Industry platforms such as VBI-COP and the JC3 could potentially play a central role to ‘intermediate’ the data. As a first step, conversations between the Islamic banking and takaful operators to identify impact-driven and innovative financial solutions under VBI and VBIT, can take place to facilitate respective outreach to the underserved or unbanked population. Outside the financial sector, FIs can embark on collaborations with organisations sharing similar sustainability aspirations including state religious authorities, waqf institutions, business industry associations and advocacy groups, or non-governmental organisations who are at the heart of the vulnerable communities. For example, FIs can collaborate with government agencies and utility companies to support the consumers’ shift to energy-efficient residential homes or vehicles. Beyond the existing sustainable financial products offering preferential rates for the purchase of electric vehicles (EV) or green residential properties, more can be done to raise consumer awareness and to develop complementary infrastructure namely, charging stations. Initiatives such as the development of the VBIAF sectoral guides which are now underway for the manufacturing, construction and infrastructure, as well as oil and gas sectors, is a step in the right direction to streamline the cross-sectoral understanding of sustainability issues, thus allowing for better coordination of efforts to address sustainability risks throughout the value chain. In conclusion, it is our fervent hope that with sustainability, an innovative and collaborative mindset, we can come to develop value-driven solutions and discover new avenues for synergistic collaboration.
These, among many other incidents, are growing evidence that climate change results in more frequent extreme weather events bringing destructive consequences along with them. While causing great upheaval, the pandemic and climate crisis provide an impetus for us to reset and reprioritise resources to re-steer our economies and financial systems to be more sustainable and inclusive. Islamic finance (IF) has large potential in this space. The concept of vicegerency on earth in the Quran, which asserts mankind’s responsibility to take on ownership over preservation of wealth and resources on earth, as well as the universal values of maqasid shariah resonates well with the principles of sustainability. As such, it is not surprising that Islamic financial institutions have stepped up to meet this challenge, evidenced through the Value-based Intermediation (VBI) initiative and practices by Islamic banks and takaful operators. Consequently, as sustainability becomes a global movement, IFIs are in a position and opportunity to take stewardship and influence financial developments, both within the financial groups, sector, and the wider community. Action-oriented leadership is key and to this, I would like to highlight three attributes that would complement the role of leaders assigned to this arduous task. Firstly, leaders must have the drive to cultivate a sustainability-focused culture within the organisation. For this, leaders must set that tone from the top and more importantly, walk the talk. A clear message that needs to resonate throughout the organisation is that the transition to sustainability is a transformational journey that will deliver long-term, sustainable outcomes.