investing platform, more than a third (36%) of Islamic finance professionals expect “dramatic growth” in combined ESG/Sharia compliance funds over the next two years.

The research, published in a report called Driving Sustainable Impact Through Islamic Finance in March this year also showed 73% of those surveyed believe the Islamic finance market has yet to meet the demand for ESG investment strategies.

They add there is ample room for new Sharia-compliant ESG products. The Maybank findings also indicated the majority of these new funds could be bought by non-Muslim investors whose appetite for ESG investments will potentially outstrip Islamic investors given the comparatively larger non-Muslim finance market.

These investors are also unconcerned about whether the key ESG component is Sharia compliant.

Research by Refinitiv, an American-British global provider of financial market data owned by the London Stock Exchange (LSE), also published in March, claims 2021 was a particularly busy year for the launch of Sharia-compliant funds with an ESG focus.

Refinitiv points to the establishment of new funds in Saudi Arabia (SEDCO Capital), Switzerland (Lombard Odier) and Malaysia (Pheim Global ESG Islamic Fund – PPGEIF) as examples of some of the most recent launches.

The group identifies Saudi Arabia as the global hotspot for Sharia-compliant capital aimed at ESG. The kingdom’s favoured approach to ethical investment has been to issue ESG-focused sukuk (Sharia-compliant bond-like instruments used in Islamic finance).

Refinitiv’s data shows in the first two months of 2022, the kingdom issued ESG sukuk totalling $1.5 billion, more than any other country. The Refinitiv league table names next largest sukuk issuers were Indonesia, Malaysia and the United Arab Emirates (UAE) as the next largest sukuk issuers.

Muhammed-Shahid Ebrahim, a professor of finance at Durham University’s Business School in the UK, said part of the reason the Islamic finance market was playing catch-up with ESG-focused investment opportunities was that “financial literacy” in the Muslim community had not been historically widespread to support growth in Sharia-compliant ESG investments.

Unlike the non-Muslim finance industry, partly driven towards ethical investments by retail investors, individual shareholders and pension fund members, the appeal of ESG-focused investments in the Islamic finance market has been mostly limited to institutional and sophisticated investors.

“ESG-focused assets use a general value system instead of a religious value system. An average Muslim consumer is keener on an investment approved by religious scholars than one based on general values,” Ebrahim explained, adding a lack of development of theory in Islamic finance had similarly restricted the expansion.

Despite this partial hesitancy of the Islamic finance market to embrace ESG investing, according to some experts, incorporating ESG principles into Islamic finance was a natural fit. A central pillar of Islamic finance is to screen Sharia-compliant products to avoid industries deemed unlawful (haram) under Islamic guidance and law. This includes tobacco, alcohol, weapons and gambling – areas theoretically also prohibited in ESG investing.

Amanjit Fagura, a Dubai-based partner at US-headquartered international law firm Morgan Lewis, says because ESG-focused and Islamic investments are guided by principles of morality, transparency, and fairness, it was possible for an investment to be simultaneously Sharia and ESG compliant.

However, the two concepts do not always overlay each other perfectly. Fagura cited investment into a highly leveraged solar energy project.

“(This) may be a sound ESG investment, but would not be Sharia-compliant due to the prohibition on riba (earning interest on loans),” she said.

Improving access

Fagura acknowledges there is currently a lack of access to investment opportunities that explicitly satisfy both sets of values, but this is changing as financial institutions respond to market demand.

“While green investments that tick the boxes of ESG and Sharia compliance may currently be limited, the rise in innovative structured solutions that allow for exposure to certain ESG investments not otherwise Sharia compliant are increasingly being used by family offices, regional banks and institutional investors,” Fagura said, noting this could further bridge the gap between Islamic finance and ESG investing.

A 2019 report published jointly by the World Bank and Securities Commission Malaysia suggests such innovative structures could include sukuk designed exclusively to manage green projects, mortgage-backed securities that could act as a new asset class to bridge sustainability and profit; waqf (a special philanthropic deed that involves donating a fixed asset to produce a financial return or provide a benefit) and zakat (an annual obligation to donate a proportion of wealth to charitable causes) funds structured into broader financing purposes that give impacts on social and environmental dimensions.

Another solution to the access issue could be developing Islamic fintech that promises to bring retail investing to Muslim consumers who have hitherto lacked the opportunity to participate in financial markets.

Bashir Yusuf Ahmed, founder and CEO of eTijar, a Nigerian Sharia-compliant fintech platform providing Islamic investment and saving services to Muslims and non-Muslims, expects young Islamic consumers to be attracted by the prospect of making direct ethical choices about their investments.

eTijar screens for Sharia-compliant investments and mutual funds to offer its users, allowing customers to build their portfolios using its platform and earn profit rather than interest.

“For the general ethical user, (our screening process means) they know we are playing by ESG rules and not dealing with anything that conflicts with (Islamic) principles and beliefs,” Yusuf explained.

However, he admits there is work to do to persuade potential investors to choose ethical investments.

“Some people think when you talk about halal or ethical (investing), this means there is no return on investment, but in fact there is the possibility of very good returns. Some of the industries or companies that qualify (as ESG investments) are dividend-paying entities,” said Yusuf.

Ebrahim thinks breaking down cultural barriers and better financial education would allow Muslims to make informed and participate more in financial markets while broadening the appeal of Islamic finance to the wider market.

“The integration of the Muslims with the rest of the society can lead to the development of ESG Sharia funds. There are issues in the Islamic scripture and traditions … not understood or applied by the religious scholars or political Islamists. If these issues are understood in their proper context, it will expand the scope of ESG Sharia funds and attract non-Muslims,” he added.

Standardisation

An issue repeatedly cited as a barrier to the growth of ESG investing in Islamic finance is the lack of agreed standards for what constitutes an ESG investment and how that maps across to Sharia principles.

According to the Maybank report, 72% of recipients felt introducing a global standard for ESG and Sharia would boost the demand for ESG investment opportunities among Islamic investors. However, immediate progress in this area was not anticipated.

“Respondents are concerned about the lack of a global standard for ESG and Sharia,” it said, with 55% of respondents believing the launch of a global standard was two years or more away.

While global ESG standards were under development by bodies including the newly established International Sustainability Standards Board (ISSB) that incorporate work developed by the older Sustainability Accounting Standards Board (SASB), there was no current move to link these standards to Sharia rules.

Meanwhile, standards were being set in individual markets, presenting the challenge of harmonisation. A joint 2019 report by the United Nations-supported Principles for Responsible Investment (PRI) and the CFA Institute, a US-based finance education organisation, stock exchanges are developing reporting guidance and listing standards for ESG that impact Islamic finance.

According to the report titled ESG and Islamic Finance: Complementary Investment Approaches, this standardisation method has been followed by the Dubai Financial Market (DFM), a Sharia-compliant exchange. In 2019 it updated its DFM Shari’a Standards to cater to investors’ growing interest in sustainability and a green economy and in 2020 launched its own ESG Index.

In principle, until more comprehensive regulation is approved, especially internationally, anything can be marketed as an ESG/Sharia investment and it was up to investors to decide if they agreed – a situation that makes some Muslim investors uncomfortable.

Fagura said, “Investors will likely conduct their due diligence on any Sharia-compliant opportunities claiming to be ESG investments to ensure such investments do comply with their investment aims and are not misled by greenwashing”.

Some national regulators are taking steps to tackle this issue by personally vetting ESG claims. Securities Commission Malaysia launched the FTSE4Good Bursa Malaysia Sharia index in July 2021 that measures the companies demonstrating strong ESG practices.

It seems likely Sharia-compliant and ESG investing are destined to remain separate approaches for the time being, but will increasingly converge as market factors and financial and technological innovations break common ground.

Ebrahim said the Islamic finance industry had a long way to go before seeing “a truly Islamic financial architecture” that could comfortably accommodate ESG investing.

© SalaamGateway.com 2022. All Rights Reserved

30 Jun 2022
Insight
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