https://orcid.org/0000-0001-9648-1483
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ABSTRACT
The growing level of interest towards climate change adaptation and mitigation calls for sovereign and corporate entities to integrate green sukuk into their green initiatives while concurrently meeting the demands of Islamic finance players. However, the current performance shown by the global green sukuk market does not meet the expectation, whereas the limited amount of studies providing clear evidence on the actual drivers impacting green sukuk issuance is an obstacle. Therefore, this study aimed to explore the drivers influencing green sukuk issuance and identify the mechanisms underlying each of these drivers in order to propose strategic actions geared for the policymakers to drive its presence. This was achieved through a qualitative case study conducted with the participation of green sukuk issuers in Malaysia. As a result, it was revealed that competitiveness, legitimation and ecological responsibility influenced the issuance of green sukuk. Hence, the findings may inspire the policymakers towards utilising the roles of green sukuk drivers and positioning a comprehensive attempt in boosting its presence. This can be potentially achieved by an increased amount of favourable legislative measures and applicable promotion and education strategies of the green agenda for a strengthened green sukuk market.
Acknowledgement
The work was supported by Universiti Teknologi MARA Malaysia (UiTM) under Geran Inisiatif Penyeliaan (600-IRMI 5/3/GIP (038/2019)). The authors thank UiTM for the financial assistance provided for this project.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 CLOA is issued by the Energy Commission to the solar power producer that wins the LSS bidding programme and as a written approval to construct the project (Energy Commission Citation2016).
2 LSS is ‘Large Scale Solar or LSS is a competitive bidding programme to drive down the Levelised Cost of Energy (LCOE) for the development of large-scale solar photovoltaic plant (LSS) and Energy Commission is the implementing agency for this scheme’ (Sustainable Energy Development Authority Citation2020).
3 Special Purpose Vehicle is a subsidiary created by a parent company to undertake the management of green project and any matters related to it, including issuing green sukuk.