A structured literature review on green sukuk (Islamic bonds): implications for government policy and future studies

Abstract

Purpose Green sukuk (Islamic bonds) is one of Islamic financial instrument as an alternative financing source for supporting green finance projects in several sectors such as renewable energy or climate change problems. The aim of study is to present an understanding of the issues, explore the lesson for government policy and identify the potential for future studies directions. Design/methodology/approach This study conducted a literature review on green sukuk or Islamic bonds based on eight journal databases. The authors have carried out a strict selection of journals that are only indexed by Scopus and are protected from predatory journals. Findings This study has selected 7 of 118 published articles on green topics. This study has found that 50% of green sukuk research is dominated by a theoretical qualitative approach. While research that uses a quantitative or empirical approach is still below 30%, followed by using mixed methods. This study finds that research discusses green sukuk on Sustainable Development Goals (SDGs) or environmental issues, especially climate change, COVID-19 issues and green financial reporting. In addition, in the existing literature, this study found that green sukuk has main advantages instead of green bonds where green sukuk must comply with sharia principles, namely, being free from usury, interest and uncertainty. Practical implications This study analyzes two important implications, namely, first, the implications of government policies regarding the potential for issuing green sukuk in supporting all programs on the agenda for the 2030 SDGs, especially controlling and preventing the adverse impacts of global climate change; second, the implications for further research, further researchers can refer to the results of this review to make it easier to find new research things about the relationship of green sukuk with SGDs. Originality/value To the best of the authors’ knowledge, this paper is the first review paper that structurally reviews the previous literature on green sukuk (Islamic bonds) based on reputable publisher journals that have been indexed by Scopus.