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Ecologies of green finance: Green sukuk and development of green Islamic finance in Malaysia

Liu, Felicia HM and Lai, Karen PY (2021) 'Ecologies of green finance: Green sukuk and development of green Islamic finance in Malaysia.', Environment and Planning A: Economy and Space, 53 (8). pp. 1896-1914.


In this paper, we analyse the recent development of green sukuk (often referred to as an Islamic green bond) since its issuance in Malaysia in 2017, and critically evaluate whether it addresses some of the existing contradictions of green finance. Using a financial ecologies approach, we examine Malaysia's configuration of green sukuk as drawing from the existing international green bond regime, partnership with the World Bank, and Malaysia's own experience and expertise in Islamic finance, with the objective of building Kuala Lumpur's competitiveness as a global Islamic financial centre. Through documents analysis and interviews with key market actors in Kuala Lumpur and other financial centres, our findings point to the emergent international adoption of green sukuk. While this achieves Malaysia's state-building objectives, specifically through expanding Malaysia's sukuk market and advancing its status as a frontier of Islamic financial innovations, the potential for improving the current green bond regime has been more doubtful. A key limitation is the incorporation of existing Green Bond Principles, which enables not only green sukuk's international acceptance but also renders it susceptible to greenwashing. By examining the intersection of different ecologies of green and Islamic finance, we reveal the contradictions and limitations of green sukuk in contributing to Malaysian state-building and climate action.

Item Type:Article
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Publisher statement:This article is distributed under the terms of the Creative Commons Attribution 4.0 License ( which permits any use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page (
Date accepted:20 July 2021
Date deposited:09 September 2021
Date of first online publication:19 August 2021
Date first made open access:09 September 2021

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