A Comparative Analysis of Existing Models for Assessing Sustainability in Islamic Banks
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Abstract
This study conducted a comparative analysis of existing models for assessing sustainability in Islamic banks, focusing on three prominent frameworks: the Sustainability Performance Index (SPI), the Quadruple Bottom Line (QBL), and the integration of Environmental, Social, and Governance (ESG) principles with Maqasid Shari’ah. While conventional ESG frameworks emphasize environmental and social governance, Islamic banks operate under Shariah law, necessitating the inclusion of Islamic ethical principles in sustainability assessment. The paper highlights the strengths and weaknesses of each model in addressing the unique sustainability challenges faced by Islamic banks. The SPI provides a holistic assessment incorporating both financial and non-financial indicators, but often lacks focus on Islamic normative aspects. The QBL (4Ps) framework introduces a spiritual dimension with the ‘Prophet’ component. The integration of ESG and Maqasid Shari’ah aligns sustainability with Islamic values but requires further research for practical application. This study aims to contribute to the development of a more comprehensive and effective sustainability assessment model for Islamic banking.
Keywords: Islamic banks, sustainability assessment, Sustainability Performance Index (SPI), Quadruple Bottom Line (QBL), ESG-Maqasid Shari’ah Integration, Shariah compliance.
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ISRGJEBM2092024.pdf
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