Andrea Delle Foglie and J.S. Keshminder
The main objective of this paper is to analyze works of literature on SRI sukuk to highlight the potential for these kinds of instruments in financing more sustainable financial…
Abstract
Purpose
The main objective of this paper is to analyze works of literature on SRI sukuk to highlight the potential for these kinds of instruments in financing more sustainable financial systems (SFSs). The analysis mainly accentuates a dearth of knowledge on the various challenges and opportunities in the realm of SRI.
Design/methodology/approach
This paper pioneers the bibliometric and systematic literature review of the development of the SRI sukuk from 2016 (the first available year in the field) to and 2021.
Findings
The study findings highlighted several pertinent SRI issues: the lack of standardization due to the different interpretations of Shariah and green, the lack of retail investors, which inevitably produce a lack of liquidity in the secondary market, thus limiting their growth, its funding allocation’ close resemblance to green financing, and the role of Malaysia and Indonesia as global sustainable financial hubs to stimulate the development of Shariah-compliant sustainable instruments and contribute to the international debate about the building of a global standardized framework related to sustainable investments.
Originality/value
The integration of the environmental principles of a green bond with the Shariah-compliant financial structure of a sukuk, the SRI sukuk, represents a vital crossroad in both sustainable and Islamic finance. Social-impact sukuk and green sukuk is an undervalued instrument that could play an important role in financing a more sustainable economic and financial system, including Islamic investing. This kind of instruments, which is based on a “pay for success” principle in the conventional layout, perfectly fit with the profit-and-lost sharing’s (PLS's) ethicality, the sustainability principles of Islamic finance and the religious principles of Islamic law.
Details
Keywords
J.S. Keshminder, Mohammad Syafiq Abdullah and Marina Mardi
Green sukuk is a tool to finance climate change which has garnered considerable attention. However, having only recently come into existence has its own set of challenges for this…
Abstract
Purpose
Green sukuk is a tool to finance climate change which has garnered considerable attention. However, having only recently come into existence has its own set of challenges for this tool that require immediate identification and government intervention to intensify its growth. This study aims to explore the challenges encountered by green sukuk issuers and the structure of a reconciled green sukuk issuance framework to speed up the market’s growth with the right interventions.
Design/methodology/approach
The study engaged a qualitative approach via multiple case study interviews with green sukuk issuers and used expert views for data triangulation to generate the findings. A total of four green sukuk issuers participated in the interviews, and for data triangulation purposes, four expert’s opinions and views were considered. The thematic analysis technique is used to report the findings.
Findings
It was revealed that amongst the challenges encountered in the green sukuk market are shoddy green taxonomy, difficulty in identifying green assets, it is time-consuming and costly, no compelling benefits and exposure to higher-risk profiles.
Research limitations/implications
This study may be influenced by observer error and observer bias. However, the researchers have taken cautious steps to overcome these issues by following strict case study methodology procedures and triangulating the qualitative research findings with views from green sukuk experts. These interventions increased the rigour and trustworthiness of the results.
Originality/value
This study is amongst the pioneer in Malaysia, exploring challenges in the green sukuk market. The results are relevant to governments, regulators, institutions and central banks to structure the right interventions to counter the challenges. Greater government involvement is required to strengthen the green sukuk market and to spearhead the green agenda.
Details
Keywords
Fatin Nadirah Khasni, J.S. Keshminder, Soo Cheng Chuah and T. Ramayah
Using the theory of Planned Behaviour as the basis, the study investigates the impact of attitude, subjective norm and perceived behavioural control on rehiring intention. The…
Abstract
Purpose
Using the theory of Planned Behaviour as the basis, the study investigates the impact of attitude, subjective norm and perceived behavioural control on rehiring intention. The predictors of attitude (i.e. organisational culture, risk and government incentives) and perceived behavioural control (i.e. skills and supporting documents) were examined by expanding the TPB model.
Design/methodology/approach
A self-administered survey was used to gather data from Malaysian firms hiring ex-offenders. Partial Least Squares (PLS) structural equation modelling (SEM) was used to verify the study's proposed research model's hypothesis.
Findings
The SEM analysis showed attitude and subjective norm as solid predictors of rehiring intention. For attitude, organisational culture and government incentives were proven to have an impact. Besides perceived behavioural control, the skill set was a significant predictor.
Practical implications
This study suggests that active involvement of the government to engage employers with ex-offenders through incentives (tax deductions and wage and training subsidies) and prison job fairs can increase their employment opportunities. There is also a need for formal guidelines and practices on hiring ex-offenders in organisations to promote a positive hiring culture. Establishing an employment-based re-entry unit that provides ex-offenders with various transition skill programs, such as technical skills, job search skills and life skills, is crucial for their employment prospects.
Originality/value
This study is among the pioneers in investigating ex-offenders’ rehiring agenda, specifically examining factors that influence employers' decision making. The results are relevant to managers, regulators, institutions and NGOs to structure the right interventions to ensure ex-offenders are successfully hired. It is found that Interventions aiming to increase job opportunities for ex-offenders require activities that expand community and ex-offender engagement since it reduces the social stigma and promotes more ex-offenders accepting behaviour.
Details
Keywords
Yan Putra Timur, Ahmad Ajib Ridlwan, Syazwani Abd Rahim, Khusnul Fikriyah, Fitriah Dwi Susilowati, Clarashinta Canggih, Fira Nurafini and Maryam Bte Badrul Munir
This study aims to determine the factors that influence investors’ behavioral intentions in investing in green retail sukuk through the constructs offered by the extended…
Abstract
Purpose
This study aims to determine the factors that influence investors’ behavioral intentions in investing in green retail sukuk through the constructs offered by the extended pro-environmental planned behavior (PEPB) theory and adding several other constructs such as perceived benefit (PB), perceived risk (PR) and religious value (RV).
Design/methodology/approach
Non-probability sampling was used to collect data from 460 Muslims living on Java who had invested in green sukuk retail and had a basic understanding of it as an alternative Islamic investment instrument. PLS-SEM was used to test the data with SmartPLS 3.0.
Findings
Perceived authority support (PAS) and perceived environmental concern (PEC) positively and significantly affect attitude (AT), subjective norm (SN) and perceived behavioral control (PBC). This study also shows that SN, PBC, PB, PR and RV boost INT significantly. AT has a positive but insignificant effect.
Research limitations/implications
This study has limitations from the demographic aspect of respondents who only accommodate respondents who are Muslim and live in Java Island.
Practical implications
This research suggests ways to socialize green sukuk investment to the public as potential investors by describing environmental benefits and how retail green sukuk can benefit investors and the environment. Competent parties who understand Islamic finance, and muamalah contracts can socialize beginner voters who do not understand the risks and rewards of green sukuk investments.
Social implications
This research suggests ways to socialize green sukuk investment to the public as potential investors by describing environmental benefits and how retail green sukuk can benefit investors and the environment.
Originality/value
This study introduces environmental-based constructs PAS and PEC, which are infrequently used in research models that measure the intention to invest in green investment instruments like green sukuk. Additional constructions like PB, PR and RV enhance research results.
Details
Keywords
Green sukuk (GS) is an emerging financial tool that has gained momentum in recent years owing to increased attention being given to Islamic finance, socially responsible investing…
Abstract
Purpose
Green sukuk (GS) is an emerging financial tool that has gained momentum in recent years owing to increased attention being given to Islamic finance, socially responsible investing (SRI) and sustainability agendas. Yet, GS studies are fragmented, dispersed and lack comprehensive reviews. As a response to this gap in academia, this paper aims to synthesize the knowledge on GS into thematic clusters, providing a more comprehensive understanding of the subject and offering guidelines for future research.
Design/methodology/approach
This study implemented a systematic literature review approach to analyse studies on GS that were published prior to and including June 2023. The PRISMA 2020 protocol was used in the sample selection process. A total of 62 peer-reviewed journal articles from six databases were identified and categorized into various themes.
Findings
The results suggest that previous research has predominantly focused on the areas of GS advantages, drivers, market development and potential sectors, along with challenges and recommendations to improve the market. However, it was found that some other aspects, including GS pricing, performance and purchasing intention, require further research attention. The analysis also indicated that the use of theories in the GS context was limited, with only five theories employed in just four out of the 62 articles examined. Moreover, this paper’s findings revealed that the studies employing quantitative and empirical analysis methods were limited to four articles. Geographically, most of the studies were conducted in Indonesia and Malaysia, while other countries with high-potential markets (e.g. GCC) had limited GS practices and studies.
Practical implications
The results of this study have several practical implications. For investors, a review of GS will provide greater insight into the understanding of the GS market, helping them make better investment decisions. For policymakers, this paper empowers them with the knowledge to make informed decisions regarding GS markets by highlighting key recommendations identified in the literature. Finally, the proposed guidelines can be used in future research.
Originality/value
While Green Bonds have received significant attention, there is a dearth of research on GS and those that exist are fragmented. A systematic literature review is necessary to identify knowledge gaps for future research.
Details
Keywords
Indar Fauziah Ulfah, Raditya Sukmana, Nisful Laila and Sulaeman Sulaeman
Green sukuk (Islamic bonds) is one of Islamic financial instrument as an alternative financing source for supporting green finance projects in several sectors such as renewable…
Abstract
Purpose
Green sukuk (Islamic bonds) is one of Islamic financial instrument as an alternative financing source for supporting green finance projects in several sectors such as renewable energy or climate change problems. The aim of study is to present an understanding of the issues, explore the lesson for government policy and identify the potential for future studies directions.
Design/methodology/approach
This study conducted a literature review on green sukuk or Islamic bonds based on eight journal databases. The authors have carried out a strict selection of journals that are only indexed by Scopus and are protected from predatory journals.
Findings
This study has selected 7 of 118 published articles on green topics. This study has found that 50% of green sukuk research is dominated by a theoretical qualitative approach. While research that uses a quantitative or empirical approach is still below 30%, followed by using mixed methods. This study finds that research discusses green sukuk on Sustainable Development Goals (SDGs) or environmental issues, especially climate change, COVID-19 issues and green financial reporting. In addition, in the existing literature, this study found that green sukuk has main advantages instead of green bonds where green sukuk must comply with sharia principles, namely, being free from usury, interest and uncertainty.
Practical implications
This study analyzes two important implications, namely, first, the implications of government policies regarding the potential for issuing green sukuk in supporting all programs on the agenda for the 2030 SDGs, especially controlling and preventing the adverse impacts of global climate change; second, the implications for further research, further researchers can refer to the results of this review to make it easier to find new research things about the relationship of green sukuk with SGDs.
Originality/value
To the best of the authors’ knowledge, this paper is the first review paper that structurally reviews the previous literature on green sukuk (Islamic bonds) based on reputable publisher journals that have been indexed by Scopus.
Details
Keywords
Khalid Mady, Muhammad Abi Sofian Abdul Halim, Khatijah Omar, Mohamed Battour and Reda Shaker Abdelkareem
Although environmental pressures have been covered in great detail in prior literature as the drivers of eco-innovation, there remains inconsistency in the empirical results…
Abstract
Purpose
Although environmental pressures have been covered in great detail in prior literature as the drivers of eco-innovation, there remains inconsistency in the empirical results concerning the effects of these pressures on eco-innovation behaviour. Hence, this paper aims to investigate the impact of environmental pressures, namely, regulatory pressure, green demand and competitive pressure, on eco-innovation among manufacturing SMEs. Moreover, it examined the mediating role of environmental capabilities on the environmental pressure–eco-innovation relationship.
Design/methodology/approach
Quantitative data were collected using an online self-reported questionnaire survey to test the hypothesised model. A total of 183 valid questionnaires were collected from managers and owners of manufacturing SMEs in Egypt.
Findings
The results of the data analysis using the Smart-PLS software package revealed that among environmental pressures, only green demand had a direct effect on eco-innovation. In addition, environmental capabilities only mediated the effect of competitive pressure on eco-innovation.
Originality/value
This study has been one of the few addressing the issue of how the drivers of eco-innovation interact. It has also provided the managers and owners of SMEs and policymakers with practical implications.
Details
Keywords
Reza Kiani Mavi, Neda Kiani Mavi, Reza Farzipoor Saen and Mark Goh
Despite unanimity in the literature that eco-innovation (EI) leads to sustainable development, evidence remains limited on measuring EI efficiency with the Malmquist productivity…
Abstract
Purpose
Despite unanimity in the literature that eco-innovation (EI) leads to sustainable development, evidence remains limited on measuring EI efficiency with the Malmquist productivity index (MPI). In conventional data envelopment analysis (DEA) models, decision-making units (DMUs) are inclined to assign more favorable weights, even zero, to the inputs and outputs to maximize their own efficiency. This paper aims to overcome this shortcoming by developing a common set of weights (CSW).
Design/methodology/approach
Using goal programming, this study develops a CSW model to evaluate the EI efficiency of the organization for economic co-operation and development (OECD) countries and track their changes with MPI during 2010–2018.
Findings
Achieving a complete ranking of DMUs, findings show the higher discrimination power of the proposed CSW compared with the original DEA models. Furthermore, results reveal that Iceland, Latvia and Luxembourg are the only OECD countries that have incessantly improved their EI productivity (MPI > 1) from 2010 to 2018. On the other hand, Japan is the OECD country that has experienced the highest yearly EI efficiency during 2010–2018. This paper also found that Iceland has the highest MPI over 2010–2018.
Practical implications
More investment in environmental research and development (R&D) projects instead of generic R&D enables OECD members to realize more opportunities for sustainable development through minimizing energy use and environmental pollution in any form of waste and greenhouse gas emissions.
Originality/value
In addition to developing a novel common weights model for DEA-MPI to measure and evaluate the EI of OECD countries, this paper develops a CSW model by including the undesirable outputs for EI analysis.
Details
Keywords
Siti Nurhidayah Mohd Roslen, Mei-Shan Chua and Rafiatul Adlin Hj Mohd Ruslan
The purpose of this study is to empirically investigate the asymmetric effects of financial risk on Sukuk market development for a sample of Malaysian countries over the period of…
Abstract
Purpose
The purpose of this study is to empirically investigate the asymmetric effects of financial risk on Sukuk market development for a sample of Malaysian countries over the period of 2010–2021.
Design/methodology/approach
This study refers to the International Country Risk Guide (ICRG) in determining the financial risk factors to be studied in addition to the Malaysia financial stress index (FSI) to capture changes in financial risk level. The authors use the nonlinear autoregressive distributed lag (NARDL) model to tackle the nonlinear relationships between identified financial risk variables and Sukuk market development.
Findings
The results suggest the existence of a long-run relationship between foreign debt service stability, international liquidity stability (ILS), exchange rate stability (ERS) and financial stress level with the Sukuk market development in Malaysia. Indeed, higher ILS and ERS will boost Sukuk market size, whereas higher foreign debt services and financial stress are negatively related to Sukuk market development. Findings also indicate that the long-run positive and negative impacts of identified financial risk components on Sukuk market development are statistically different. Taking into account the role of the Sukuk market in facilitating Malaysia’s economic growth, the country should aim to keep the foreign debt-to-GDP ratio at a sustainable level.
Research limitations/implications
This study points to three possible directions for future research. The first is the differential impact of financial risk components on Sukuk issuance for different Sukuk structures. As more data becomes available in the future, this area could be further explored by conducting the above analysis for different combinations of Sukuk structures and currency denominations. In addition, future researchers could also consider exploring the variability of financial risk impacts through comparative studies of the leading Sukuk-issuing countries to account for differences in regulatory frameworks and supporting infrastructure.
Practical implications
This study provides valuable practical and policy implications for strengthening the growth of the Sukuk market. While benefiting from the diversification benefits of funding sources to finance private or government projects and developments, Malaysia should remain vigilant to global economic conditions, foreign exchange markets and financial stress levels, as all of these factors may significantly influence investor sentiment and the rate of return offered by Sukuk issuance.
Originality/value
The use of the NARDL approach, which investigates the long-run effects of financial risk factors on Sukuk market development in Malaysia, makes this study a valuable addition to the literature, as there has been little research into the asymmetric effects of those variables on Sukuk market development using samples from emerging Asian markets.
Details
Keywords
Sergio Román, Stefan Bodenstab and Luis Manuel Sánchez-Siles
Companies are increasingly aware of the importance of delivering economic, social and environmental benefits through sustainable innovation. This study aims to examine how…
Abstract
Purpose
Companies are increasingly aware of the importance of delivering economic, social and environmental benefits through sustainable innovation. This study aims to examine how companies manage tensions derived from sustainable innovation and identify internal and external factors that facilitate its successful implementation in the food industry.
Design/methodology/approach
An abductive and qualitative research approach was followed. Data from a multinational food manufacturer were collected from a variety of sources, which included 23 in-depth interviews with respondents from 9 different countries as well as public documents of the company under study.
Findings
Results suggest that there is no “one-size-fits-all” strategy for dealing with tensions (derived from sustainable innovations), and more than one type of strategy (i.e. win–win, trade-offs) can be used simultaneously. In addition, sustainable innovation drivers do not seem to operate in isolation and follow a particular pattern where external factors motivated the development of a new set of values, which in turn were picked up and integrated into transformations at the strategic and operational level.
Originality/value
The study contributes to the theoretical and practical discussion on sustainable innovation management by providing real business case evidence of how corporate tensions derived from sustainable innovation are managed and offers a comprehensive taxonomy of sustainable innovation drivers in the food industry.