Comparing Green Bonds and Green Sukuk: Financial Performance, Sustainability Alignment, and Institutional Governance

Salil Seth and Lokesh Tomar

Journal of Business and Social Review in Emerging Economies, 2026, vol. 12, issue 1, 29-36

Abstract: Purpose: The growing imperative of the climate transition has increased the use of capital markets to create sustainable finance. Green bonds and green sukuk have become important tools for financing environmentally oriented projects in conventional and Islamic financial markets. However, there is a lack of comparative synthesis between them in terms of financial, environmental, and governance aspects. The purpose of the study is to conduct a structured comparative analysis of green bonds and green sukuk in terms of financial performance, sustainability alignment, and governance architecture.Design/Methodology/Approach: This paper presents a structured comparative narrative review of peer-reviewed literature to analyze green bonds and green sukuk using financial performance, sustainability alignment, and governance architecture. The study is based on peer-reviewed journal articles published after 2015, selected from academic databases using relevant keywords.Findings: Green bonds are supported by more quantitative analysis, particularly on environmental impact, while evidence on financial returns remains inconclusive. Green sukuk have a strong ethical base grounded in Sharia principles but lack empirical financial studies. Institutional quality, regulatory practices, and transparency emerge as key factors influencing credibility and sustainability. Governance ecosystems influence sustainability outcomes more than instrument design.Implications/Originality/Value: This paper contributes by shifting the focus from structural differences to institutional effectiveness, integrating conventional and Islamic green finance. The findings are relevant for policymakers, regulators, and researchers aiming to strengthen governance and enhance the credibility of sustainable financial instruments.

Keywords: Islamic Finance; Sustainable finance; Green Bonds; Green Sukuk (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:src:jbsree:v:12:y:2026:i:1:p:29-36

DOI: 10.26710/jbsee.v12i1.3672

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