The Reviews on Sustainable and Responsible Investment (SRIs) Practices According to Maqasid Shariah and Maslahah Perspectives

The present study aims to explore SRIs practices based on Maqasid Shariah and Maslahah's points of view. A qualitative method via content analysis document was advocated to address the link between all concepts. The analysis revealed that SRIs, Maqasid Shariah and Maslahah share similar aims and goals to promote better environmental practices and social and governance issues. Thus, the paper concludes that the concept of SRIs does not contradict Maqasid Shariah and Maslahah in Islamic perspectives. However, a few criteria in the Environmental, Social and Governance (ESG) concept that govern the SRIs practices like promoting human rights, freedom of expression, and censorship need further clarification to align with Shariah principles. The paper can enlighten the reader, especially in terms of the capabilities of SRIs practices (which is from West philosophy) to suit Maqasid Shariah and Maslahah in Islamic perspectives.JEL Classification: G2, G4, I13, N2How to Cite:Wahab, M. Z. H., & Naim, A. M. (2021). The Reviews on Sustainable and Responsible Investment (SRIs) Practices According to Maqasid Shariah and Maslahah Perspectives. Etikonomi, 20(2), xx – xx. https://doi.org/10.15408/etk.v20i2.18053.

Profitability and Firm Value: Does Dividend Policy Matter for Indonesian Sustainable and Responsible Investment (SRI)-KEHATI Listed Firms?

This study investigates the potential factors explaining the inconsistent relationship between profitability and firm value. Specifically, it examines whether dividend policy contributes to the profitability–firm value relationship and determines the form of the moderating variables. We use a unique data set from the Indonesian capital market, with sustainable and responsible investment (SRI)-KEHATI-listed firms from 2010 to 2019. Adopting hierarchy moderating analysis, the results show a positive direct relationship between profitability and firm value. Moreover, the profitability–firm value relationship becomes stronger with a higher dividend policy ratio. We complement this with evidence that the dividend policy plays a role as a pure moderator in more sustainable and responsible firms. A sensitivity battery analysis and the endogeneity concern show consistent results as the baseline model, implying that the model is robust to different conditions. Additional tests revealed that the dividend policy is more prominent in low-leverage enterprises, low-intensity advertising firms, and during the financial service authority’s post-dividend policy regulation phase. The implication of our study is that corporate policy and country regulation play a role as a potential competitive strategy to increase shareholder value for SRI-KEHATI-listed firms.

ESG-Factors and Responsible Investment in the Focus of Strategic Development

Achieving the sustainable development goals laid down in the national projects of the Russian Federation requires the formation of new strategic guidelines for companies. They can be most succinctly represented by the concept of ESG factors (environmental, social, managerial), which in turn are closely related to the concept of sustainable and responsible investment, which directly addresses financial issues in the light of global risks of climate degradation, ecology, and corporate governance. Revealing the essence, role and place of strategic management based on ESG factors, the authors justify the necessity and possibility of shifting the emphasis of the financial investment market towards responsible investment. The article discusses its main elements, the theory of the relationship of ESG factors with the financial performance of firms, driving the interests of investors, and provides approaches to investment that contribute to sustainable development in various ways.

Assessment on the ASEAN standards to support sustainable and responsible investments (SRIs) and green bonds

This paper aims to analyse the standards in promoting sustainable and responsible investment (SRIs) and green bonds among ASEAN countries. Thus, to progressively reach these objectives, this paper applied content document analysis and expert interviews. This paper discusses in detail the three ASEAN’s standards issued by the ASEAN Capital Markets Forum (ACMF) to support SRIs and green bonds, namely the ASEAN Green Bond Standards 2017, the ASEAN Social Bond Standards 2018 and the ASEAN Sustainability Bond Standards 2018. Besides, this paper also explores the strengths and the weaknesses of the issuances of these ASEAN standards. The limitations of this research are that it is entirely conceptual, and its' analysis is based on secondary data sources.

Sustainable and responsible investment funds in Europe

Purpose The sustainable and responsible investing (SRI) is the part of sustainable investment which focusses on mutual funds. The purpose of this paper is to map and evaluate all the active European SRI funds, their performances and correlation with the national identity. Design/methodology/approach The sample of the research was analysed with descriptive statistics, mainly the frequency, the mean and the correlation analysis. A well-known volatility is represented by the synthetic risk and reward indicator (SRRI). Other two ratings are the environmental, social and governance (ESG) funds score distribution and the ESG funds letter rating distribution. Findings SRI investment may seem to be performing better than in the funds with a different focus. The segment of SRI funds will grow for the next decade. Research limitations/implications There is a lack of definitions and clear metrics for sustainable investing. For better performance, it would be also appropriate to examine each country separately. Practical implications This paper is part of the project targeting to design a model and methodology of SI evaluation taking into account ESG factors and risks, including profitability in a selected sector. This model can be used by investors for better decision-making. Social implications The paper focusses on the funds selecting investments that fulfil ESG criteria, which are part of the social responsibility and sustainability. Originality/value An analysis of the current approaches to evaluating investments shows that the key barrier in the transitions to sustainable investment is not taking into account the ESG factors. The research in this paper includes the ESG factors in the evaluation.

Successful Models of Islamic Social Finance Initiatives

Islamic social finance covers the traditional Islamic instruments based on philanthropy as well as modern forms of Islamic financial instruments such as Islamic microfinance, sustainable and responsible investment (SRI), sukuk, and takaful. Amanah Ikhtiar Malaysia (AIM) is one of the earliest and long-standing Islamic micro-finance institutions in Malaysia, established more than 32 years ago. This chapter examines the Islamic microfinance initiatives of AIM to highlight some of the lessons that can be learnt from its long and successful involvement in microfinance and social finance in Malaysia. The discussion starts with a brief history of AIM, followed by deliberations on AIM's microfinance schemes in terms of their main features and strengths, products, and mechanisms and Shariah compliance aspects. The chapter concludes with some recommendations for further improvements to AIM's operation and outreach.

Sustainable and responsible investment in Indonesia and Malaysia: an event study on SRI-KEHATI and FTSE4GBM Indices

The purpose of this research is to examine the effect of SRI index on abnormal return of added to and deleted stocks of two countries, Indonesia (SRI-KEHATI) and Malaysia (FTSE4GBM). The effect was examined using CAAR of the stock around index announcement. This research was conducted using event study methodology. The samples used in this research are all the stocks that were added to and deleted from SRI-KEHATI index on 2009-2018 announcements and FTSE4GBM index on 2014-2018 announcements. The result of hypothesis test shows that SRI index announcement has negative significant effect to the added stocks to SRI-KEHATI’s CAAR before announcement, after announcement and cumulative periods, to added stocks to FTSE4GBM’s before announcement and cumulative periods, and to deleted stocks from FTSE4GBM’s after announcement and cumulative periods. SRI index announcements has positive significant effect to the deleted stocks from SRI-KEHATI’s CAAR before announcement. Information on SRI index announcements has effects to the decisions made by investors. Indonesian investors reacted negatively toward added stocks but not choosing deleted stock either after announcements. Malaysian investors reacted negatively toward both added and deleted stocks, added stocks are perceived better even if positive CAAR are insignificant after announcements.

Sustainable and Responsible Investment: Concept and the Commonalities with Islamic Financial Institutions

This paper aims to highlight the Sustainable and Responsible Investment (SRI) concept, similarities, and opportunities with Islamic financial institutions (IFIs), especially in Malaysia's perspectives. This paper is conceptual., thus the methodology used in this paper is qualitative, focusing on document analysis method by analyzing previous literature, books, reports, official website, and articles. Based on the analysis, SRIs and IFIs share the same fundamental aim, which is to utilize the funds with high morals and ethics. Besides, the analysis also indicates that SRIs and IFIs have shown significant growth over the last two decades and became the most rapidly growing sectors. In the context of the opportunities, both concepts can become a new value proposition and product innovation in order to capture the future preferences of investors and customers. The IFIs and SRIs are capable of bridging the gap both entities considering their fundamental mutual aim, which is to utilize the funds through high morals and ethics.JEL Classification: E22, G20How to Cite:Wahab, M. Z. H., & Naim, A. M. (2020). Sustainable and Responsible Investment:Concept and the Commonalities with Islamic Financial Institutions. Etikonomi: Jurnal Ekonomi, 19(1), 141 – 154. https://doi.org/10.15408/etk.v19i1.13772.