Green and sustainability Sukuk represents a key theme at COP28; Global ESG Sukuk issuance totaled US$8.4 billion in 2022; Growth of total Islamic finance assets by 11% to US$4.5 trillion in 2022; Malaysia, Saudi Arabia, and Indonesia lead Islamic finance development; US$788 billion total global Sukuk outstanding last year; Multiple growth channels to drive Islamic finance industry forward.

The Islamic Corporation for the Development of the Private Sector (ICD), the private sector development arm of the Islamic Development Bank Group (IsDB) Group, and the London Stock Exchange Group (LSEG), the world’s leading provider of financial markets data and infrastructure, jointly launched this year’s edition of the Islamic Finance Development Report titled ‘Navigating Uncertainty’ during the 18th AAOIFI–IsDB Annual Islamic Banking and Finance Conference, supported by the Central Bank of Bahrain.

Green and sustainability Sukuk represent a key theme at COP28 in Dubai as a catalyst for growth in sustainability projects and ESG Sukuk issuance across developing countries. Global ESG Sukuk issuance totaled US$8.4 billion in 2022, marking yet another record year and maintaining its rapid growth since the first of such Sukuk was issued in 2017. By the end of 2022, Islamic ESG funds amounted to US$6.6 billion in value outstanding, down 14% from their peak of US$7.6 billion in 2021.

According to the Islamic Finance Development Report 2023, the global Islamic finance industry increased its assets size by 11% to US$4.5 trillion in 2022 with Islamic banking holding 72 % of total industry’s assets. The industry also grew by 163% since 2012 and is expected to grow by US$6.7 trillion by 2027.

Several key factors contribute to this outlook, including the strengthening of domestic Islamic finance sectors in large markets such as the GCC, Malaysia and Indonesia. Moreover, Pakistan’s initiatives to align its financial system with interest-free principles contribute significantly.

The report is based on the Islamic Finance Development Indicator (IFDI), which is a composite weighted index that measures the overall development of the Islamic finance industry. The data is comprehensively gathered from a universe of 136 countries and measured across more than 10 key metrics, including knowledge, governance, sustainability, and awareness.

Malaysia led the IFDI list this year with a score of 103, followed by Saudi Arabia (70), Indonesia (58), Bahrain (54), Kuwait (54) and the UAE (53).

Eng. Hani Salem Sonbol, Acting CEO of the Islamic Corporation for the Development of the Private Sector, said: “The industry is expected to continue to grow and over the past decade, we have captured the growth of the global Islamic finance industry and its ecosystem. We are pleased to see that the indicator results are consistently cited over the years by various regulatory authorities and multilateral organizations worldwide. These citations are especially prevalent in studies and publications focused on strategies, blueprints, development roadmaps and masterplans within Islamic finance or the broader financial sector. We hope this year’s report, following in the footsteps of previous IFDI reports, will have a meaningful impact on the Islamic finance industry.”

Mustafa Adil, Head of Islamic finance, London Stock Exchange Group (LSEG) said: “The IFDI report demonstrates our continued effort towards monitoring and charting the development of the global Islamic finance industry. The report is based on the Islamic Finance Development Indicator (IFDI) that covers data on different Islamic finance sectors, asset classes and industry supporting ecosystem. The indicator was first launched in 2013 and so this year is a milestone for us. Reaching this mark reminds us of the importance of the need for continued commitment to serve the global Islamic finance industry that has expanded exponentially in the last decade.”

To download a copy of the report, please click here https://apo-opa.co/4afTVba