Keywords
Sovereign Green Sukuk
Corporate Green Sukuk
How to Cite
Abstract
This paper explores the evolution of Green Sukuk in Indonesia, detailing its development, fund utilization, and best practices. Green sukuk is an important instrument in addressing environmental and sustainability issues with Islamic principles. Indonesia is the first country to issue the sovereign green sukuk with remarkable development in global, retail, and project-based green sukuk. Indonesia issued its first corporate green sukuk in 2024 by Bank Syariah Indonesia. The study provides a comprehensive review of literature on sustainable finance, highlighting key features of Green Sukuk. It also examines Indonesia’s strategic frameworks and policies that have facilitated the growth and success of Green Sukuk. The findings show that Indonesia has limited corporate green sukuk. To boost the corporate green sukuk, there needs to be education and incentives by the government for the potential issuers to motivate them to issue the green sukuk. Moreover, Indonesia needs to establish partnerships with many international and local institutions to align the green bond framework with the international framework. By doing so, the green sukuk of Indonesia can be more internationally accepted, this way can boost the international capital to be invested in Indonesia.
References
Abdullah, D. V., & Chee, K. (2010). Islamic Finance: Why it Makes Sense>. Marshall Cavendish Corp/Ccb.
Abdullah, N. and Nayan, M.A. (2020), “Green sukuk: financing the future to sustainable environment”, IJZIP: International Journal of Zakat and Islamic Philanthropy, Vol. 2 No. 2, pp. 2672-7471.
Abdullah, M., & Keshminder, J. (2022). What drives green sukuk? A leader’s perspective. Journal of Sustainable Finance & Investment , 12(3), 985-1005. Doi:https://doi.org/10.1080/20430795.2020.1821339
Abubakar, L., & Handayani, T. (2020, May). Green sukuk: Sustainable financing instruments for infrastructure development in Indonesia. In 1st Borobudur International Symposium on Humanities, Economics and Social Sciences (BIS-HESS 2019) (pp. 983-987). Atlantis Press.
Alam, N., Duygun, M., & Aris, R. T. (2016). Green Sukuk: An Innovation in Islamic Capital Market. Energy and Finance. Doi:https://doi.org/10.1007/978-3-319-32268-1_10
Ali, S. S., & Nisar, S. (2010). Islamic Finance: Principles and Practices. Islamic Development Bank.
Alkadi, R. S. (2024). Towards a sustainable future: a comprehensive review of Green Sukuk. Review of Accounting and Finance.
Basov, S., & Bathi, M. I. (2016). Islamic Finance in the LIght of Modern Economic Theory. Springer.
Bassot, B. (2022). Doing Qualitative Desk-Based Research; A Practical Guide to Writing an Excellent Dissertation. UK: Bristol University Press.
Brahim, C.T. (2018), “The role of green Islamic sukuk to the promotion of sustainable development objectives”, Journal of the New Economy, Vol. 01, pp. 186-207.
Burhan, F. A. (2024). Sukuk ESG BSI (BRIS) Dipesan Rp9 Triliun, Digunakan untuk Kredit Lingkungan. https://hijau.bisnis.com/read/20240605/653/1771279/sukuk-esg-bsi-bris-dipesan-rp9-triliun-digunakan-untuk-kredit-lingkungan
Delle Foglie, A. and Keshminder, J.S. (2022), “Challenges and opportunities of SRI sukuk toward financial system sustainability: a bibliometric and systematic literature review”, International Journal of Emerging Markets.
Dey, D., Hussain, T. and Hauman, M. (2016), Green Bonds and Islamic Finance, White and Case, New York, NY.
Endri, E., Hania, B. T., Endri, E., & Hania, B. T. (2022). Corporate green Sukuk issuance for sustainable financing in Indonesia. Environmental Economics, 13(1). https://doi.org/10.21511/ee.13(1).2022.04
Hania, B. T. (2022). Identify the Issuance Problem of Corporate Green Sukuk in Indonesia. Islamic Economics Journal, 8(2). https://doi.org/10.21111/iej.v8i2.8404
Hanic, A. and Smolo, E. (2023), “Islamic approach to corporate social responsibility: an international model for Islamic banks”, International Journal of Islamic and Middle Eastern Finance and Management, Vol. 16 No. 1, pp. 175-191.
Hossain, G.M.S. (2020), “Predicting corporate green sukuk rating, Hamad bin Khalifa university”, available at: https://search.proquest.com/openview/6f63f2da402b916f4ccd2e16c0dfc317/1?pqorigsite¼gscholar&cbl¼2026366&diss¼y
Ibrahim, M., Ruslan, R., & Yen, T. (2021). Food marketing: the influence of organic greenwash towards malaysian consumers' trust: a conceptual paper. Advances in Business Research International Journal, 7(1), 135. https://doi.org/10.24191/abrij.v7i1.13273
IIFM (2022), IIFM Sukuk Report: A Comprehensive Study of the Global Sukuk Market, International Islamic Financial Market, Manama, Kingdom of Bahrain
INDONESIA’S GREEN BOND & GREEN SUKUK INITIATIVE MINISTRY OF FINANCE REPUBLIC OF INDONESIA. (n.d.). https://climatepromise.undp.org/sites/default/files/research_report_document/undp-ndcsp-green-sukuk-share.pdf
Indonesia's Ministry of Finance. (2023). GREEN SUKUK Allocation and Impact Report 2023. https://api-djppr.kemenkeu.go.id/web/api/v1/media/B56006C3-5D62-4DDD-87DA-2F06FAF19FCA. Retrieved June 7, 2024.
Indonesia's Ministry of Finance. (n.d.). The Republic of Indonesia Green Bond and Green Sukuk Framework. https://api-djppr.kemenkeu.go.id/web/api/v1/media/B51F74A2-F8BF-47C7-A77F-DA48C2D33067. Retrieved June 7, 2024.
Iqbal, Z., & Mirakhor, A. (2012). An Introduction to Islamic Finance: Theory and Practice. Wiley Online Library. doi:DOI : 10.1002/9781118390474.
Isa, B., Buba, A., & Ali, A. U. (2022). Prohibition of Riba in Islam: An Overview from the Qur’an and Hadith. Journal of Arabic and Islamic Studies.
Kamali, M. H. (2008). Shari'ah Law: An Introduction. Oneworld Publications.
Katadata. (2023, November 22). Ini Alokasi Kumulatif Distribusi Green Sukuk di Indonesia 2018-2020. https://databoks.katadata.co.id/datapublish/2023/11/22/ini-alokasi-kumulatif-distribusi-green-sukuk-di-indonesia-2018-2020. Retrieved June 7, 2024.
Keshminder, J.S., Abdullah, M.S. and Mardi, M. (2022), “Green sukuk – Malaysia surviving the bumpy road: performance, challenges and reconciled issuance framework”, Qualitative Research in Financial Markets, Vol. 14 No. 1, pp. 76-94.
Liu, F. H., & Lai, K. P. (2021). Ecologies of Green Finance: Green Sukuk and development of green Islamic Finance in Malaysia. EPA: Economy and Space, 53(8), 1896–1914. doi:DOI: 10.1177/0308518X211038349
Mensink, B. J., Loos, B. P., & Linders, J. B. (1998). Data Evaluation and Environmental Risk Assesment : a Desk Study. The Netherlands: National Institute of Public Health and The Environment.
Moghul, U., & Safar-Aly, S. (2015). Green Sukuk: The Introduction of Islam's Environmental Ethics to Contemporary Islamic Finance. Georgetown International Environmental Law Review (GIELR), 27(1). Retrieved from https://ssrn.com/abstract=2580864
NTG. (2019). Desk Research Summary on the Future of Digital, Green and Social in Tourism. Next Tourisn Generation Skills Alliance.
Putri, J. D., Paramesti, Z., & Ramadhan, M. F. (2022, October). Verses and Hadiths of Riba Prohibition. JIIS: Journal of Indonesian Islamic Studies, 2(1), 1-11.
RLUG (2022), Green and Sustainability Sukuk Report 2022: financing a Sustainable Future, Refinitiv, London Stock Exchange, UKIFC, and GEFI, London
Roslen, S.N.M., Sahlan, L.A.B. and Mary, P. (2021), “Yield behavior of green SRI sukuk”, Global Business and Management Research, Vol. 13 No. 4, pp. 127-138.
THE REPUBLIC OF INDONESIA GREEN BOND AND GREEN SUKUK FRAMEWORK. (n.d.). Retrieved June 6, 2024, from https://api-djppr.kemenkeu.go.id/web/api/v1/media/B51F74A2-F8BF-47C7-A77F-DA48C2D33067
UKIFC (2021), Innovation in Islamic Finance: Green Sukuk for SDGs, The UK Islamic Finance Council, Edinburgh
UNDP. (2021). Innovation in Islamic Finance: green sukuk for SDGs. https://www.undp.org/indonesia/publications/innovation-islamic-finance-green-sukuk-sdgs
Witjaksono, B., Gunawan, I., Anggraini, E., Harto, P. P., Wibowo, H., & Suprapto, E. (2020). Apa & Bagaimana Investasi Keuangan Haji BPKH. Badan Pengelola Keuangan Haji.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Copyright (c) 2024 Fauziyah Adzimatinur, Rahmat Olii, Dea Fajria Tatarizqa Japal