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This paper aims to portray the publication pattern, key themes, study trends and future directions for the studies on ethics in Islamic finance. A total of 194 published documents that includes journal articles, books and book chapters and conference proceedings were screened for the period 1988 to August 2022 and categorized based on designated sectors of the Islamic finance industry. This paper also highlights the change in research trends in all three sectors of Islamic finance and suggests possible areas for future research.

A comprehensive systematic literature review was conducted using the “advanced search” function of “google scholar” by using the option “find articles” with the keywords “Ethic (s/al)”, “Islamic banks”, “Islamic banking”, “Islamic finance”, “Islamic capital markets” Takaful, Islamic insurance without restricting the time frame, author list and the platform. Furthermore, the search for relevant articles was conducted on other mainstream index databases such as “Web of Science” and “Scopus”.

Among the highlights of the findings were an increase in publications on ethical issues after the global financial crisis and an increase in publications in high-impact mainstream business and finance journals. A higher number of studies were documented in the area of Islamic banking and finance followed by Islamic capital markets and Islamic insurance/Takaful. Although a greater number of empirical studies were published than conceptual studies, dominance was resulted due to the replication of the studies in various jurisdictions based on the same concepts or models rather than applying diversified concepts in various jurisdictions.

This study contributes to the growing literature on ethical and/or Islamic finance as a guide for researchers to identify research gaps and provides a systematic direction for future studies in the area of ethics in Islamic finance.

This conceptual paper aims to delineate a comprehensive blueprint for the integration of environmental, social and governance (ESG) principles within the framework of Takaful operations, guided by the principles of Maqasid al-Shariah. The primary purpose is to establish a robust foundation for the sustainable transformation of Takaful, aligning it with ethical finance and Islamic values.

Using a theoretical research approach, this study delves into the multifaceted dimensions of ESG principles and the principles of Maqasid al-Shariah within the context of Takaful operations. The 17 SDGs/ESG principles and Maqasid al-Shariah are integrated to give a thorough framework for comprehending the disclosure index from western and Islamic ethical viewpoints. The research critically analyses current literature, scholarly works and authoritative sources, drawing inspiration from established approaches. Qualitative content analysis examines and compiles pertinent ideas, and the expert validates the disclosure index. It identifies key convergence, compatibility and divergence points between ESG principles and Maqasid al-Shariah to construct a comprehensive framework for Maqasid-driven ESG integration in Takaful.

The paper presents a well-defined blueprint for Maqasid-driven ESG integration in Takaful, revealing substantial areas of alignment between the two frameworks. This alignment is particularly pronounced in protecting life, religion, intellect, lineage and wealth. The blueprint underscores the potential of harmonising ESG principles with the principles of Maqasid al-Shariah, providing Takaful operators with a roadmap for enhancing their ethical credibility, societal impact and environmental stewardship.

The blueprint outlined in this study opens new avenues for research at the intersection of Islamic ethics, responsible finance and sustainable development and signals the necessity of developing a standardised disclosure index. This index will serve as a vital tool for Takaful operators to transparently communicate their commitment to ethical and sustainable practices, facilitating a deeper understanding of Maqasid-driven ESG integration and bolstering transparency for all stakeholders. Further research into this disclosure index’s practical implementation, empirical validation and strategic implications is encouraged to advance responsible finance within the Takaful industry.

The proposed blueprint provides Takaful operators with a practical guide to align their operations with both ethical finance and Islamic principles. Embracing the principles of responsible governance, societal welfare and environmental sustainability, Takaful operators can enhance their product offerings, attract socially conscious stakeholders and contribute positively to both financial and ethical objectives.

Integrating Maqasid-driven ESG principles in Takaful signifies a commitment to broader social well-being. Through initiatives aimed at safeguarding life, religion, intellect, lineage and wealth, Takaful operators can play a pivotal role in fostering social cohesion, empowering communities and actively contributing to sustainable development goals.

This conceptual paper contributes to the field by presenting a unique blueprint for integrating ESG principles within Takaful operations, guided by Maqasid al-Shariah. The novelty of this approach lies in its holistic perspective on ethical finance, aligning Islamic values with contemporary global ethical imperatives. The blueprint offered here represents an original framework for responsible Takaful practices that resonate with evolving ethical standards and the enduring principles of Islamic finance.

To show how social enterprises can take advantage of the growing ethical awareness of financial institutions to finance their work whilst remaining true to their social principles.

The concept of financial intermediation and the growing ethical dimension of financial institutions are discussed to examine the evolving role of ethics within financial intermediation and the opportunities these offer to social enterprises which have hitherto been wary of such finance on principle. Focuses on the fact that many depositors and investors are willing to sacrifice financial return for social results. Reports results of the study, which literature searches and other methods and presents information based on case studies of eight financial intermediaries that provide services to social enterprises and have a strong concern for ethics.

The case studies comprise: Aston Reinvestment Trust (ART), an industrial and provident society; Charity Bank, an FSA regulated bank with a national lending scale; Derby Loans, an industrial and provident society (IPS) and a community development finance institution (CDFI); The Ecology Building Society (EBS), an FSA‐regulated building society with a national lending scale; Industrial Common Ownership Finance (ICOF), a public company limited by guarantee with a national lending scale; London Rebuilding Society (LRS), an IPS with a local lending scale, with borrowers having to be located in London; Triodos Bank, a regulated bank with a national lending scale; and Ulster Community Investment Trust (UCIT), an IPS with a local lending scale limited to specified geographical areas. Concludes that several financial intermediaries now exist that are willing to provide short and long term finance to social enterprises.

Provides valuable information and encouragement for social enterprises seeking finance for their activities.

The purpose of this paper is to identify whether ethics is incorporated into the curriculum in postgraduate banking and finance programmes. There is growing concern that moral failure preceded the global financial crisis with waves of ethical scandals overwhelming the global banking industry highlighting a lack of integrity. Consequently, banking and financial institutions have received much criticism for focusing on higher financial returns that bring personal rewards with significant costs to the majority of society.

The population for this study is Australian universities offering banking and finance postgraduate programs. The data for this study were collected from information available on university websites. The study uses content analysis to examine course content in 897 courses offered within banking and finance programmes.

Findings reveal that 809 (90 per cent) out of 897 courses do not incorporate ethics into banking and finance programmes. Most of the 88 courses incorporating ethics as include the course as “core”, with a relatively small number offering ethics as an “elective”. Only a few courses were offered as stand-alone ethics courses. It appears from the information available that little focus is given to assessment of ethics.

This is the first study to explore whether ethics is featured in postgraduate banking and finance programmes.

Reports that there are lessons which can be learned from the Western ethical “green” finance industry for Islamic investors. States that these are that the criteria for investment selection are different, and the modes of permissible financing may also differ, but there are screening and reporting techniques which are of potential importance to both groups of investors. First addresses ethical fund management issues, which should shed some light on the dilemmas facing Islamic investors. Goes on to consider criteria for haram and halal investment, as well as the implications of company capital gearing or leverage for riba. Covers investment specific issues, including the treatment of capital gains in Islam and the evaluation of the conduct of market participants. Finally, surveys emerging markets in the Islamic world, as these are of obvious interest to Muslim investors wishing to broaden their portfolios.

The Islamic bond, known as sukuk, is an ethical financing avenue driven by religious and profit motives. This study aims to analyze the relation between related party transactions and Sukuk. Companies with high related parties transactions are deemed to be committed toward social capital that they are more likely to choose sukuk for their debt financing.

Logistic regression analyses were conducted using data from 122 listed companies in Malaysia. Related party transactions proxy for companies’ commitment to social capital, while the likelihood to choose sukuk represents ethical financing.

This study documents a positive relationship between related party borrowings and sukuk, suggesting that close ties through related parties have created an ethical sense that is associated with the uptake of sukuk.

Future research can opt other measures of related party transactions, such as by identifying the different categories of transactions and related parties. Future research may also extend the sample size by using samples from several countries to enable analysis involving institutional environment variables of the countries.

Findings of this study highlight sukuk uniqueness by supporting its role as ethical financing avenue through commitment toward social capital.

This study is the first to use the social capital perspective of related party transactions in identifying ethical financing choice that the authors believe is relevant in the institutional context of developing Muslim countries.

The purpose of this paper is to extend the literature on Islamic banking by examining their ethical dimension using transparency, placement of assets, guarantees and participation from Radical Affinity Index.

To this end, a sample of 20 Islamic banks from 13 countries (Bahrain, Saudi Arabia, Malaysia, Pakistan, Kuwait, Tanzania, Great Britain, Oman, Iraq, Egypt, Bangladesh and Qatar) was used.

The results are robust to ethical effects. The evidence suggests that among Islamic banks, at least some of them could improve their ethical requirements of the Sharia; they obtained lower scores than ethical banks in terms of RAI variables (transparency, placement of assets, guarantees and participation).

It is used a random sample rather than population with the limitations that entails. The variables in the index are based on ethical perspective; then, the index is applied in Islamic banking but with the ethical view limitation.

The Islamic banks have the option to increase their transparency including further information regarding the beneficiaries of the benevolent funds; moreover, it would offer a clearer view about their ethical and social commitment towards society.

Additionally, this paper broadens the scope of the literature by analysing the determinants of Islamic banking around ethical dimensions of financial entities.

In a dual financial system where both conventional and Islamic financial institutions co-exist, the motives behind customers’ choices of financial products remain a crucial factor to comprehend. Thus, this paper aims to examine the influence of Islamic financial literacy (IFL) and motives (religious, ethical and economic) on the holdings of Islamic financial products (IFPs).

The sample consists of 234 bank customers in Klang Valley, Malaysia, with data obtained through a convenience sampling method. The instrument used was a digital survey that was electronically sent to respondents.

Findings reveal that IFL and religious motives positively influence IFPs, whereas economic motives negatively influence IFPs. Ethical motives have no significant impact on IFPs.

The findings imply that IFPs attract customers due to their adherence to Islamic teachings, indicating strong religious motives. However, the negative leanings of the economic motive suggest that customers may perceive IFPs as less favourable due to higher costs and risks relative to conventional products. Islamic financial institutions must widen their efforts in educating the public regarding IFPs on the benefits of adherence to Shariah principles and at the same time improve their products’ cost-benefits.

This study contributes to the literature by comprehensively examining IFPs in terms of both assets and financing products. In addition, IFL is measured in an all-inclusive way, covering different dimensions of knowledge related to Islamic savings, investments, protection and financing.

The purpose of this paper is to empirically examine the perception of Islamic bank employees in Malaysia and selected Gulf Cooperation Council (GCC) countries, namely, Bahrain, Oman and the UAE, on various issues related to Islamic business ethics and the practices of the Islamic banks at which they work.

The required data to determine Islamic bank employees’ ethical perceptions is sourced from 144 completed survey questionnaires and interviews with 12 Islamic bank senior executives. Islamic model of normative business ethics is used to measure the relationship between attitudes and behaviours of employees and the ethical practices of Islamic banks.

Results show that the Islamic bank personnel working in Malaysia and the GCC perceived that their banks conform to Islamic ethical norms in business. These banks were seen to be concerned with their impact on society, and ethics prevailed over profit-maximisation. The findings also suggest that despite being less regulated compared to Malaysia, Islamic bank personnel in GCC had a better impression of the ethical standard practised in their institutions compared to the feedback given by their Malaysian counterparts. Additionally, this research also proves that, in general, there is a positive correlation between attitudes and behaviours of employees and the ethical practices of Islamic banks.

The main limitation of the study is that the respondents were not selected randomly but rather through a convenient sampling of personal contacts. Despite the inherent limitation of the sampling method because of the constraints of time and resources, the large number of respondents from 12 different banks are representative of the Islamic bank employees in Malaysia and the GCC.

The findings may serve as a useful input for Islamic financial institutions in improving their practices to conform with Islamic ethical norms.

The topic of Islamic business ethics and the practices of Islamic banks have not been fully understood by its stakeholders. This paper aims to give insights on how far Islamic bank business practices in Muslim majority societies fit with the prescribed business framework in Islam and its contributing value for both the organization and employees.

The purpose of microcredit is to offer small loans to people who are not covered by traditional financial channels. It can facilitate entrepreneurship, boosting local socio-economic development and improving environmental and political factors.

This paper aims to analyse microcredit in Italy, focusing on a project based in Rione Sanità, Naples. Rione Sanità is one of the poorest areas of Southern Italy, displaying high rates of criminality and unemployment, especially among youth, women, migrants and the vulnerable. The district is renowned for its fine and ancient handicrafts, food, trade and historical heritage – potential drivers for boosting tourism in the area. Qualitative methodologies were used to collect primary data through field visits and interviews with project bankers, local businesses, artisans, associations and religious representatives, project volunteers, as well as participation at local meetings. These data were corroborated by budget analysis based on the project's accounting.

The study shows encouraging results for the project and policy prospects. Despite the tiny starting numbers, there emerges a significant potential for microcredit to spread in the district, as in Southern Italy, providing an effective strategy to combat unemployment, usury and criminality, yielding community development and favoring broad societal challenges.

With this evidence, the paper attempts to shed some light and verify the potential of microfinance projects as a driver of sustainable development and ethical finance in poor areas of developed countries.