The Evolution of Malaysia’s Value-Based Intermediation Shows a Path for Islamic Finance to Embed Responsible Finance

Malaysia’s new Financial Sector Blueprint outlines synergies of VBI with sustainable financeVBI has evolved to focus on environmental and social impact layered on top of a universal approach to sustainable financeIslamic financial institutions can build their own approach to responsible finance in order to stay competitive on ESG and climate risk and layer on a Shariah-inspired approach to achieve impact

Bank Negara Malaysia has released its Financial Sector Blueprint covering the 2022-2026 period, and it includes a focus on sustainable finance that is intertwined explicitly with the focus on Islamic finance. More than most Islamic markets, Malaysia has seen its responsible finance efforts emerge from initiatives within Islamic finance.

The mainstreaming of respon...