Over the past few years, the Islamic finance sector has experienced tremendous growth due to increased consumer interest in ethical banking and financial services. ESG refers to Environmental, Social and Governance: non-financial principles that are increasingly being applied to financial operations in order to create a more sustainable, equitable future. Sharia loans experts at Hejaz Financial Services report that as the sector continues to develop, the industry is looking to incorporate ESG factors into future forecasts and planning.
Recent consumer research reveals that around 73 percent of Islamic banking and Halal finance customers believe that the Islamic finance market could be doing more to meet the need and demand for ESG financial strategies.
Sharia-compliant financial services are based on principles of morality, says Hejaz Financial Services' Chief Operating Officer, Muzzammil Dhedhy. These principles dictate the industries in which money is invested, the way Halal loans operate and more. A core pillar of Islamic finance is to screen Sharia-compliant products to avoid industries deemed unlawful under Islamic guidance and law, such as tobacco, alcohol, weapons and gambling. The Sharia loans experts point out that these areas are theoretically also prohibited in ESG investing.
While the two concepts do not always overlap, this is changing as financial institutions respond to market demand. Hejaz Financial Services explains there has been a rise in innovatively structured solutions allowing for exposure to certain ESG investments that may not otherwise be Sharia-compliant.
Hejaz Financial Services says there is still work to do though when it comes to persuading potential investors to choose ethical investments. Breaking down cultural barriers and providing better financial education will allow Muslims to make informed decisions and participate more in financial markets while broadening the appeal of Islamic finance to the wider market.
To find out more about Halal loans and Sharia-compliant financial products and services available in Australia, contact the Halal home loan experts at Hejaz Financial Services today. For more details, call us now at 1300 043 529.
Press Release Service by Newswire.com
Original Source: Global Islamic Finance Sector Prioritises ESG Concerns