Do Islamic banking customers hold the keys for sustainability in Islamic finance?

A survey of retail banking customers of Islamic banks shows wide-scale enthusiasm for sustainability and a belief that Islamic finance aligns well with the SDGs. However, the challenges posed by ESG risks and concerns about greenwashing make it increasingly urgent that Islamic banks maintain customer confidence. This should lead to an expanded focus on financing the climate transition and adaptation, and other investments that deliver ESG risk mitigation and support sustainable economic development.

A recent survey of retail Islamic banking customers from a range of countries found a shared interest in sustainability, even if it costs them moreIslamic banks will have to avoid the gap between retail customers’ priorities and corporates’ sustainability capabilities if...