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Green sukuk – Malaysia surviving the bumpy road: performance, challenges and reconciled issuance framework

Green sukuk – Malaysia surviving the bumpy road: performance, challenges and reconciled issuance... Green sukuk is a tool to finance climate change which has garnered considerable attention. However, having only recently come into existence has its own set of challenges for this tool that require immediate identification and government intervention to intensify its growth. This study aims to explore the challenges encountered by green sukuk issuers and the structure of a reconciled green sukuk issuance framework to speed up the market’s growth with the right interventions.Design/methodology/approachThe study engaged a qualitative approach via multiple case study interviews with green sukuk issuers and used expert views for data triangulation to generate the findings. A total of four green sukuk issuers participated in the interviews, and for data triangulation purposes, four expert’s opinions and views were considered. The thematic analysis technique is used to report the findings.FindingsIt was revealed that amongst the challenges encountered in the green sukuk market are shoddy green taxonomy, difficulty in identifying green assets, it is time-consuming and costly, no compelling benefits and exposure to higher-risk profiles.Research limitations/implicationsThis study may be influenced by observer error and observer bias. However, the researchers have taken cautious steps to overcome these issues by following strict case study methodology procedures and triangulating the qualitative research findings with views from green sukuk experts. These interventions increased the rigour and trustworthiness of the results.Originality/valueThis study is amongst the pioneer in Malaysia, exploring challenges in the green sukuk market. The results are relevant to governments, regulators, institutions and central banks to structure the right interventions to counter the challenges. Greater government involvement is required to strengthen the green sukuk market and to spearhead the green agenda. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Qualitative Research in Financial Markets Emerald Publishing

Green sukuk – Malaysia surviving the bumpy road: performance, challenges and reconciled issuance framework

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References (34)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1755-4179
DOI
10.1108/qrfm-04-2021-0049
Publisher site
See Article on Publisher Site

Abstract

Green sukuk is a tool to finance climate change which has garnered considerable attention. However, having only recently come into existence has its own set of challenges for this tool that require immediate identification and government intervention to intensify its growth. This study aims to explore the challenges encountered by green sukuk issuers and the structure of a reconciled green sukuk issuance framework to speed up the market’s growth with the right interventions.Design/methodology/approachThe study engaged a qualitative approach via multiple case study interviews with green sukuk issuers and used expert views for data triangulation to generate the findings. A total of four green sukuk issuers participated in the interviews, and for data triangulation purposes, four expert’s opinions and views were considered. The thematic analysis technique is used to report the findings.FindingsIt was revealed that amongst the challenges encountered in the green sukuk market are shoddy green taxonomy, difficulty in identifying green assets, it is time-consuming and costly, no compelling benefits and exposure to higher-risk profiles.Research limitations/implicationsThis study may be influenced by observer error and observer bias. However, the researchers have taken cautious steps to overcome these issues by following strict case study methodology procedures and triangulating the qualitative research findings with views from green sukuk experts. These interventions increased the rigour and trustworthiness of the results.Originality/valueThis study is amongst the pioneer in Malaysia, exploring challenges in the green sukuk market. The results are relevant to governments, regulators, institutions and central banks to structure the right interventions to counter the challenges. Greater government involvement is required to strengthen the green sukuk market and to spearhead the green agenda.

Journal

Qualitative Research in Financial Markets – Emerald Publishing

Published: Jan 12, 2022

Keywords: Green financing; Green sukuk; Green sukuk framework; Green taxonomy; Sustainable responsible investment

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