With an estimated 84% of the world's population identifying with a religious group, faith communities hold immense potential for mobilising action on climate change.
Islamic Finance stands out as a model that ensures financial structures promote fairness, shared prosperity, and climate justice.
By shifting investments away from fossil fuels and towards climate action, Islamic Finance can accelerate the transition to a greener, more equitable future.
Coinciding with the beginning of Ramadan, Joycelyn and Yewande bring this topic to the new episode of SystemShift, a Greenpeace podcast that explores how we can move from a world that serves the economy to an economy that works for people and the planet.
This episode features Tariq Al-Olaimy, Islamic Finance Advisor to Greenpeace MENA and Advisory Board Member for the UN Decade on Ecosystem Restoration.
Islamic Finance: faith-based, justice-driven
Islamic Finance operates on principles that align closely with sustainability and climate justice. It discourages harmful investments, promotes ethical, risk-sharing financial practices, and emphasizes social good over unchecked profit.
"It's to live up to our potential of creating flourishing conditions for all of life. This is what all of faith compels us and brings us forward to do", Tariq said.
This presents a unique opportunity: instead of perpetuating the same extractive and exploitative economic model that led us to this crisis, Islamic Finance offers an alternative built on cooperation, regeneration, and respect for the limits of Earth.
"Nature is about respecting planetary boundaries. It's about limits in a way that it's optimised for the flourishing of all of life. And our economy doesn't quite work that way", he adds.
The global Islamic Finance industry manages approximately US $4 trillion in assets, and this figure is projected to grow to US $6.7 trillion by 2027. Imagine the impact if even 5% of these assets were directed towards renewable energy and energy efficiency-it could unlock around US $4 billion for climate finance by 2030.
It's clear that there's money for climate action and social justice, it's just in the wrong place – as it was also exposed in a previous episode of the SystemShift podcast.
Blended finance: Unlocking climate investments
To scale up impact, a combination of public and private funding with Islamic financial tools such as Sukuk (Islamic bonds) is essential. This blended finance approach encourages risk-sharing, making it easier for diverse stakeholders to invest in climate resilience projects.
These investments can fund crucial sectors like sustainable agriculture, eco-friendly infrastructure, and renewable energy, particularly in marginalised communities and regions where climate change is hitting the hardest.
But we need to go beyond traditional climate finance solutions. Too many so-called green investments still operate within the same extractive mindset that has fueled the climate crisis in the first place.
"A lot of these so-called solutions for climate action still operate within the same extractive mechanistic worldview that has created this crisis", Tariq added.
Faith, Finance, and Climate Justice
For centuries, faith traditions have taught humanity how to live in harmony with nature, recognising it as more than just a resource for endless consumption.
"I come from a tradition that says you must read nature as if it is scripture. That the real classroom and lesson is nature", Tariq shared. This wisdom is crucial now more than ever, as we face the urgent need to redesign our economy to support life instead of exploiting it.
The urgency of the climate crisis demands action at all levels-from policymakers and investors to faith institutions, communities and individuals. Islamic Finance must lead, not follow, in driving this change.
By fully embracing climate justice and social equity, it has the potential to transform financial systems and create a sustainable future for all. As Tariq concluded: "What we need now is systems change and a systems shift".
What's our role as individuals? What can we do?
Here are some concrete things you can do:
– Listen to the Podcast for Earth, an initiative by Greenpeace MENA and The Arab Youth Green Voices Network that highlights issues related to Faith and the environment, Islamic values and protecting Earth, youth and the climate movement.
– Listen or watch the SystemShift podcast that inspired this blog post: do it on Apple Podcasts, Spotify, or Youtube (the video version is subtitled in Arabic, Bahasa and other languages).
– Learn more about Islamic Finance by visiting the Ummah for Earth website, where you can join as an individual or as an organisation.
– Download, read and share with friends and family, the Islamic Finance and Renewable energy report to know more about the sector and its potential to increase investments into renewable energy as a climate action tool.
