Islamic social investments

Magda Ismail Abdel Mohsin () and Aishath Muneeza ()

Chapter 7 in Inclusive Finance, 2025, pp 108-128 from Edward Elgar Publishing

Abstract: Islamic social investments prioritise ethical, moral, and community-focused financial practices aligned with Shariah principles. Unlike conventional investments, which primarily emphasise financial returns, Islamic social investments aim to address societal challenges such as poverty alleviation, education, healthcare, and infrastructure development while promoting justice, equity, and sustainability. This chapter explores the foundational principles of Islamic social investments and their alignment with Shariah, emphasising the prohibition of investments in unethical sectors such as gambling and alcohol. The chapter compares Islamic social investments with conventional frameworks, highlighting their shared objectives of societal welfare but contrasting their philosophical underpinnings. The focus then shifts to the Principles for Responsible Investment (PRI), showcasing their compatibility with Islamic finance. PRI's emphasis on environmental, social, and governance (ESG) factors aligns seamlessly with the ethical foundations of Islamic finance, offering a bridge between traditional Islamic values and contemporary global sustainability objectives. Islamic social investments also illustrate their capacity to contribute to sustainable finance by addressing global challenges such as poverty, climate change, and infrastructural deficits. The integration of ESG considerations within Islamic finance is explored as a means to amplify its role in fostering responsible and green investments. A case study on Malaysia, a pioneer in combining Islamic finance with ESG practices, is presented to demonstrate practical applications and lessons. The Malaysian experience highlights how Islamic finance can serve as a catalyst for achieving the United Nations Sustainable Development Goals, offering insights into creating equitable, just, and sustainable financial systems.

Keywords: Islamic Social Investments, Shariah Compliance, Ethical Finance, Sustainable Finance, ESG, Principles for Responsible Investment (PRI), Poverty Alleviation; , Social Justice, Infrastructure Development, United Nations Sustainable Development Goals (SDGs), Islamic Finance, Malaysia, Socio-Economic Empowerment (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035348763
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