Forum spotlights future of ESG in Islamic finance

Islamic finance is well-positioned to meet the growing demand for ESG-aligned products and services, experts have said.

Standing for environmental, social and governance, ESG is a set of criteria used to evaluate the sustainability of an investment.

ESG investing is becoming increasingly popular as investors seek to align their investments with their values.

Engaging in key discussions on the future of ESG in Islamic finance, more than 300 finance leaders and sustainability and fintech experts came together during the fourth annual Islamic Finance Innovation Day (IFID) held under the patronage of the Central Bank of Bahrain (CBB).

The speakers discussed the importance of ESG as a driver for innovation and growth as well as the power of fintech to accelerate ESG adoption and help in the maximising of its benefits.

Taking place at the Gulf Hotel Bahrain Convention and Spa, with the support of lead partner Bahrain Islamic Bank (BisB) and insurance partner Solidarity, the IFID event highlighted the importance of ESG in the Islamic banking and finance industry.

Islamic finance is based on the principles of Sharia law, which prohibits investment in activities that are harmful to the environment or society.

The event also highlighted the power of fintech to accelerate the adoption of ESG in Islamic finance.

Fintech, which is the use of technology to improve financial services, can be used to make ESG investing more accessible and efficient.

For example, fintech can be used to develop new ESG-related products and services, to provide ESG data and analytics, and to make it easier for investors to track their ESG investments.

The IFID event was a valuable opportunity for industry leaders to come together and discuss the future of ESG in Islamic finance.

The event provided insights on how ESG can be used to drive innovation and growth, and the call for continued co-operation from across the industry is a positive step towards addressing the challenges of sustainability.

Launching the event was Blake Goud, chief executive at RFI Foundation, who delivered a keynote address starting off a day of high-level engagement.

Mr Goud said, “Islamic finance with tech-enabled ESG has to address practical considerations, where technology can make possible deeper analysis of companies’ ESG profile but not always in the same way as for other investors. RFI’s research shows how Sharia screens allow for more patient investment and engagement with companies to improve ESG practices to make companies more sustainable and less risky.”

The programme then featured two fireside chats with industry leaders. The first took place between Yaser Alsharifi, chief executive of BisB, and Yasmeen Al Saffar, director of research and initiatives at Bahrain Chamber where Mr Alsharifi highlighted the success of BisB and its own ongoing efforts and success in embedding ESG into its corporate culture and operations.

This was followed by a second fireside chat between Mustafa Adil, head of Islamic finance, data and analytics, London Stock Exchange Group, and Suzy Al Zeerah, chief operating officer at Bahrain FinTech Bay looking at trends influencing EGG adoption in Islamic finance, issues surrounding ‘greenwashing’ and its prevention, and the kind of ESG frameworks necessary to improve uptake across the industry and broader financial system.

The day progressed with two panel sessions, which saw engagement with audience members, on a number of topics critical to ESG adoption.

Taking part on the first panel, ‘Going Beyond Compliance – ESG as a Driver for Innovation and Sustainable Growth,’ were Yasmeen Al Sharaf, director of finTech and innovation unit at CBB; Aruna Narayanan, senior adviser for sustainability and ESG at the Partnerships Advisory; Dr Wajeeha Awadh, chief digital officer at Al Baraka Group, and Kal Subramanian, head of markets and director of advisory services for ESG, people and change management services at KPMG, Bahrain.

The second panel, ‘The Essential Role of Fintechs in Accelerating ESG Adoption’, heard from Ashar Nazim, founder and group chief executive at Aion Digital; Armand Magharian, director of business development at Finshape; Zeeba Askar, vice-president at CFA Society Bahrain and Yücel Erbilgiç, chief sales officer at Commencis.

The event closed with remarks from Mohamed Ebrahim, chief strategy and sustainability officer at BisB.

Commenting on the day’s deliberations, he said, “Today’s speakers and attendees have emphasised the importance of ESG in their own personal and corporate decisions and affirmed their desire to make a positive impact in the face of arising sustainability challenges, including climate change, social justice, corporate governance, and cyber-security and data-privacy.

Source: https://www.gdnonline.com/Details/1243071/Forum-spotlights-future-of-ESG-in-Islamic-finance