Navigating the Paradigm Shift in Malaysia’s Sustainable Responsible Investment Sukuks

Zakariya Mustapha

Sherin Kunhibava

Aishath Muneeza

Maryam Khalid

 

Abstract: Sustainable Responsible Investment (SRI) Sukuk are instruments aimed at improving the condition of societies and communities. Sukuk itself are Shari’ah compliant alternatives to bonds or technically they are certificates of equal value represent fractional ownership or investment in assets, structured according to Shari’ah principles. The Sustainable and Responsible Investment Sukuk Framework was issued by the Securities Commission of Malaysia for Sukuk that funds green projects, social projects or projects that develops waqf (endowment) assets. This note examines the use of Sukuk for more than just commercial gain, this paradigm shift is welcomed and necessary to stay true to the Maqasid al Shari’ah (the goals and objectives of Shari’ah) to provide ease for people. In this note, two examples of SRI Sukuk namely Sukuk Prihatin (Empathetic Sukuk) and Ihsan Sukuk (Excellence Sukuk) will be examined. The SRI Sukuk focusses on positive social change, while there is a return on investment there is also an additional emphasis on enabling less privileged segments of the society to benefit from the funds provided through the issuance of the Sukuk. The objective of this note is to explain SRI Sukuk framework and examine case studies and provide recommendations for future SRI Sukuk issuances and understand how the Maqasid al Shari’ah (the goals and objectives of Shari’ah) is being pursued.1 The methodology used in this note is non-doctrinal and document analysis. Secondary sources were reviewed to answer the research objective.