Development and evaluation of Islamic green financing: A systematic review of green sukuk
-
DOIhttp://dx.doi.org/10.21511/ee.14(1).2023.06
-
Article InfoVolume 14 2023, Issue #1, pp. 61-72
- Cited by
- 1066 Views
-
239 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
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.
- Keywords
-
JEL Classification (Paper profile tab)G19, Q56, R11
-
References63
-
Tables2
-
Figures1
-
- Figure 1. Publication trends about green sukuk by year
-
- Table 1. Green sukuk synthesis in model development and opportunity
- Table 2. Green sukuk synthesis in challenge and evaluation
-
- Abakah, E. J. A., Tiwari, A. K., Adekoya, O. B., & Oteng-Abayie, E. F. (2023). An analysis of the time-varying causality and dynamic correlation between green bonds and US gas prices. Technological Forecasting and Social Change, 186(A), 122134.
- Abdullah, M. S., & Keshminder, J. S. (2022). What drives green sukuk? A leader’s perspective. Journal of Sustainable Finance and Investment, 12(3), 985-1005.
- Abubakar, L., & Handayani, T. (2020). Green sukuk: Sustainable financing instruments for infrastructure development in Indonesia. Proceedings of the 1st Borobudur International Symposium on Humanities, Economics and Social Sciences (BIS-HESS 2019) (pp. 983-987).
- Alam, N., Duygun, M., & Ariss, R. T. (2016). Green sukuk: An innovation in Islamic capital markets. In A. Dorsman, Ö. Arslan-Ayaydin, & M. Karan (Eds.), Energy and Finance: Sustainability in the Energy Industry (pp. 167-185). Springer International Publishing.
- Alsmadi, A. A., & Alzoubi, M. (2022). Green economy: Bibliometric analysis approach. International Journal of Energy Economics and Policy, 12(2), 282-289.
- Arsandrie, Y., & Widayanti, E. (2018). Perhitungan ruang terbuka hijau di kecamatan Kartasura Sukoharjo berdasarkan luas wilayah, jumlah penduduk, dan kebutuhan O2 [Calculation of green open space in Kartasura Sukoharjo district based on area, total population, and O2 needs]. Jurnal Arsitektur, 15(2), 93-98. (In Indonesian).
- Atkinson, L. Z., & Cipriani, A. (2018). How to carry out a literature search for a systematic review: A practical guide. BJPsych Advances, 24(2), 74-82.
- Barricelli, B. R., Cassano, F., Fogli, D., & Piccinno, A. (2019). End-user development, end-user programming and end-user software engineering: A systematic mapping study. Journal of Systems and Software, 149, 101-137.
- Cheong, C., & Choi, J. (2020). Green bonds: A survey. Journal of Derivatives and Quantitative Studies, 28(4), 175-189.
- Cortellini, G., & Panetta, I. C. (2021). Green bond: A systematic literature review for future research agendas. Journal of Risk and Financial Management, 14(12), 589.
- Dervi, U. D. (2021). A bibliometric review of green financing, implication for Islamic Finance (Unpublished Master’s Thesis). Institute of Business Administration Karachi.
- Ehlers, T., & Packer, F. (2017). Green bond finance and certification. BIS Quarterly Review, 89-104.
- Fadzlurrahman, F., & Abubakar, L. (2019). Pengalokasian risiko dalam pembiayaan proyek berbasis sukuk guna mewujudkan kemudahan berusaha [Allocation of risks in sukuk-based project financing to realize ease of doing business]. Jurnal Jurisprudence, 9(2), 133-148. (In Indonesian).
- Fatchurrohman, F. (2006). Consumerism dan perlindungan konsumen [Consumerism and consumer protection]. Jurnal Benefit, 10(2), 155-163. (In Indonesian).
- Fathihani, J. S., Haat, M. H. C., Yusliza, M. Y., Muhammad, Z., & Bon, A. T. (2021). A review of sustainable green finance literature: Mini-review approach. Proceedings of the International Conference on Industrial Engineering and Operations Management (pp. 3194-3207). Singapore.
- Fitrah, R., & Soemitra, A. (2022). Green sukuk for sustainable development goals in Indonesia: A literature study. Jurnal Ilmiah Ekonomi Islam, 8(1), 231-240.
- Gilchrist, D., Yu, J., & Zhong, R. (2021). The limits of green finance: A survey of literature in the context of green bonds and green loans. Sustainability, 13(2), 478.
- Güçlü, F. (2019). The rise of environmental consciousness in Islamic finance: Green sukuk. In Handbook of Energy and Environment Policy (pp. 245-259). Peter Lang AG.
- Hoshen, M. S., Hasan, N., Hossain, S., Abdullah, M., Sabuj Hoshen, M., Hasan, M. N., Al Mamun, A., Mannan, A., & Al Mamun, M. A. (2017). Green financing: An emerging form of sustainable development in Bangladesh. IOSR Journal of Business and Management (IOSR-JBM), 19(12), 24-30.
- Karim, S., & Naeem, M. A. (2022). Do global factors drive the interconnectedness among green, Islamic and conventional financial markets? International Journal of Managerial Finance, 18(4), 639-660.
- Karina, L. A. (2019). Peluang dan tantangan perkembangan green sukuk di Indonesia [Opportunities and challenges in the development of green sukuk in Indonesia]. Conference on Islamic Management Accounting and Economics, 2, 259-265. (In Indonesian).
- Keshminder, J. S., Abdullah, M. S., & Mardi, M. (2022). Green sukuk – Malaysia surviving the bumpy road: Performance, challenges and reconciled issuance framework. Qualitative Research in Financial Markets, 14(1), 76-94.
- Keshminder, J. S., Singh, G. K. B., Wahid, Z. A. B., & Abdullah, M. S. (2019). Green sukuk: Malaysia taking the lead. Malaysian Journal of Consumer and Family Economics, 22(2), 1-22.
- Khamis, M. A., & Nobanee, H. (2021). Green financing: A literature review. Abu Dhabi University.
- Lanzara, F. (2021). Islamic finance and sustainable development goals. A bibliometric analysis from 2000 to 2021. European Journal of Islamic Finance, 18, 1-19.
- Liberati, A., Altman, D. G., Tetzlaff, J., Mulrow, C., Gøtzsche, P. C., Ioannidis, J. P. A., Clarke, M., Devereaux, P. J., Kleijnen, J., & Moher, D. (2009). The PRISMA statement for reporting systematic reviews and meta-analyses of studies that evaluate health care interventions: Explanation and elaboration. Journal of Clinical Epidemiology, 62(10), E1-E34.
- Liu, F. H. M., & Lai, K. P. Y. (2021). Ecologies of green finance: Green sukuk and development of green Islamic finance in Malaysia. Environment and Planning A: Economy and Space, 53(8), 1896-1914.
- Malhotra, G., & Thakur, K. (2020). Evolution of green finance: A bibliometric approach. Gedrag & Organisatie Review, 33(2), 583-594.
- Ministry of Finance of the Republic of Indonesia. (2019). Public finance for climate change in Indonesia 2016–2018. Fiscal Policy Agency, Ministry of Finance.
- Molina-Azorín, J. F., Claver-Cortés, E., López-Gamero, M. D., & Tarí, J. J. (2009). Green management and financial performance: A literature review. Management Decision, 47(7), 1080-1100.
- Morea, D., & Poggi, L. A. (2017). An innovative model for the sustainability of investments in the wind energy sector: The use of green sukuk in an Italian case study. International Journal of Energy Economics and Policy, 7(2), 53-60.
- Muchtar, A. T., Amelia, L., Dachlan, A. N., Nur, A. I., & Bastari, G. R. (2012). Literature study on climate change financing in Indonesia: Mapping sources, distribution mechanisms, and beneficiaries of climate change-related funds. The Indonesian Institute Center for Public Policy Research.
- Mujizat, D. A. (2021). The sovereign green sukuk: An analysis of its process and barriers to funding renewable energy projects in Indonesia (Master’s Thesis). Uppsala University.
- Narayan, P. K., Rizvi, S. A. R., & Sakti, A. (2022). Did green debt instruments aid diversification during the COVID-19 pandemic? Financial Innovation, 8(1), 21.
- Ntsama, U. Y. O., Yan, C., Nasiri, A., & Mboungam, A. H. M. (2021). Green bonds issuance: Insights in low- and middle-income countries. International Journal of Corporate Social Responsibility, 6(1), 2.
- Oktasari, D. P., Jamaludin, N., Saputra, J., Yusliza, M. Y., Muhammad, Z., & Bon, A. T. (2021). Green transformation and finance literature: A mini-review approach. In Proceedings of the International Conference on Industrial Engineering and Operations Management (pp. 3302-3315). Singapore.
- Oktaviani, Y., Rangkuti, K., Pyan Putro Surya, A. M., & Puspita, A. (2018). Financial solutions for biodiversity in contributing to the economic development in Indonesia. E3S Web of Conferences, 74.
- Ozili, P. K. (2022). Green finance research around the world: A review of literature. International Journal of Green Economics, 16(1).
- Page, M. J., McKenzie, J. E., Bossuyt, P., Boutron, I., Hoffmann, T. C., Mulrow, C. D., Shamseer, L., Tetzlaff, J. M., Akl, E., Brennan, S. E., Chou, R., Glanville, J., Grimshaw, J. M., Hróbjartsson, A., Lalu, M. M., Li, T., Loder, E. W., Mayo-Wilson, E., McDonald, S., … & Moher, D. (2021). The prisma 2020 statement: An updated guideline for reporting systematic reviews. Medicina Fluminensis, 57(4), 444-465.
- Paltrinieri, A., Hassan, M. K., Bahoo, S., & Khan, A. (2023). A bibliometric review of sukuk literature. International Review of Economics and Finance, 86, 897-918.
- Purnamawati, I. (2013). Perbandingan sukuk dan obligasi (Telaah dari perspektif keuangan dan akuntansi) [Comparison of sukuk and bonds (A review from a financial and accounting perspective)]. Jurnal Akuntansi Universitas Jember, 11(1), 62-71. (In Indonesian).
- Raeni, R., Thomson, I., & Frandsen, A.-C. (2022). Mobilising Islamic funds for climate actions: From transparency to traceability. Social and Environmental Accountability Journal, 42(1-2), 38-62.
- Rahman, M., Isa, C. R., Tu, T.-T., Sarker, M., & Masud, M. A. K. (2020). A bibliometric analysis of socially responsible investment sukuk literature. Asian Journal of Sustainability and Social Responsibility, 5(1), 7.
- Rani, L. N., Laila, N., Filianti, D., & Ramadani, D. W. (2022). Analysis of sukuk research in Indonesia bibliometric approach. Al-Muzara’ah, 2022(Special Issue), 43-56.
- Rapi, K., Maisarah, S., Rambe, S. A. F., Chandra, W., & Rahmana, A. (2021). Green Finance for the era of post COVID-19: A systematic literature. Advances in Economics, Business and Management Research, 198, 190-195.
- Rohman, R. S. (2017). The prospect implementation of green bond toward green sukuk in Indonesia. Universitas Islam Indonesia.
- Saleem, M., & Khan, M. U. (2021). Green finance for sustainable development: A bibliometric review of current status, development and prospects. International Journal of Advanced Research in Commerce, Management & Social Science (IJARCMSS), 4(4), 1-9.
- Santoso, I. R. (2020). Green sukuk and sustainable economic development goals: Mitigating climate change in Indonesia. Global Journal Al-Thaqafah, 10(1), 18-26.
- Sial, M. S., Cherian, J., Meero, A., Salman, A., Rahman, A. A. A., Samad, S., & Negrut, C. V. (2022). Determining financial uncertainty through the dynamics of sukuk bonds and prices in emerging market indices. Risks, 10(3), 61.
- Siswantoro, D. (2018). Performance of Indonesian green sukuk (Islamic bond): A sovereign bond comparison analysis, climate change concerns? IOP Conference Series: Earth and Environmental Science, 200(1), 012056.
- Siswantoro, D., & Surya, H. V. (2021). Indonesian Green Sukuk (Islamic Bond) of climate change: A revisited analysis. IOP Conference Series: Earth and Environmental Science, 716(1), 012044.
- Suherman, Noor, I., & Manzilati, A. (2019). Identifikasi potensi pasar green sukuk Republik Indonesia [Identification of Republic of Indonesia’s green sukuk market potential]. Human Falah: Jurnal Ekonomi Dan Bisnis Islam, 6(1), 37-53. (In Indonesian).
- Suroso, D. S. A., Setiawan, B., Pradono, P., Iskandar, Z. S., & Hastari, M. A. (2022). Revisiting the role of international climate finance (ICF) towards achieving the nationally determined contribution (NDC) target: A case study of the Indonesian energy sector. Environmental Science and Policy, 131, 188-195.
- Triandini, E., Jayanatha, S., Indrawan, A., Werla Putra, G., & Iswara, B. (2019). Metode systematic literature review untuk identifikasi platform dan metode pengembangan sistem informasi di Indonesia. Indonesian Journal of Information Systems, 1(2), 63-77. (In Indonesian).
- Uluyol, B. (2021). A comprehensive empirical and theoretical literature survey of Islamic bonds (sukuk). Journal of Sustainable Finance and Investment.
- Vale, J., Amaral, J., Abrantes, L., Leal, C., & Silva, R. (2022). Management accounting and control in higher education institutions: A systematic literature review. Administrative Sciences, 12(1), 14.
- Verma, A., & Agarwal, R. (2020). A study of green bond market in India: A critical review. IOP Conference Series: Materials Science and Engineering, 804(1), 012052.
- Verma, R. K., & Bansal, R. (2023). Stock market reaction on green-bond issue: Evidence from Indian green-bond issuers. Vision, 27(2), 264-272.
- Wiyadi, W. (2015). Pengaruh implementasi strategi pemasaran hijau dan karakteristik konsumen terhadap pilihan produk (Studi empiris pada konsumen AMDK di Surakarta) [The influence of implementation of green marketing strategy and consumers on product choice (Empirical study on AMDK consumers in Surakarta)]. BENEFIT: Junal Managemen Dan Bisnis, 19(2), 168-180. (In Indonesian).
- Yu, X., Mao, Y., Huang, D., Sun, Z., & Li, T. (2021). Mapping global research on green finance from 1989 to 2020: A bibliometric study. Advances in Civil Engineering, 2021, 9934004.
- Zhang, D., Zhang, Z., & Managi, S. (2019). A bibliometric analysis on green finance: Current status, development, and future directions. Finance Research Letters, 29, 425-430.
- Zhang, Z., Liu, Y., Han, Z., & Liao, X. (2022). Green finance and carbon emission reduction: A bibliometric analysis and systematic review. Frontiers in Environmental Sciences, 10, 1-17.
- Ziabina, Y., & Pimonenko, T. (2020). The green deal policy for renewable energy: A bibliometric analysis. Virtual Economics, 3(4), 147-168.