A new international taskforce has been created with the support of the UK Government to engage the Islamic finance industry with the UN’s Sustainable Development Goals. The high-level Islamic Finance and Sustainable Development Goals (SGDs) taskforce will be anchored in London and run by the UK-based, and APPGIF Secretariat, Islamic Finance Council UK (UKIFC). Economic Secretary to the Treasury John Glen said the new initiative will ‘drive forward innovation around the world’. The UK Government is the founding country partner for the taskforce that aims to promote understanding and encourage adoption of the UN SDGs amongst Islamic financial institutions.
The inaugural meeting, to be hosted by the APPGIF’s Lord Sheikh and Baroness Uddin in the House of Lords on Monday 16th March 2020, was postponed due to the Covid-19 outbreak and will now take place in person or virtually in July.
The UN’s SDGs are the blueprint to achieve a better and more sustainable future for all, addressing issues such as climate change, education and equality. But a recent analysis from UKIFC and Malaysia-based ISRA found a considerable lack of knowledge, misunderstandings and minimal engagement by Islamic financial institutions with the SDGs. Islamic finance is one of the fastest growing sectors in the global financial industry, with assets expected to reach US $3.8 trillion in 2022. Innovative financial structuring in the sector can help create instruments that drive capital towards the SDGs. The UK – and London in particular – has already become a centre for Islamic finance, helping finance developments such as The Shard and the Olympic Village. In 2014, the UK Government cemented the UK’s position as a hub for Islamic finance by becoming the first western country to issue sovereign Sukuk – Islamic bonds. With the City’s strength in conventional financial services, the strong legal framework and progressive outlook it continues to intellectually innovative and assist developments in the global Islamic finance arena.
The taskforce is primarily intended for global commercial Islamic financial institutions and is set to run until 2022 with the following objectives:
- Increase awareness, promote understanding and encourage adoption of the UN’s SDGs amongst Islamic financial institutions;
- Facilitate sharing of knowledge and experience amongst taskforce members; and
- To identify what resources are required that will directly assist Islamic financial institutions to successfully engage with the SDGs.
The Economic Secretary to the Treasury, John Glen MP, said:
“The UK is a world leader in Islamic Finance, so I am pleased we’re now a founding country partner and observer member of the new Islamic Finance SDG Taskforce. “This Taskforce will bring together the global Islamic finance community so it can help us meet our international, environmental and sustainability objectives – using UK expertise in sustainable finance to drive forward innovation around the world.”
Richard de Belder, Advisory Board Member of the Islamic Finance Council UK, said:
“Delivering the UN’s Sustainable Development Goals will require private sector involvement. “But business-as-usual in the global financial arena will not deliver the 2030 goals. “A step-change in private investment in SDGs is required, and Islamic finance, as one of the fastest growing sectors in the global financial industry, provides a unique opportunity for innovative solutions. “We need a fairer system of financial management that delivers more than just profit and the inherent principles within Islamic finance are naturally aligned to the sustainability agenda. “This new taskforce will explore ways to bring people and institutions together to help achieve the UN SDGs.”
Charles Haresnape, CEO, Gatehouse Bank, said:
“We welcome the opportunity to support and participate in the Islamic Finance and Sustainable Development Goals Taskforce. “Our Shariah-compliant finance principles mean that our products and services are ethical by design and as a founding signatory of the UN’s Principles for Responsible Banking, Gatehouse Bank has committed to strategically aligning its business with the UN’s Sustainable Development Goals. “We are confident that the taskforce will play a significant role in identifying innovative solutions for sustainable finance in the future.”