“Development and evaluation of Islamic green financing: A systematic review of green sukuk”

The threat of the global climate crisis demands improvement and adjustment from various sides, including the financial sector. Islamic finance responds to environmental responsibility by presenting environmentally friendly financing products in green sukuk. This study aims to show the development trend of the number of publications in green sukuk and systematize the results of studies that explain the development and evaluation of the emergence of green sukuk investments. This study analyzed 15 publications on green sukuk during the 2016-2022 years indexed by the Scopus database. As for methodology, the descriptive analysis was used to explain the green sukuk data quantitatively; the synthesis analysis was used to describe data based on four directions (the development of models (10 sources), opportunities (12 sources), challenges (12 sources), and evaluations of green sukuk (10 sources). Preferred Reporting Items for Systematic Review and Meta-Analyses standard were used to choose samples for this investigation. The green sukuk challenge is dealing with the sukuk market after the pandemic. Several evaluation findings regarding managing commitment from the government and investors for the renewable energy sector and efforts to provide low-cost sukuk financing and risk minimization are found. Green sukuk demands efficient management to be more viable, competitive, and attractive to investors if the operational area supports it. Green sukuk projects face expanding green funding, global climate financing, managing renewable energy, and validating greenhouse gas emissions. The green stock market reaction requires coordination amongst economic subsectors.


INTRODUCTION
Climate change has a negative impact on development and is increasing global inequality.All developed and emerging emitters must reduce their emissions and prepare for the implications of climate change (Suroso et al., 2022).With declining environmental quality, rising social disparity, and climate change, international events focused on environmental viability and health (Arsandrie & Widayanti, 2018; Karina, 2019).Climate change complicates everything.Longterm climate change will stress and test development because it consumes resources from people, firms, and governments that should have been used for development (Suherman et al., 2019).In financing climate change issues, a country needs to prepare many varied financing sources, both domestic and foreign (Muchtar et al., 2012).Environmental preservation has penetrated economic fields such as green marketing and environmentally friendly consumption behavior (Fatchurrohman, 2006;Wiyadi, 2015).
The basic purpose of the Islamic financial sector is to accomplish long-term benefits and always be within activities that benefit the people (Karina, 2019).Due to environmental contamination and damage, the Islamic finance industry based on the environment and sustainable development is anticipated to be one of the societal solutions (Purnamawati, 2013).The Islamic bond, often known as a sukuk, is one of the most recently developed financial instruments (Fadzlurrahman & Abubakar, 2019;Sial et al., 2022).Sukuk has become a crucial tool for raising funding in global financial markets via Sharia-compliant arrangements (Rani et al., 2022).
With increasing global action on climate change, green finance, such as green sukuk, is receiving significant attention in the recent literature (Zhang et al., 2019).Green sukuk investment products still have many development limitations and need evaluation to see the improvement gaps.Given the importance and great potential for green sukuk, this study answers how much can be known about green sukuk in terms of development trends in the number of publications, opportunities for development, and evaluation.

LITERATURE REVIEW
Green finance advocates integrating environmentally responsible company practices and financial decision-making (Hoshen et al., 2017).Green bonds are a type of fixed-income security that can be taxed or exempt from taxation depending on whether the funds raised are used for environmentally friendly or sustainable projects (Ehlers & Packer, 2017).Green bonds work the same way as conventional bonds in pricing, rating, processing, and execution (Abakah et al., 2023;Dervi, 2021).Following the Paris Agreement on Climate Change terms from 2015, the green bond market is anticipated to emerge soon.Green bonds are among the most commonly used sustainable investment tools (Cortellini & Panetta, 2021).The difference is that conventional bonds aim to obtain loans as additional capital followed by interest or returns for the investor within a predetermined period.In contrast, green bonds focus more on raising investment funds for environmentally friendly projects.
On the other hand, green sukuk is an innovation from the sukuk itself.It uses Sharia principles; funds from investors or companies are allocated to develop halal and environmentally friendly products (Rohman, 2017).Several sustainable and environmentally friendly development could be projects such as biogas generators, wind farms, solar energy, inland/marine waste management, ecosystem or natural resource management efficiency agriculture, construction of energy-efficient buildings, and other similar businesses that benefit the natural environment or reduce the risk of change climate problems such as global warming (Dervi, 2021;Karina, 2019).
Since 2016, the Indonesian Ministry of Finance has begun budget execution for initiatives to mitigate the effects of climate change and adapt to them through green sukuk funds (Ministry of Finance of the Republic of Indonesia, 2019).In addition, the government of Indonesia has also issued green sukuk, which have received a medium green rating from the Center for International Climate and Environmental Research (CICERO) (Ministry of Finance of the Republic of Indonesia, 2019).The study revealed that the study on SRI Sukuk greatly collaborates between Malaysia, Australia, and the United States, but the numbers are small.Uluyol (2021) considered five different parts of Sukuk.It is possible to gain a comprehensive understanding of sukuk by focusing on the following five primary areas:

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1) the structural and fundamental differences between conventional bonds and Islamic bonds; 2) empirical research on sukuk; 3) the choice between issuing conventional bonds or sukuk; 4) Sharia and sukuk legal issues; and 5) the pricing of sukuk (Uluyol, 2021).
Based on the literature survey, most of the research on sukuk has been done through empirical studies, while basic research on sukuk has been mostly ignored.The USD green bond may closely track the EUR index against USD.Since investors are profit-driven, climate change may be ignored.Discussing investor green quality issues will be intriguing (Siswantoro & Surya, 2021).
This paper aims to study and systematize publications about green sukuk during 2016-2022 to explain the emergence and development of green sukuk investments.

RESULTS
The descriptive analysis explains the study of green sukuk data quantitatively by year.Figure 1 presents a graph depicting the increase in the number of publications on research about green sukuk over time.Study on green sukuk shows an increase in the number starting in 2018 and 2019, but in 2020 it decreased.In 2021 and 2022, studies on green sukuk increased, and there is a peak number of publications of 5 articles, which is predicted to continue to increase.
The synthesis analysis explains the study of green sukuk data qualitatively based on the development of models, opportunities, challenges, and evaluations of green sukuk.In the developing aspect, the research model conducted by Morea and Poggi (2017) using analytical methods with indicators such as net present value (NPV), internal rate of return (IRR), weighted average cost of capital (WACC), annual debt service cover ratio (ADSCR), and annual loan life cover ratio (ALLCR).Morea and Poggi (2017) show that using Islamic finance leads to better bankability signs, bringing the current situation closer to a state where a project can be profitable.
A thorough analysis of the prior research pertinent to this subject was carried out as part of this study.This method can, in addition to contribut- ing to the achievement of the goal of this study, demonstrate the extent to which the research has been conducted and give an overview of the areas in which the research differs from previous efforts and calls for a greater level of discipline.In addition, this inquiry was outfitted with the PRISMA (Preferred Reporting Items for Systematic Review and Meta-Analyses) standard, which was used to choose samples for this investigation.
The literature on green sukuk can be divided into four main themes: development models, opportunities, challenges, and evaluation of existing products from green sukuk, as illustrated in Tables 1 and 2. Various researchers developed various approaches to making product models from green sukuk.For example, Morea  A study on the development and opportunities of green sukuk has more influence on green finance and domestic and global Islamic financial markets.Green sukuk has limitations in the financial accounting system and GHG (greenhouse gases) valuation.This deficiency in its management necessitates the establishment of a new accounting object that provides a granular link between financial data and GHG accounting.The current accounting system is reused by developing a green sukuk accounting object, which tries to link the equal dispersal of money with social and environmental advantages, most prominently represented by emission reductions in greenhouse gases (Raeni et al., 2022).
Opportunities from green sukuk are more domiby biodiversity and climate change and involve government projects to achieve the SDGs agenda.A green sukuk study would be more fascinating if it included sukuk issuers and sukuk experts from other green sukuk-dominant nations to quantify the hurdles and comprehend the government's activities to assure resilience growth in the sukuk market.Future studies are anticipated to generate findings that can be used to create a comprehensive growth framework for green sukuk that can be adopted internationally to stimulate more green funding to address environmental challenges (Narayan et al., 2022).
A study on research facing issues and assessments in the green sukuk market is focused on finding solutions to difficulties in identifying green assets, managing the renewable energy sector, and the GHG energy validation procedure.The green stock market reaction further requires cooperation between different sectors of the economy.Investors and businesses are responsible for promoting sustainable development and the use of renewable energy, as well as enhancing the quality of existing green assets for the benefit of current and future generations.This condition can be accomplished by issuing green bonds with strong brand values tied to eco-friendly projects (Verma & Bansal, 2023).

CONCLUSION
This study aims to show the development trend of the number of publications in green sukuk and systematize the results of studies that explain the development and evaluation of the emergence of green sukuk investments.This study obtained documents regarding green sukuk from 2016 to 2022.Downloads were carried out by taking the abstracts of each article.15 publications were final numbers to be analyzed.Green sukuk studies are improving in the number of articles from year to year, and it peaked at five articles in 2021 and 2022.
Green sukuk literature covers development methods, opportunities, obstacles, and product evaluation.
Researchers created green sukuk product models in various ways, including net present value analysis and multivariate regression model for green sukuk.Green sukuk research on possibilities and development emphasizes ecologically friendly and sustainable initiatives.These studies also examined the response of financial market agents, competitiveness, and worldwide demand for green sukuk products.Evaluation of green sukuk can be pointed at the vagueness and fragment commitment to green sukuk principles.A green sukuk study would be more interesting if it included issuers and experts from other green sukuk-dominant nations to quantify the challenges and understand the government's actions to ensure resilience growth in the market: green sukuk issuers and specialists.
Future studies should produce a comprehensive growth strategy for green sukuk that may be implemented internationally to increase green funding to address environmental issues.Research must address concerns in identifying green assets, managing the renewable energy sector, and validating GHG energy.The green stock market reaction necessitates more economic collaboration than what existed.
-Azorín et al. (2009) conducted a literature study on the positive influence of green management on financial performance.Malhotra and Thakur (2020) and Zhang et al. (2019) also carried out bibliometric studies, showing the development of green finance studies.Whereas Cheong and Choi (2020) surveyed the latest literature on green bonds, and Verma and Agarwal (2020) discussed the prospects of these bonds in India.Through a literature review, Rapi et al. (2021) and Saleem and Khan (2021) identified and investigated the background and issues relevant to the opportunities for developing green finance in the future.Similarly, Cortellini and Panetta (2021) conducted an in-depth analysis of the published research on the green bond market and the role that environmentally responsible investing plays in reconfiguring financial markets and maintaining economic viability.

Figure 1 .
Figure 1.Publication trends about green sukuk by year Gilchrist et al. (2021)1)and Ozili (2022) considered that green finance is exposed to many difficulties, roadblocks, and limitations involved in implementing green finance among various parties.It is aligned withGilchrist et al. (2021), who analyzed a They found that Indonesia used green sukuk to fund green infrastructure development and recommended a legal framework for green sukuk.From prior investigations, Mujizat (2021) identified that green bonds and green sukuk financial flow hurdled to renewable energy power projects.The report also identifies two primary barriers: ministry cooperation and local government capacity.Fitrah and Soemitra (2022) showed that the green sector financed by sovereign green sukuk funds follows maqashid sharia within five aspects: protecting religion, soul, mind, offspring, and property.They also noted that investors, such as the government and the UN, are becoming more environmentally conscious, which could lead to green sukuk issuance.
(Cortellini & Panetta, 2021)west innovative products in the Islamic finance sector (Abdullah & Keshminder, 2022; Alam et al., 2016; Alsmadi & Alzoubi, 2022).Abubakar and Handayani (2020) applied normative legal analysis to green sukuk as alternative project finance for Indonesian green infrastructure devel-opment.In contrast to previous studies that used literature analysis, Alsmadi and Alzoubi (2022), Yu et al. (2021), Zhang et al. (2022), and Ziabina and Pimonenko (2020) used a bibliometric analysis that discusses green finance but has not explicitly discussed green sukuk.Many researchers have also studied sukuk literature in the form of bibliometrics and demonstrated the potential for green sukuk (Paltrinieri et al., 2023; Rahman et al., 2020).There have been several studies conducted on green sukuk.However, they were still focused on initially conceptualizing this new type of Sharia-based financing (Abubakar & Handayani, 2020; Dervi, 2021; Mujizat, 2021; Rohman, 2017; Uluyol, 2021).Given the potential suitability of green sukuk with Islamic principles(Fitrah & Soemitra, 2022) and a bright future for green bonds(Cortellini & Panetta, 2021), this study addresses a void in the existing literature by providing a comprehensive analysis of previous articles regarding green sukuk in terms of its model development, opportunities, challenges, and evaluation.

Table 1 .
Green sukuk synthesis in model development and opportunity