Sri Sukuk to Achieve SDGs with a Special Reference to the Legal and Regulatory Framework in Malaysia

Abstract

Malaysia has the leadership in developing Islamic socially responsible investing (SRI) and green finance. This study aims to highlight the importance of issuing SRI sukuk to achieve sustainable development and point out the incentives which attract investors to participate in the SRI sukuk within its legal and regulatory framework. This study has adopted a qualitative approach by analysing previous literature, as well as examining Malaysian SRI regulatory framework provisions. This study found that Malaysia is the key actor in provision of an environment requisite for issuing Sukuk aligned with SDGs such as SRI sukuk and SDG Sukuk. Promoting financing for SRI projects through issuing SRI sukuk will meet the United Nations’ Sustainable Development Goals (SDGs). In order to attract more investors to subscribe to SRI sukuk, SC Malaysia is determined that SRI sukuk should be highly mandated to invest in green, social, sustainable, and waqf dimensions. Moreover, the Government of Malaysia (GoM) provides Tax incentives for SRI sukuk issuers, investors as well as brokers. For instance, the SRI sukuk issuer enjoys tax concessions on SRI sukuk issuance. Finally, SDG Sukuk Framework explains the Malaysian Government’s intention to utilize the SDG Sukuk to fund projects that will generate environmental and social benefits and also conform to sustainable development goals.