RAM Rating says Islamic finance and responsible investing share common ground

Published on 07 Mar 2019.

RAM Rating sees Islamic finance playing a vital role in supporting the implementation of socially responsible investing (SRI, which includes environment, social and governance (ESG) matters) and funding for the United Nations’ Sustainable Development Goals (SDG). “The common philosophies with SRI serve as a bridge for Islamic finance in becoming a mainstream financing source. Thanks to the concerted efforts of market practitioners in Malaysia, Indonesia and other core Islamic finance markets, the global community is slowly but surely realising the real value and benefits of combining Islamic finance with SRI,” said Ruslena Ramli who moderated the RAMification dialogue with industry experts on 28 February 2019 hosted by RAM Ratings.

Daud Vicary (Managing Director, DVA Consulting), Najmuddin Mohd Lutfi (CEO, BIMB Investment), Ashraf Arshad (Financial Sector Specialist, World Bank) and Promod Dass (CEO, RAM Consultancy) – discussed the linkage of SRI in growing Islamic finance prominence among mainstream financial communities. During the event, Promod highlighted that awareness of SRI and/or ESG among local investors and corporates is gaining traction. The first step is a change in mindset vis-à-vis adopting the prescribed values. Daud further emphasised “This game changer will support the sustainability of how future businesses will operate and is also in line with the core objectives of Islamic finance, i.e. Maqasid Al-Shariah (protection of public interest).”