Top 10 sustainability-linked Islamic finance transactions in 2025
There has been a marked increase in sustainability-linked Islamic finance in 2025, mobilizing real capital and channeling funds into climate change mitigation and major sustainable development projects.
Unlike green financing that is exclusively used to finance or refinance new and/or existing green projects, sustainability-linked Islamic financing is designed to incentivize the borrower's achievement of ESG (environmental, social, or governance) targets through pricing incentives.
A borrower’s performance is measured using sustainability performance goals, benefitting on achieving targets or facing financial repercussions otherwise. This adds an additional layer of accountability that values impact than intent.
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Youshey Zakiuddin