In a recent column, Rushdi Siddiqui discusses his talk at the Bold Talks 2011 and focuses on an area that is overlooked too often within Islamic finance: corporate social responsibility and environmental impact analysis of projects financed by Islamic financial institutions. He notes that "not one Islamic bank is a member of the Equator, Carbon and/or Climate Principals, yet, the GCC has one of the largest carbon footprints".
I lamented this fact a little over 2 years ago and it is somewhat disheartening to see so little (read: nothing) be done to move Islamic finance into an area where it can claim to be taking the lead on something. While there are a number of financial institutions that do pay attention to their environmental responsibility, Islamic finance could be unique if they incorporated environmental stewardship within its core values.
I cannot offer a definitive opinion either way about whether incorporating environmental responsibility into the Shari'ah standards could be an option. However, one of the ways to approach it would be to treat environmental stewardship as a form of fulfilling our responsibility to protect the source of everything we have (which we are not allowed to destroy without destroying ourselves).
The reason why this would be an important step forward is that it would allow the Islamic financial industry to say with confidence that its values are inherently different from other industries. Not only is environmental responsibility important for the financial impact it can play in the industry's growth, it is one of the core values underpinning the industry and Islamic finance does not just promote environmental conservation because it makes good PR.
Environmental considerations are not the only area where this could be incorporated into the industry, but it is probably one of the easiest to explain. Ease of explanation of why Islamic finance differs from other financial sectors is key if we are to make Islamic financial institutions into "'most admired companies' that young people want to work for". Let's hope I'm not writing the same blog post 2 years from now!