The IsDB has penned an agreement to collaborate with the International Capital Market Association (ICMA) and the London Stock Exchange Group (LSEG) to develop a practitioners’ guide for the issuance of green Sukuk.
The agreement, signed on the sidelines of the 28th Conference of the Parties of the United Nations Climate Change Conference, or COP28, hosted in Dubai, will see the parties develop a green Sukuk practitioners guide in line with the ICMA’s Green Bond Principles and Sustainability Bond Guidelines originally issued in June 2021.
It is envisioned to support the growth of green and sustainable Sukuk on the global arena by providing issuers and market participants with guidance on how the Islamic instrument can be labelled as green or sustainable through examples, case studies and best practice.
“We are fully committed to industry-level engagements to promote Islamic capital markets and Sukuk in particular. I am very pleased to see this initiative taking shape with our industry partners for the benefit of the wider global capital markets,” Dr Muhammad Al Jasser, the president of the IsDB, commented.
The to-be-developed guide represents the ICMA’s first practitioners’ guide explicitly for the Sukuk market. Notably, the IsDB and the ICMA collaborated on a knowledge sharing effort focusing on green, social and sustainability Sukuk for shaping the post-COVID-19 recovery in IsDB member countries in the months following the issuance of the Green Bond Principles and Sustainability Bond Guidelines.
Through aligning with the green bond principles, Nicholas Pfaff, the deputy CEO of the ICMA, believes that the guide will ensure global consistency in the international capital markets of voluntary best practices in sustainable finance.
The IsDB has issued several labeled Sukuk over the past few years, debuting its EUR1 billion (US$1.09 billion) Sukuk in late 2019. This year also saw the multilateral development bank tap the green capital market with its US$1.75 billion issuance in September.