ISLAMIC BANKING & FINANCE
Investments following Shariah principles present a bright future for Middle East economies As the world looks ahead to a prosperous economic recovery, sustainable development plans, and the future of finance, the Middle East holds a jewel in its crown, poising it for success both regionally and globally. That jewel is the continued rise and evolution of Islamic finance
I
slamic finance holds the key to unlocking transformative sustainable economic development
Trade and finance in the Middle East remain a central topic of debate for global businesses and governments, as some of the largest investors, financiers, policymakers and industry thought leaders convene at Dubai World EXPO – the region’s landmark event – and following the UAE Central Bank’s Future of Finance Conference. In recent years, we have seen growing demand for, and adoption of, Islamic finance assets. Shariah compliant assets will play a valuable role in providing investors with a more accessible, familiar entry point into sustainable investment, as well as greater liquidity and global investment opportunities more broadly. Since Islamic finance shares many common values with that of ESG investment models, aligned to several of the same social and ethical principles, there exists a compelling opportunity in the Middle East for investors to look to Islamic finance as a route to creating a more ESG-compliant, more socially responsible investment portfolio. The
40
Christophe Lalandre, Senior Executive Officer at Lombard Odier ADGM Branch and Soumaya Hissoussi, Senior Vice President, Lombard Odier ADGM Branch
economic, societal and environmental upside can be seen clearly. For instance, with the growing d e m a n d fo r I s l a m i c c o m p l i a n t investment solutions in the Middle East and the necessity for a circular economy, the Sukuk market is an ideal vehicle through which to finance projects focused on addressing climate change and environmental regeneration. The capital of a green Sukuk is used to
Banking and Finance news in the MEA market
finance assets or projects that address environmental issues and investors receive a profit that is derived from green revenues. What does this all mean? Essentially, that Islamic finance and Islamic compliant assets will be integral in unlocking the opportunity to increase access to investment strategies that offer more sustainable, long-term wealth creation. In doing so, investors can align with increasing demands for adherence
