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Developing Islamic green stock index in Indonesia: issues and prospects

Mustafida, Rifka and Kassim, Salina (2020) Developing Islamic green stock index in Indonesia: issues and prospects. In: 8th ASEAN Universities International Conference on Islamic Finance (8th AICIF) 2020, 24th-26th November 2020, Bogor, Indonesia. (Unpublished)

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Currently, there are three Islamic indexes in Indonesia, namely Jakarta Islamic Index (JII), Jakarta Islamic Index 70 (JII70), and Indeks Saham Syariah Indonesia (ISSI). These indexes, however do not involve environmental or sustainable indicators in their screening processes. Shariah principle does not only regulate about riba, gharar and maysir, it also involves the concern on environmental sustainability and protection of beings. This study aims to explore the issues and challenges in developing green stock index by analyzing the environmental criteria for Islamic green stock screening, the importance of environmental preservation in Islamic principle, and the extent of contribution of the shariah-compliant companies in contributing to environment preservation. The Quran sends out a clear message to preserve the environment, indicating that Islam emphasizes on the importance of preserving the environment. This study finds that Environmental Management System, Energy Efficiency, Waste 3R implementation, emission reduction efforts, reducing the burden of water pollution, biodiversity conservation, and community development program are environmental criteria for Islamic green stock Index. The results show that from that number, there is decrement of the Shariah-compliance companies in preserving environment for last three years. Islamic capital market in Indonesia has legal and institutional opportunities for comprehensive improvement of sustainable investment through Islamic green stock index. This research would have an important impact on policies related to Islamic stock screening development and transformation of business process particularly in Indonesia.

Item Type: Conference or Workshop Item (Plenary Papers)
Additional Information: 4600/87432 Presented via Zoom
Uncontrolled Keywords: Islamic Green Stock Index, sustainable investment, Indonesia
Subjects: H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Prof. Dr. Salina Kassim
Date Deposited: 04 Jan 2021 15:15
Last Modified: 04 Jan 2021 15:48
URI: http://irep.iium.edu.my/id/eprint/87432

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