Unlocking Islamic Climate Finance in Joint ADB and IsDB Countries
Time & Date of Event
5:00 PM to 6:30 PM on Wednesday, 9th of November 2022
The magnitude of the climate crisis demands innovative ways to scale investment in climate action, including mobilizing new sources of climate finance. At the same time, the coronavirus disease (COVID-19) pandemic has added a new dimension to the climate crisis, reversing economic development gains, and further straining public resources to invest in climate action. Governments in Asia and the Pacific face a major challenge in defining the pathway for their economies to recover from this dual crisis.
This report assesses the potential of Islamic finance to support the climate agenda, and to help countries in Asia and the Pacific region deliver on their Paris Agreement goals. Islamic finance has thrived since its inception in the 1970s and is pegged at almost $3 trillion globally including in certain countries in Asia and the Pacific with significant Muslim populations. By examining the lessons and opportunities of implementing Islamic climate finance across countries in the region, the report proposes alternative pathways and implementation strategies to develop and implement Islamic finance for climate action and a green, resilient, and inclusive post COVID-19 recovery.
The report recommends a staged approach, detailing four specific channels to target Islamic climate finance development: i) greening Islamic capital markets, ii) greening Islamic social finance; iii) mobilizing Islamic project finance for green infrastructure and iv) developing green banking services for the non-banked to support financial inclusion. This strategic approach aims to support countries in the region in a way that is tailored to their national context, and the structure of their Islamic finance market.
The Asian Development Bank and the Islamic Development Bank share many common developing member countries in Asia and the Pacific, including those with high potential to scale up Islamic climate finance. We are therefore pleased to have collaborated on this study, combining our knowledge and perspectives on the challenges and opportunities of Islamic Climate Finance. We look forward to future opportunities to work jointly together to leverage the greater potential of Islamic finance to be directed to supporting climate action and support a green, inclusive and resilient recovery from COVID-19.
Present joint report released by ADB and IsDB on unlocking Islamic finance for climate action. Panel to discuss upcoming challenges and opportunities in unlocking and scaling Islamic finance for climate action.