Blending Islamic finance and impact investing can be key in achievement of the Global Goals
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Jeddah, Saudi Arabia – A new report launched this week by the Islamic Development Bank (IDB) Group and the United Nations Development Programme (UNDP) shows Islamic finance based impact investing can significantly help the achievement of the Sustainable Development Goals (SDGs) in the IDB member countries. Impact investing refers to investments made with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. And the report titled "I for Impact: Blending Islamic Finance and Impact Investing for the Global Goals" shows the compatibility and convergence between Islamic finance and impact investing. UNDP's Istanbul International Centre for Private Sector in Development (IICPSD) worked with the Islamic Research and Training Institute (IRTI) of IDB Group for the report. In September last year, IDB and the Center co-organized, a side event "Islamic Finance and Impact Investing for the SDGs: The Way Forward" at the 71st UN General Assembly, to highlight the contributions of Islamic finance to the SDGs, as well as reviewing the possible areas of cooperation between relevant partners.
Following the successful outcomes of this collaboration, the two organizations have joined efforts for conceptualizing Islamic finance based impact investing. The report was released as the first step on the way to build an Islamic finance based impact investing ecosystem. It offers the key arguments on the convergence of Islamic finance and impact investing as well as how to strategize this. The report was launched at the 12th IDB Global Forum on Islamic Finance in Jeddah, by IDB President H.E. Dr Bandar Hajjar and UNDP Assistant Secretary-General, Mr. Magdy Martinez Soliman. Speaking during the launching, Mr. Soliman stated, "UNDP and the Islamic Development Bank are uniquely positioned to advance the area of convergence between Islamic finance and impact investing because of their convening power, global reach, technical expertise and impartiality." "The report launched today provides our joint vision on advancing the role of Islamic Finance and Impact Investment in financing and advancing SDGs matured over the last year" he added. Since 2015, UNDP and IDB have been discussing how to strengthen their cooperation and capitalize on opportunities to scale up their engagement, including joining forces to achieve the 2030 global development agenda. In this regard, the report is a major step for solid collaboration between both sectors and institutions.
About the Global Islamic Finance and Impact Investing Platform (GIFIIP) The impact investing industry, although growing and expanding fast, needs support for its mainstreaming. Developed markets and countries such as the G8 and OECD member countries have explored the impact investing concept and embraced it as a policy. However, in many developing countries and especially among IDB member countries, impact investing needs support. With an aim to create a collaborative working space among stakeholders to address common challenges, and nurture an Islamic finance impact investing business ecosystem, IICPSD and the IDB established the Global Islamic Finance and Impact Investing Platform (GIFIIP) in 2016. GIFIIP aims to position Islamic finance impact investing as one of the leading enablers of SDG implementation around the world through private sector engagement.