High-Level Working Group on Green Sukuk
About the High Level Working Group
During COP26, the Islamic Finance Council UK (UKIFC), Her Majesty’s Treasury, Ministry of Finance in the Republic of Indonesia, Islamic Development Bank, London Stock Exchange Group and the Global Ethical Finance Initiative (GEFI) came together to launch a High Level Working Group on Green Sukuk (HLWG).
Our “Innovation in Islamic Finance: Green Sukuk for SDGs” report identified that an additional US$30+ billion of capital towards the SDGs can be raised by 2025 through green and sustainability sukuk. The HLWG has been launched to unlock this potential and deliver the goals of the Paris Agreement.
- Outcome driven
Working Group Aims
The HWLG will be a focused, high-profile group of global stakeholders that will be led by the founding partners. The UKIFC together with Global Ethical Finance Initiative will act as Secretariat. The HLWG will focus on the following objectives:
Ensure 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 key 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
“The Islamic finance industry has a key role to play in prioritising the climate and the broader SDGs going forward. These issues are naturally aligned to the principles of Islamic finance and promoting green sukuk will be a key route that can drive industry growth.”
“The launch of the High-Level Working Group on Green Sukuk is a significant milestone for the development of Islamic Finance and sustainable finance globally. I am delighted that LSEG is a founding member to help scale green sukuk through our markets and data, allowing companies to access finance in a manner consistent with their faith and values. Green sukuk are strongly linked to assets in the growing green economy, and can help mobilise the capital needed to fund the U.N. Sustainable Development Goals.”
“The Republic of Indonesia is always a keen promoter of the asset class and committed to further enrich and develop Green Sukuk, as seen by our consistent effort in issuing the instrument annually, and therefore, very excited to participate in this collaboration. We hope to be able to share our experiences and provide valuable precedents to the group, at the same time learning and apply best practices or initiatives for the improvement of Green Sukuk.”
“The UK has strong credentials in green and Islamic finance, and we’re proud to be a founding country partner of the High Level Working Group on Green Sukuk which launched at COP 26 in Glasgow. Green Sukuk offer countries and companies an important route to secure investment for sustainable projects, so it’s important we work globally to kickstart and grow this market.”
Financing a Sustainable Future
Green and sustainability sukuk report 2022
With our partners the London Stock Exchange Group (LSEG) and the Global Ethical Finance Initiative (GEFI), we launched a report on green and sustainability sukuk, examining the potential for Islamic fixed income products to deliver financial returns and impact for the SDGs. The report was presented at the Dubai launch event for GEFI’s Path to COP28 campaign on 24th October.
Innovation in Islamic Finance:
Green Sukuk for SDGs
In 2015, the United Nations (UN) established a blueprint for addressing economic, social, governance, and environmental challenges – the Sustainable Development Goals (SDGs). It is estimated that funds of up to US$7trn are required on an annual basis for initiatives aligned to the SDGs.
This report, commissioned in conjunction with UNDP Indonesia, explores the role of green sukuk in the context of climate change and the green economy. It highlights the potential of green sukuk to be used effectively by OIC member states and beyond, to finance NDC’s by attracting investment at scale to projects that reduce national greenhouse gas emissions in line with the Paris Agreement.