Impact of Green Finance and ESG on the Sustainable Performance of Islamic Banks
Purpose: This Systematic Literature Review (SLR) critically explores the intersection of green finance, ESG frameworks, and sustainable performance within Islamic banking. It interrogates the compatibility of Islamic finance principles with evolving global sustainability agendas, focusing o...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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CSRC Publishing
2025-06-01
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| Series: | Sustainable Business and Society in Emerging Economies |
| Subjects: | |
| Online Access: | https://publishing.globalcsrc.org/ojs/index.php/sbsee/article/view/3353 |
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| _version_ | 1849714969592987648 |
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| author | Muhammad Ejaz Muhammad Ashraf Sadiq Shahid Muhammad Kamran |
| author_facet | Muhammad Ejaz Muhammad Ashraf Sadiq Shahid Muhammad Kamran |
| author_sort | Muhammad Ejaz |
| collection | DOAJ |
| description |
Purpose: This Systematic Literature Review (SLR) critically explores the intersection of green finance, ESG frameworks, and sustainable performance within Islamic banking. It interrogates the compatibility of Islamic finance principles with evolving global sustainability agendas, focusing on ethical alignment and value-based financial transformation.
Design/Methodology/Approach: The review synthesizes insights from over 80 peer-reviewed articles published between 2015 and 2025. Using bibliometric and thematic analysis—supported by VOSviewer—the study maps co-authorship networks, citation clusters, and emerging thematic trends. It emphasizes instruments such as green sukuk, waqf-linked investments, and Shariah-compliant ESG governance mechanisms.
Findings: Results indicate a growing convergence between ESG principles and Islamic financial ethics, especially in Malaysia, Indonesia, and the MENA region. However, the literature exposes fragmentation in ESG reporting standards, lack of robust environmental metrics, and limited digital infrastructure. Integration of Islamic social finance into ESG frameworks remains insufficient.
Implications/Originality/Value: This review offers a multidimensional synthesis bridging normative Islamic ethics with practical ESG applications. It calls for contextualized ESG-Shariah frameworks, rigorous empirical assessments of impact, and cross-border regulatory harmonization to empower Islamic banks as pivotal actors in the global ethical finance and climate resilience movement.
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| format | Article |
| id | doaj-art-20739c4e985445039b16e3c36d08104e |
| institution | DOAJ |
| issn | 2708-2504 2708-2172 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | CSRC Publishing |
| record_format | Article |
| series | Sustainable Business and Society in Emerging Economies |
| spelling | doaj-art-20739c4e985445039b16e3c36d08104e2025-08-20T03:13:32ZengCSRC PublishingSustainable Business and Society in Emerging Economies2708-25042708-21722025-06-017210.26710/sbsee.v7i2.3353Impact of Green Finance and ESG on the Sustainable Performance of Islamic BanksMuhammad Ejaz0Muhammad Ashraf1Sadiq Shahid2Muhammad Kamran3Bahauddin Zakariya University, Multan, PakistanBahauddin Zakariya University, Multan, PakistanBahauddin Zakariya University, Multan, PakistanEmerson University Multan Pakistan Purpose: This Systematic Literature Review (SLR) critically explores the intersection of green finance, ESG frameworks, and sustainable performance within Islamic banking. It interrogates the compatibility of Islamic finance principles with evolving global sustainability agendas, focusing on ethical alignment and value-based financial transformation. Design/Methodology/Approach: The review synthesizes insights from over 80 peer-reviewed articles published between 2015 and 2025. Using bibliometric and thematic analysis—supported by VOSviewer—the study maps co-authorship networks, citation clusters, and emerging thematic trends. It emphasizes instruments such as green sukuk, waqf-linked investments, and Shariah-compliant ESG governance mechanisms. Findings: Results indicate a growing convergence between ESG principles and Islamic financial ethics, especially in Malaysia, Indonesia, and the MENA region. However, the literature exposes fragmentation in ESG reporting standards, lack of robust environmental metrics, and limited digital infrastructure. Integration of Islamic social finance into ESG frameworks remains insufficient. Implications/Originality/Value: This review offers a multidimensional synthesis bridging normative Islamic ethics with practical ESG applications. It calls for contextualized ESG-Shariah frameworks, rigorous empirical assessments of impact, and cross-border regulatory harmonization to empower Islamic banks as pivotal actors in the global ethical finance and climate resilience movement. https://publishing.globalcsrc.org/ojs/index.php/sbsee/article/view/3353Green FinanceESG IntegrationIslamic BankingSustainable Performance |
| spellingShingle | Muhammad Ejaz Muhammad Ashraf Sadiq Shahid Muhammad Kamran Impact of Green Finance and ESG on the Sustainable Performance of Islamic Banks Sustainable Business and Society in Emerging Economies Green Finance ESG Integration Islamic Banking Sustainable Performance |
| title | Impact of Green Finance and ESG on the Sustainable Performance of Islamic Banks |
| title_full | Impact of Green Finance and ESG on the Sustainable Performance of Islamic Banks |
| title_fullStr | Impact of Green Finance and ESG on the Sustainable Performance of Islamic Banks |
| title_full_unstemmed | Impact of Green Finance and ESG on the Sustainable Performance of Islamic Banks |
| title_short | Impact of Green Finance and ESG on the Sustainable Performance of Islamic Banks |
| title_sort | impact of green finance and esg on the sustainable performance of islamic banks |
| topic | Green Finance ESG Integration Islamic Banking Sustainable Performance |
| url | https://publishing.globalcsrc.org/ojs/index.php/sbsee/article/view/3353 |
| work_keys_str_mv | AT muhammadejaz impactofgreenfinanceandesgonthesustainableperformanceofislamicbanks AT muhammadashraf impactofgreenfinanceandesgonthesustainableperformanceofislamicbanks AT sadiqshahid impactofgreenfinanceandesgonthesustainableperformanceofislamicbanks AT muhammadkamran impactofgreenfinanceandesgonthesustainableperformanceofislamicbanks |