Editorial

Abstract

In the Name of Allah, Most Gracious, Most Merciful. The development of the Islamic finance market over the years has not been without its challenges, whether on the political, legal, Sharīʿah or commercial fronts. Notwithstanding these challenges, the Islamic finance market has continued to push forward, with a step up in activity from different players around the globe. In the process, the industry has become more innovative in its approach and in expanding its coverage to include new types of financing and new markets.

One way for the industry to create more social impact and contribute towards sustainable development goals is to associate itself with green and socially responsible initiatives. One of the latest developments in this respect is the issuance of the world’s first sovereign green sukūk by Indonesia in February 2018. This issuance was for an amount of US$1.25bn made under the Republic’s Green Bond and Green Sukuk Framework. While Indonesia has a thriving Islamic banking industry, its sukūk sector has been slower to take off, especially on the corporate side. In a move to spur corporate players and concurrently support environmentally friendly initiatives, the Indonesian Government announced this green issuance. Its proceeds will be used to finance projects such as renewable energy, green tourism and waste management