Environment, Social, Governance

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More wealthy Asians turn to philanthropy - but on the quiet

Asia's wealthy have been quietly stepping up their commitment to philanthropy, pouring significant fortunes into causes such as education - and doing so well away from the sort of limelight that their Western counterparts often enjoy. Many established private banks have dedicated units to advise their wealth management clients on matters related to philanthropy. Credit Suisse Private Banking Asia Pacific is one of them, having created SymAsia five years ago to help its clients set up charitable foundations. Singapore has been very much part of Asia's growing philanthropic community. The Singapore Government has moved to encourage more giving.

The Road to Financial Inclusion: Solid Progress, Big Challenges

The success of the microcredit years showed us that it is not poverty that generates financial exclusion but rather the opposite: financial exclusion generates poverty. Unfortunately, microcredit alone was not enough to solve the problem. Although it was demonstrated that access to, and the use of, savings accounts, credit, insurance, etc. had a positive impact on opportunities for the poorest, no single financial service was sufficient to trigger major progress. In the current conversation around financial inclusion, emphasis is now placed on the fact that it is not enough to offer one or another service; we need them all, and all at the same time.

Bill Gates looking to reduce Muslim poverty

Microsoft founder Bill Gates says a growing culture of philanthropy in Muslim countries may draw in more donations for his Lives and Livelihood fund aimed at reducing poverty in the Muslim world. Gates spoke on the sidelines of the Heroes of Polio Eradication Awards in Abu Dhabi on Sunday. He said low oil prices and tight budgets in the Gulf are making it harder to raise money for the fund, but that the Muslim world is home to some of the world's top donors. The Gates Foundation pledged $100 million to the fund, and the Islamic development bank put up another $100 million. This leaves the donor target of $300 million. Gates also said the world is "on track" to eradicate Polio by 2019.

Crowdfunding campaign gave destitute Syrian refugee father a new life in Beirut

Abdul Halim al-Attar, 33, fled the war in Syria more than three years ago, moving first to Egypt and then to Lebanon. His wife returned to their home country just months after their departure, but Mr al-Attar resisted; he didn't want to go back to a place where he saw no future for their children, a nine-year-old son and a four-year-old daughter. Day after day, Mr al-Attar relied on selling pens and other small items to support his family. At the time, Mr al-Attar was receiving the equivalent of $US36 ($50) a month from the UN Refugee Agency and supplementing that with painstaking sales - enough for a rundown apartment and the bare necessities, but not to send his son to school. An Indiegogo campaign raised $US188,685 for Mr al-Attar.

IDB Group president underlines financing and capacity building to preserve climate

President of the Islamic Development Bank (IDB) Group, Dr. Ahmad Mohamed Ali, led a high-level delegation to the “United Nations Framework Convention on Climate Change (UNFCCC)’s 21st Session of the Conference of the Parties (COP21)” under way in Paris, France. Addressing a side event dubbed: “Climate Change: Financing and Capacity Building Challenges”, Dr. Ali expressed his pleasure to see 51 of IDB Group member countries had submitted their Intended Nationally Determined Contributions (INDCs). According to Dr. Ali, the IDB Group, in 2014, launched its Renewable Energy for Poverty Reduction Program to address the energy challenges of its member countries via application of renewable energy resources.

IDB Group President underlines financing and capacity building to preserve climate

President of the Islamic Development Bank (IDB) Group, Dr. Ahmad Mohamed Ali, led a high-level delegation to the "United Nations Framework Convention on Climate Change (UNFCCC)'s 21st Session of the Conference of the Parties (COP21)" underway in Paris, France. Addressing a side event dubbed: "Climate Change: Financing and Capacity Building Challenges", Dr. Ali expressed his pleasure to see 51 of IDB Group member countries amongst the more than 180 countries had submitted their Intended Nationally Determined Contributions (INDCs). The IDB Group President, stated that financing and capacity building featured prominently in the INDCs as two major areas for preserving environment.

Zuckerberg pledges 99% of Facebook stock to charitable causes

Facebook cofounder and CEO Mark Zuckerberg is celebrating the birth of his new daughter by pledging to give away 99% of his Facebook shares. Money from the shares, currently valued at $45 billion, will go to projects and charities that advance human potential and promote equality. The donations will take place over their lifetime, and the exact worth of the shares will likely change. Zuckerberg will not give away more than $1 billion in stock a year during the next three years, according to a filing with the SEC. He will keep his majority stake in Facebook, and thus voting control, for the foreseeable future.

Banks pledge to support green finance

The nation’s eight largest banks, representing 46 % of national banking assets, have committed to implementing sustainable financing as part of global environment goals.

Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA), Bank Negara Indonesia (BNI), Bank Muamalat, BRI Syariah, Bank Jabar Banten (BJB) and Bank Artha Graha Internasional signed the commitment with the Financial Services Authority (OJK) and the World Wildlife Fund (WWF) Indonesia on Monday. The commitment was manifested in a pilot project called “first step to becoming a sustainable bank”, marking a big move taken by the banks less than a year after the OJK launched the 2014-2019 Sustainable Financial Roadmap, according to OJK head Muliaman D. Hadad.

“I hope these eight banks, which are the prime movers in this project, can encourage other banks and financial institutions to join the country’s implementation of sustainable finance,” Muliaman said in his speech. Through the green banking pilot project, Muliaman said participating banks were expected to balance their pursuit of profits with willingness to conserve the environment, serving as examples to their peers.

What is the social contract and why does the Arab world need a new one?

The ‘social contract’ is an idea that dates back to the ancient Greeks, and refers to the implicit agreement among members of a society that defines their relationship with each other and the state. That relationship holds the key to unravelling the puzzle of the ‘Arab Spring.’

To development economists, the uprisings that started in Tunisia and spread to several countries in the Arab world in 2010-11 came as somewhat of a surprise. For the previous decade, almost all the indicators of economic well-being were strong and improving. GDP growth was substantial, at about 5 percent a year. Extreme poverty (people living on $1.25 a day) was low and declining. Conventional measures of inequality, such as the Gini coefficient, were lower than in other middle-income countries, and in some cases declining. In Egypt and Tunisia, the per-capita income of the bottom 40 percent was growing faster than the average. In terms of human development, the Middle East and North Africa region recorded the fastest decline in child mortality rates and the steepest increase in school attainment.

UAE, Malaysia show willingness to issue green sukuk

Currently, there is $65.9b of outstanding in labelled green bonds, with transport and energy remaining the dominant themes. Countries such as the UAE and Malaysia have shown the willingness to issue green sukuks, and advisers such as Climate Bonds Initiative hope to have at least one [issued] in 2016, the chief executive officer of the advisory firm told Gulf News.
“Dewa (Dubai Electricity and Water Authority) has said that they are considering issuing a green sukuk for clean energy,” said Sean Kidney, chief executive officer of Climate Bonds Initiative. The firm has a sukuk advisory group in the UAE, trying to promote issuance.

Islamic Bank May Support Green Sukuk for Renewables Projects

The Islamic Development Bank indicated that it may issue green sukuk bonds compliant with religious law and increase lending for climate-related projects with an announcement at the United Nations global warming conference in Paris at the end of the year.
“Estimates for the 2030 agenda indicate that we need to move from billions to trillions of dollars of support annually for sustainable development,” Savas Alpay, chief economist of the IDB, said in a phone interview. “Traditional sources of development finance will not be enough. We must also look at non-traditional sources. We will be using Islamic finance to bring new resources to the table.”
Khazanah Nasional Bhd, Malaysia’s state-owned sovereign wealth fund, issued green sukuk last November after introducing guidelines for socially responsible debt in August 2014. It was the second entity after the London-based International Financial Facility for Immunization announce plans to sell ethical-based sukuk.
Green Sukuk

Islamic Social Finance Report 2015 released

The 2015 issue of the Islamic Social Finance Report focuses on the zakah, awqaf and Islamic microfinance sectors in six countries in the sub-Saharan Africa - Sudan, Nigeria, Kenya, Mauritius, South Africa and Tanzania. This issue of the Islamic Social Finance Report (ISFR) presents the trends, future challenges and prospects for the various segments of the Islamic social finance sector in Sub-Saharan Africa. The study involved collection and analysis of data and information pertaining to legal and regulatory frameworks as well as good and bad practices at macro, meso and micro levels. The observations have serious policy implications and therefore, may form the basis of further research and policy dialogue.

Ensuring financial inclusion

One of the featured sessions at the Global Islamic Economy Summit from 5-6 October was on the role of Islamic finance in financial inclusion. This is an interesting subject because it has primarily been seen only from the perspective that Islamic finance is able to promote inclusiveness by offering a Shari'ah-compliant solution to people whose exclusion is driven by their reluctance or unwillingness to engage with the conventional financial sector. While this represents an important segment of the market for Islamic finance, this mindset limits its potential greatly to just those Muslims located in jurisdictions friendly to Islamic finance and within those countries to the Muslims who have access.

IRTI launches Islamic Social Finance Report 2015

The Islamic Research and Training Institute (IRTI) of the Islamic Development Bank Group has launched the Islamic Social Finance Report 2015, which is the second edition in the series. This edition of the ISFR focuses on the Sub-Saharan Africa, outlining the regional trends and prospects as well as proposing policy recommendations for the Islamic social finance sector, which includes zakah, waqf and Islamic microfinance. It analyzed the regulatory environments and practices in six selected countries, namely Sudan, Nigeria, Kenya, Mauritius, South Africa and Tanzania.

How Some Long-Term Investors are Fighting for Sustainability

Last week, Ceres and its Investor Network on Climate Risk released an illuminating analysis of how some major companies are responding to shareholder engagement on environmental, social and governance (ESG) issues. The report, which covers the 2014 and 2015 proxy seasons, makes clear that long-term investors are putting increasing pressure on public companies to undertake ESG initiatives. Moreover, while most company responses are incremental and tailored to placate pesky activist shareholders — and others fall short entirely — these investors have won some significant sustainability victories.

Financial Inclusion Opportunities and Challenges in Tunisia

Financial inclusion is one of many the areas that caught the new public authorities’ attention in Tunisia. A decree-law was passed in November 2011 that authorized the establishment of credit institutions dedicated to low-income people. It also created a modern regulatory agency, the microfinance supervisory authority. Beyond micro-lending, the Ministry of Finance now aims at modernizing the entire financial sector in Tunisia by 2020. Such a plan is timely and provides hope for further financial deepening. In this regard, a recent snapshot on financial inclusion completed by CGAP and the World Bank provides insights.

Islamic Finance: Strong Standards of Corporate Governance Are a 'Sine Qua Non'

Proper corporate governance practices in financial institutions should provide added value by enhancing the protection of depositor and investor rights, facilitating access to finance, reducing the cost of capital, improving operational performance, and increasing institutions’ soundness against external shocks. Ensuring strong corporate governance standards is thus essential to the stability and health of all financial institutions, worldwide. Good governance is an important priority for Islamic finance. Thus, the General Council for Islamic Banks and Financial Institutions (CIBAFI) and the World Bank’s Finance and Markets Global Practice recently organized the conference on “Corporate Governance for Islamic Financial Institutions: Lessons from Recent Global Developments” in Jordan.

#GlobalGoals? The truth about poverty and how to address it

Despite the UN’s ambitious claims, all the indications are that the Sustainable Development Goals (SDGs) do not have the potential to “free the human race from the tyranny of poverty and want” or “heal and secure our planet”. On the contrary, the ‘new agenda for development’ fails to address the root causes of today’s interconnected global crises, perpetuates a false narrative about poverty reduction, and reinforces an unsustainable economic paradigm that is inherently incapable of reducing the true scale of human deprivation by 2030. There are many reasons to question the entire sustainable development initiative and the political-economic context within which it will be implemented.

Refugee Bank to provide financial inclusion for refugee crisis

The Digital Finance Institute, a Canadian not-for-profit, has entered into an arrangement with an Iranian firm and as the first part of the arrangement is joining forces with Sana Pardakht. The two sides will have bilateral cooperation on the role of innovation labs to drive technology, banking and finance, Bitcoin, smart cities and renewable energy, emerging payments, Iran’s potential to emerge as a finance hub post-sanctions, business opportunities in Iran and the growing importance of social banking with a case study on payments to solve financial inclusion for the refugee crisis.

GCC family businesses need to double down on governance

Family businesses in the GCC have made significant progress in putting corporate governance structures in place but are lagging when it comes to strict implementation — something that could eventually challenge their very existence, a study by the Gulf Family Business Council (GFBC) and McKinsey & Company has revealed. The study, which surveyed the largest GCC family-owned businesses, showed that only 33 per cent of GCC-based family businesses have fully implemented governance systems. The study recommends that the ‘rules of the game’ should be clearly stated to the next generation as early as possible to allow for effective succession planning and transition of leadership.

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