The Islamic finance market has demonstrated impressive growth in recent decades, with several waves of growth propelled by different global trends. There has been increasing convergence with the development of responsible finance that has occurred over the decade since the agreement on the Sustainable Development Goals and the Paris Climate, which was a principal objective of the RFI Foundation when it was established in 2015.

One success of Islamic finance in adopting responsible finance has been demonstrating the operational compatibility of ESG screening alongside the core mandate for Shariah compliance. A new position paper from the Malaysian International Islamic Financial Centre (MIFC) Leadership Council provides a vision for the next phase of growth and development of Islamic finance. This is one of several initiatives to more firmly establish responsible finance in its core.

There has always been a strong ground for Islamic finance to play a more active and leading role in addressing global needs to address concerns such as the climate and nature crisis. What has taken time since agreement around global goals for sustainable development and restoring balance in planetary systems has been to demonstrate compatibility of climate and ESG approaches with Islamic finance. By conclusively demonstrating this compatibility, Islamic finance has also illuminated opportunities for the sector to lean into its concern for equity and justice and provide solutions as the momentum of interest in responsible finance produces opportunities to feasibly put them into action.