The Islamic Finance Council UK (UKIFC) in partnership with the UK Government, convened the inaugural Islamic Finance & UN Sustainable Development Goals (SDGs) Taskforce through a virtual meeting in early July bringing together over 40 global Islamic finance leaders.
The meeting explored the role Islamic finance can play in addressing the US$2.5 trillion SDGs funding gap as part of the post-Covid-19 economic recovery. With assets expected to reach US$3.8 trillion in 2022, Islamic finance is one of the fastest growing sectors in the global financial industry. Achieving the 17 Sustainable Development Goals (SDGs) agreed in the UN’s 2030 Agenda for Sustainable Development will take over US$5 trillion per year investment with the current financing gap standing at around US$2.5 trillion per year.
The UN’s SDGs are the blueprint to achieving a better and more sustainable future for all, addressing issues such as climate change, education and equality. Achieving the SDGs requires a coordinated global effort with Governments and private sector, including the financial services sector as a whole
The UK Government is the Taskforce’s first Country Partner with the expectation that other countries will join accordingly. John Glen, Economic Secretary to the Treasury and City Minister, reiterated in the meeting: “I am committed to strengthening the UK’s Islamic banking sector and ensuring the UK remains the leading Western hub for Sharia’a-compliant financial products and institutions. Islamic Finance can play an important role in unlocking the investment needed to deliver sustainable development goals and I look forward to seeing the practical ideas the Taskforce will generate.”
Representatives from UK-based Arabesque Asset Management, Bank of London and the Middle East, DDCAP Group, Gatehouse Bank, GIB UK, SMBC Europe and TheCityUK were joined by practitioners from Africa, the Gulf Cooperation Council (GCC) region and South East Asia to discuss the need for the Islamic finance sector to move from talk to collective action to support the achievement of the Global Goals by 2030.
Dr Bandar Hajjar, President of the Islamic Development Bank (IsDB), also addressed the meeting and welcomed the initiative calling for greater cooperation between the public and private sectors and to use the SDGs to inspire financial innovation.
Omar Shaikh, UKIFC Advisory Board Member, chairing the meeting explained that
“despite a natural alignment our analysis suggests that few Islamic financial institutions are engaged in the SDGs. As we enter the decade of delivery, we have convened some of the leading global figures in Islamic finance to consider the steps to be taken to raise awareness of the Global Goals and inspire practical action amongst Islamic financial institutions.”
Key discussion points included:
- The SDG financing gap can be closed by mobilising 1% of the global capital market value.
- Forecasts show that the economies of 20% of IsDB member states will shrink in 2020.
- UNDP estimates that 100 million people will fall back into poverty in 2020.
- The Taskforce has the opportunity to:
- i) Create a platform to encourage and support collaboration and practical action.
- ii) Develop a campaign to support Islamic financial institutions and their stakeholders to understand and engage with the SDG agenda.