The pioneering meeting, convened by the Islamic Finance Council UK (UKIFC) in partnership with the UK Government, explored the role Islamic finance can play in addressing the $2.5 trillion SDGs funding gap as part of the post-Covid-19 economic recovery.
As the Taskforce’s first country partner the UK Government’s Economic Secretary to the Treasury and City Minister John Glen MP commented:
“I am committed to strengthening the UK’s Islamic banking sector and ensuring the UK remains the leading Western hub for Sharia-compliant financial products and institutions. Islamic Finance can play an important role in unlocking the investment needed to deliver sustainable development goals and I look forward to seeing the practical ideas the Taskforce will generate.”
Representatives from UK-based Arabesque Asset Management, Bank of London and the Middle East DDCAP Group, Gatehouse Bank, GIB UK, SMBC Europe and TheCityUK were joined by practitioners from Africa, Gulf and South East Asia to discuss the need for the Islamic finance sector to move from talk to collective action to support the achievement of the Global Goals by 2030.
Islamic Development Bank President Bandar Hajjar also welcomed the initiative and called for greater cooperation between the public and private sectors and to use the SDGs to inspire financial innovation.
UKIFC Advisory Board Member and meeting chair Omar Shaikh said:
“Despite a natural alignment our analysis suggests that few Islamic financial institutions are engaged in the SDGs. As we enter the decade of delivery we have convened some of the leading global figures in Islamic finance to consider the steps to be taken to raise awareness of the Global Goals and inspire practical action amongst Islamic financial institutions.”
Key discussion points included:
- The SDG financing gap can be closed by mobilising 1% of the global capital market value
- Forecasts show that the economies of 20% of Islamic Development Bank member states will shrink in 2020
- UNDP estimates that 100 million people will fall back into poverty in 2020
- The taskforce has the opportunity to:
- Create a platform to encourage and support collaboration and practical action
- Develop a campaign to support Islamic financial institutions and their stakeholders to understand and engage with the SDG agenda.
About The Taskforce:
With assets expected to reach US $3.8 trillion in 2022, Islamic finance is one of the fastest growing sectors in the global financial industry. Achieving the 17 Sustainable Development Goals (SDGs) agreed in the UN’s 2030 Agenda for Sustainable Development will take over US$5 trillion per year investment with the current financing gap standing at around $2.5 trillion per year.
The purpose of the taskforce is to explore the role the Islamic finance industry can play in addressing this funding gap and to better understand the commercial opportunities the SDGs present for the sector.
The UN’s SDGs are the blueprint to achieving a better and more sustainable future for all, addressing issues such as climate change, education and equality. Achieving the SDGs requires a coordinated global effort with Governments and private sector, including the financial services sector as a whole.
Analysis indicates there is limited engagement by the global Islamic finance sector and this focused taskforce has been established by the UKIFC.
About The UKIFC:
The Islamic Finance Council UK (UKIFC) is a specialist advisory and development body focused on promoting and enhancing the global Islamic and ethical finance industry.
The organisation was launched in 2005 by a group of like-minded professionals who sought to make a contribution to the development of the new and exciting Islamic finance industry. The founding directors, comprising a banker, an accountant and a lawyer, recognised that it was not within the mandate of their current businesses to invest resources into growing this young and emerging sector. The idea was conceived to establish a not-for-profit organisation which could provide a formal platform for them and others to dedicate their time and expertise, on a pro bono basis, to drive the sector forward.
Within the Islamic finance arena, the UKIFC has been the first body to focus on the contemporary ethical finance market identifying areas of synergy and co-ordination since 2010. Over the last 10 years the UKIFC has pioneered many initiatives which have become internationally acclaimed and award winning moving the debate in Islamic finance to consider the broader ethical finance thematic which has encouraged other organisations to join the dialogue. Our work includes:
- Designing and launching the Ethical Finance Hub, the UK’s first dedicated platform for ethical finance
- Initiating the world’s first joint venture between Islamic finance and the Church
- Establishing and successfully running (for several years) the award-winning Edinburgh Ethical Finance Round Table Series which has become the country’s leading platform for ethical finance
- Becoming the first Islamic finance body to formally support the UNEP FI Principles for Responsible Banking
- Launching the Global Ethical Finance Initiative (GEFI) and its international conference Ethical Finance Week
- Launching the global Islamic Finance and SDG Taskforce
- Developing an SDG thought leadership series focused on driving awareness, engagement and action amongst Islamic financial institutions