Policy approach adopted for issuance of Green Sukuk: is priority given to priority needed areas?

Abstract

Purpose

Green Sukuk (GS) is a recent innovation that has the potential to serve humankind in sustainable development. However, its potential can only be achieved if the proceeds of GS are used for the priority areas needed. Therefore, the purpose of this study is to find out, using selected GS issued to determine whether the proceeds of GS are actually given to the needed areas.

Design/methodology/approach

This is qualitative research utilizing case studies where the “priorities given” areas are observed through information collected from the library that consists of primary and secondary sources, such as statutes, books, articles and internet sources, while “priorities needed to issue GS” areas are determined through information collected from Al-Quran and Hadiths to derive conclusions.

Findings

The outcome of this study reveals some untouched areas that needed immediate attention where GS can be implemented. This study recommends implementing GS for the plant, agriculture, forests, road, water, animal and others. One example in this regard is to create “forest sukuk,” which is a tool for financing forest preservation.

Originality/value

It is anticipated that, via the outcome of this research, GS issuance frameworks can be enhanced, especially in revising the areas in which Sukuk proceeds can be used, and it will provide guidance to the potential GS issuers to choose financing projects.

Citation

Rahman, A., Ahmad, A.U.F., Bin-Nashwan, S.A., Muneeza, A., Abdul Halim, A.H. and Markom, R. (2023), "Policy approach adopted for issuance of Green Sukuk: is priority given to priority needed areas?", Journal of Islamic Accounting and Business Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JIABR-10-2022-0279