- Global Green and Sustainability Sukuk issuance exceeded $10 billion by the third quarter of 2023 compared to $9.4 billion in 2022, according to London Stock Exchange Group (LSEG) data.
- Indonesia, Malaysia, and Saudi Arabia have raised 77% of the total value of cumulative issuance as of Q3 2023
- ESG sukuk issuance from GCC-based entities was $6.1 billion during the first nine months of 2023, nearly double their 2022 full-year level. UAE-based corporates issued a record $3.9 billion worth of these sukuk, accounting for 38% of the global total, making the UAE the largest issuance base for ESG sukuk to date in 2023.
- Corporate issuers have become increasingly active in the green and sustainability sukuk market, accounting for 65% of issuance by the third quarter of 2023, an increase from 41% in 2022.
Global Green and Sustainability Sukuk issuance exceeded $10 billion by the third quarter of 2023, according to LSEG data published today by the High-Level Working Group (HLWG) on Green and Sustainability Sukuk.
As part of the Global Ethical Finance Initiative’s (GEFI) COP28 Unlocking Islamic Finance Summit held at the Dubai International Finance Centre (DIFC), the HLWG published its second report entitled “Financing a Sustainable Future: Green and Sustainability Update Report 2023”. The event, attended by over 300 practitioners, explored how Islamic finance and sustainability principles can be aligned through new standards and improved practices in the finance industry.
The HLWG was launched in November 2021 at COP26 by the Islamic Finance Council UK, HM Treasury, the Ministry of Finance in the Republic of Indonesia, Islamic Development Bank, LSEG, and GEFI.
The report is a follow-up to Financing a Sustainable Future: Green and Sustainability Report 2022, showcased at COP27 in Sharm El-Sheikh, that provided an introduction to, and overview of, the green and sustainability sukuk market. This year’s updated report includes the latest market figures and details of some recent flagship issuances.
The HLWG notes its support for the announcement by the Islamic Development Bank (IsDB, the Bank), the International Capital Market Association (ICMA) and LSEG on the sidelines of the COP28 in Dubai to develop a practitioners’ guide on the issuance of Sukuk in line with the Green Bond Principles and Sustainability Bond Guidelines as published by ICMA, which was a development suggested in the recommendations of its 2022 report.
The HLWG intends to use the momentum from COP28 to continue to raise awareness and inspire more green and sustainability sukuk issuances to help address climate change.
Omar Shaikh, Advisory Board Member & Director, Islamic Finance Council UK (UKIFC), commented: “The HLWG continues to affirm that progress can be made with consistent effort no matter how little. The updated report highlights great improvement in the sukuk market. The workplan of the HLWG having been approved, will provide room for more collaborations for the promotion of green and sustainability sukuk.”
Shrey Kohli, Director, Head of Debt Capital Markets, London Stock Exchange, and Chair of the HLWG on Green and Sustainability Sukuk, said: “With over $10 billion raised in the first three quarters, 2023 marks a record year for Green and Sustainability Sukuk. At COP28, we have seen the recommendations of the HLWG resonate and drive collaboration within the industry. We will continue to work with our partners to enhance the awareness of Sukuk as an asset class and accelerate progress towards climate and sustainability goals worldwide.”
Mustafa Adil, Head of Islamic Finance, Data & Analytics, LSEG, said: “Embracing sustainability in Islamic finance isn't just a choice; it's a responsibility. By aligning our principles with the global green movement, we can create a more equitable and environmentally conscious financial future for all."
Read the full report here.
About the HLWG
The HLWG is a focused, high-profile group of global stakeholders that is led by its founding partners. Shrey Kohli, Head of Debt Capital Markets at the London Stock Exchange, is the current Chair. It has a 3-year initiative that directs investment to reduce greenhouse gas emissions in the world’s regions in most need. It is currently in its second year. The UKIFC, together with the Global Ethical Finance Initiative, acts as its Secretariat. The HLWG focuses on the following objectives:
- Ensuring green and sustainability sukuk is highlighted at annual COP summits up to and including 2023 to increase awareness of the instrument and proactively encourage the issuance of such sukuk by all market stakeholders (corporates, multilaterals, and sovereigns) as a key Islamic financing tool.
- Assist and enhance existing established global standard-setting bodies and regulatory initiatives run by the UN, IsDB, and others (e.g. PRI, NGFS, Transform, PRB) to encourage better alignment of the Islamic finance industry with the global green and sustainability financial movement.
- Identify and address specific existing challenges for green and sustainability sukuk on the supply and demand side.
Read more about the HLWG here: https://ukifc.com/sdg/green-sukuk/
About The Islamic Finance Council UK (UKIFC)
The Islamic Finance Council UK (UKIFC) is a specialist, not-for-profit, advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. It has helped six countries develop enabling regulatory frameworks for Islamic finance, enhancing financial inclusion for over 15 million people, established the award-winning Ethical Finance Round Table series running since 2010, launched the world’s first joint venture between Islamic finance and the Church of Scotland, and delivered development sessions to over 500 Islamic scholars across the globe. In 2020 the UKIFC, alongside the British Government’s Treasury department, established the Islamic Finance and Sustainable Development Goals (SGDs) taskforce, which will be anchored in London.
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