ESG-Linked Sukuk to Continue to Lead Issuance in Core Markets: Fitch

Environmental, social and governance- (ESG) linked Sukuk are expected to remain a significant issuance theme in core Islamic finance jurisdictions, supported by increasing investor demand and awareness, as well as government policies that support sustainability and economic diversification, according to Fitch Ratings.

Why it Matters?

The ESG-linked Sukuk segment, which includes green, sustainable, sustainability-linked, and transition Sukuk, has been growing as a significant portion of the global Sukuk market despite volatility brought on by the Russia-Ukraine war, rising interest rates, rising oil costs, and inflation. The lack of domestic investors and issuers with an ESG focus was one of the main problems in the core Islamic finance markets, along...