Sustainable, responsible #investing provides opportunities for #Sukuk #issuance

RAM Ratings has collaborated with Saturna Sdn Bhd to examine the similarities and explore the potential convergence between Islamic finance and sustainable and responsible investing. SRI has become increasingly more important in line with rising awareness about the environment, social and governance issues among regulators and investors.
The growth of SRI assets has been gathering momentum, having expanded from $13.3 trillion in 2012 to $21.4 trillion in 2014 and outpacing the growth of global professionally managed assets with a record expansion of 61 per cent.
The embodiment of SRI with the principles of fairness, equality and ethics reflects the same philosophies as those of Islamic finance, said RAM Ratings. In fact, the overlapping core values between Islamic finance and SRI could offer a solution vis-a-vis penetrating the conventional market and providing the impetus to mainstream Islamic finance. Furthermore, linkages with the Sukuk market may effectively build up a sustainable sukuk supply base, which will have a tremendous multiplier effect on staging Islamic finance’s next phase of growth.
RAM Ratings is working to establish a meaningful presence in the SRI market. On 26 May 2016, RAM became one of the signatories to the United Nations-supported Principles for Responsible Investment’s Statement on Environment, Social and Governance in Credit Ratings. The PRI aims to better align investors and credit rating agencies with the values of ESG, given the importance of institutional credit ratings to the global debt capital markets. The PRI initiative represents RAM’s first steps towards contributing to the development of a more sustainable global financial system.