Exploring shared values between Islamic finance and other ethical finance traditions

Since 2010 the IFC has been actively exploring the shared values between Islamic finance, the broader ethical finance arena and other faith groups. Through the Edinburgh Ethical Finance roundtable series and a roundtable with the Archbishop of Canterbury hosted in the House of Lords, the IFC has been at the forefront of a fascinating and insightful debate on the challenges on creating products based on ethical parameters.

More information on our work in this area is available under the ‘Ethical Finance’ section of this website.
Below is the press release issued following a pioneering roundtable bringing the three Abrahamic faith groups together.

Faith leaders debate new ethical finance model at the House of Lords (Sept 2013)

The UK’s faith leaders convened yesterday to debate how faith based principles can help create a more just and socially responsible financial system.

The Islamic Finance Council UK (IFC) hosted the afternoon meeting at the House of Lords, with the keynote address given by the Archbishop of Canterbury. The roundtable builds on the dialogue which has been developing in Scotland over a series of ethical finance roundtables held over the past 18 months.

Speaking at the event, which was supported by the Arab Finance Forum and the Cambridge Interfaith Programme, the Archbishop of Canterbury Justin Welby, said:

“The big area that has to change in our financial services structures is not around leverage and levels of debt in financial institutions – although they are crucial and they must change – but more fundamentally, even than that, is the issue of culture. Culture is an area that cannot be legislated, it can only be changed by a transformation in the spirit of society which leads to a sense of what is right and wrong. It is here where the inter-faith discussions come in. The lively presentation of the intrinsic principles that we each have, and where they overlap, that we have together, sets a tone which one hopes over time will begin to permeate and self-correct into the way that our banking system works.”

Presenting alongside the Archbishop was Rabbi Dr Naftali Brawer and Sheikh Ruzwan Mohammed who discussed the underlying ethical principles relating to financial transactions from the Jewish and Islamic traditions. The sessions also included presentations from a number of practitioners who are actively dealing with the practical challenges in managing the funds of Churches and faith based investors in a manner compliant with their faith.

Speaking after the event, Graham Burnside, Head of Banking and Finance at Tods Murray Solicitors and Executive Board Member of the IFC, said:

“It is a truly exciting time to be involved in ethical finance. The goal in view is to create a model which gives consumers a choice as to where their money is employed, providing transparency and a focus upon social return as well as economic gain. Our discussions to date in Scotland have drawn on the nation’s rich heritage in this area of the banking sector, such as the pioneering development of savings banks and mutuals. With its focus on social returns ethical finance addresses some of the current public hostility to the existing banking and investment system. We are delighted to be debating the next steps with such influential figures representing the UK’s major faiths.”

Omar Shaikh, Director at the Islamic Finance Council UK, commented:

“It is great to see the faith communities coming together. The roundtable is a positive reflection of the UK’s ability as a rich diverse society, to bring communities together to focus on the common good. Many people in society, regardless of faith background, are eager to see a reformed banking sector and I hope the faith communities can play a practical role towards realising such.”

Based on the outcomes of the event and the already established dialogue in Scotland, an innovative opportunity to create a new form of ethical financial model, open to all in society and based on the shared values inspired by the great faith traditions, is within grasp. The model would look to draw on ideas of ‘impact investing’ and ‘limited purpose banking’ with the aim of providing customers with enhanced visibility and social as well as financial returns.

Rabbi Dr Naftali Brawer added his calls to continuing discussion on the issue, saying:

“Ethical finance is crucial to rebuilding trust in a broken system. Practitioners in the financial industry must begin by asking the right questions, such as how they can fulfil a greater purpose for society. This roundtable is a good place to start but the conversation must continue and expand.”

If you would like the detailed transcript of the proceedings, click here.

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