Summary: ESG and the Shari'ah Framework
The integration of Environment, Social, and Governance (ESG) principles with the Shari'ah framework is deeply rooted in Islamic teachings. The Quran and Hadith contain numerous concepts that align with ESG, providing a strong foundation for sustainable and ethical business practices.
Key Islamic terms such as Adl (Justice), Qist (Equity), Wasat (Moderation), Israf (Extravagance), Tabzeer (Squandering), Shuhh (Greed), Bukhl (Stinginess), Infaq (Spending for Charity), Swadaqa (Voluntary Charity), and Zakat (Obligatory Charity) closely correspond with ESG’s environmental, social, and governance aspects.
ESG is not just a compliance framework but a transformative approach that influences business policies and strategies. It encourages holistic evaluation, policy reformation, strategic alignment, stakeholder engagement, and cultural shifts within organizations. By incorporating ESG principles, businesses can ensure their operations remain ethical, sustainable, and socially responsible, aligning with Islamic economic values.
This integration strengthens Islamic finance institutions, enhancing transparency, ethical investments, and responsible governance, ultimately contributing to a more just, equitable, and sustainable society.
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