DEVELOPING THE ASEAN ISLAMIC GREEN ECONOMY FRAMEWORK: INTEGRATING SHARIAH PRINCIPLES WITH SUSTAINABLE FINANCE POLICIES

Abstract

This study explores the integration of sustainability and green finance within ASEAN’s Islamic economic framework by examining how Islamic principles—such as maqasid al-shari‘ah, maslahah, and khalifah fil ardh—can guide regional green economy policies and strengthen the implementation of sustainable financial instruments, particularly in Indonesia, Malaysia, and Brunei Darussalam. Using a qualitative descriptive–analytical approach, this research combines library study and comparative policy analysis with semi-structured interviews involving experts from Islamic financial institutions, regulators, and international organizations. Data from academic publications, policy documents, and reports by institutions including the World Bank, UNDP, IsDB, and the ASEAN Secretariat were validated through triangulation and analyzed using Miles and Huberman’s model of data reduction, data display, and conclusion drawing. The findings reveal that innovative instruments such as green sukuk, Islamic microfinance, and waqf-linked investments significantly influence sustainable development in ASEAN’s Islamic finance landscape. Although Malaysia, Indonesia, and Brunei Darussalam have advanced through frameworks like Malaysia’s SRI Sukuk Framework (2014), Indonesia’s Green Sukuk (2018), and Brunei’s Sustainable Finance Framework (2023), the region still faces challenges in regulatory alignment, institutional capacity, and the absence of a unified green finance taxonomy. To address this, the study proposes the ASEAN Islamic Green Economy Framework (AIGEF), comprising regulatory, financial, and institutional dimensions to synchronize regional green economy policies. Practical implications include the harmonization of shariah-based and ESG standards, establishing an Islamic Sustainable Finance Hub for research and innovation, incorporating Islamic Environmental Economics into academic curricula, and optimizing Islamic social funds—such as zakat, waqf, and sadaqah—for environmental protection and community sustainability initiatives. The study’s originality lies in its conceptual linkage of sustainability and green finance with ASEAN’s Islamic economic architecture, offering the AIGEF as a pioneering model that merges maqasid al-shari‘ah with the regional sustainability agenda, promoting ethical, spiritual, and ecological harmony as the foundation of sustainable economic progress.