Islamic finance covers roughly $2.8 trillion in assets worldwide, yet only a sliver of sustainable loans today are sharia-compliant. But Datuk Shahril Azuar Jimin, Maybank’s chief sustainability officer, thinks that gap should be easy to fill.
Banks across the Middle East and Southeast Asia are embracing Islamic finance in order to better serve Muslim populations. Maybank, for example, offers Islamic banking products ranging from Islamic deposits and financing to Wasiat (Islamic legacy planning) across five markets: Malaysia, Indonesia, Singapore, London, and the Middle East.
Last November, Maybank and the government of Sabah, a Malaysian state on the island of Borneo, agreed to work together on the world’s first “blue sukuk,” designed to finance marine conservation, sustainable fisheries, and coastal ecosystem restoration. Sukuk are bonds that comply with Islamic law; rather than pay interest, sukuk instead offer buyers a time-limited share in the profits of a particular asset. Sabah holds 60% of Malaysia’s mangroves, offering significant potential for blue carbon credit generation.
Islamic finance refers to a series of banking practices that comply with sharia, or Islamic law. Islam bars charging interest, so banks find other ways to ensure people get a return, often by offering bondholders a share of profits or giving lenders an ownership stake. Islamic finance may also avoid sectors and products considered haram, or unclean; for example, a sharia-compliant ETF may avoid banks that offer traditional loans or e-commerce platforms that sell pork.
“Islamic finance is a huge global market, which is projected to exceed $3 trillion,” Shahril says. “We believe Islamic finance can play a much larger role in financing ASEAN’s green transition, and also create more inclusive growth.”
Maybank named Shahril as its first chief sustainability officer in 2021; he’d previously spent several years serving as CEO of the Maybank Foundation, the bank’s corporate social responsibility arm.
“When I was first appointed, there was nothing much I could fall back on in terms of precedent,” Shahril says. “We didn’t know a lot of things.”
“ASEAN economies are deeply connected to their coastlines and marine ecosystems,” Shahril explains, pointing to how Indonesia and the Philippines are made up of over 17,000 and 7,000 islands, respectively. “All these ecosystems support fisheries, tourism, trade, and livelihoods, making the sustainable management of ocean resources increasingly important to long-term economic resilience.”
“Our aspiration is that sustainable finance will one day just be finance,” Shahril says. “And that sustainability will be so ingrained in everyday life, that we don’t even talk specifically about funding it.”
