Nearly three quarters of Islamic finance professionals believe demand for ESG investment strategies is not being met by Shariah funds.
A survey conducted by Maybank Islamic Berhad, the Islamic banking arm of Maybank Group, and IslamicMarkets.com also found that professionals working across a wide range of sectors found 36% expected dramatic growth in ESG/Shariah funds, while 49% expected a slight increase in the number of fund launches in the future.
The asset managers, bankers and other professionals surveyed agreed that if investment products were certified as both Shariah and ESG-compliant more non-Muslims than Muslims would buy them given the strong demand for ESG, particularly in Europe. Around 72% agree the introduction of a global standard for ESG and Shariah would boost demand.
So far, real estate funds which combine Shariah and ESG principles are limited, however an exchange traded fund (ETF) which tracks the performance of real estate investment trusts which meet Shariah and green investing criteria was launched in December 2021.