Publication:
Incorporating sustainability agenda in sukuk: evidence from Bangladesh
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Date
2026
SDG:
Abstract
As of December 2025, Bangladesh has issued six government sukuk and two corporate sukuk. All of these, except for the second corporate sukuk, have integrated a sustainability agenda for the use of proceeds. This paper aims to analyse the evidence on how these sukuk incorporate sustainability agendas; and to assess their impact on the sukuk issuance process and post-issuance reporting
practices. A descriptive research design, utilising both primary and secondary sources, was employed. Existing literature was reviewed to identify the drivers and challenges influencing the issuance of sustainability-based instruments globally. Additionally, the prospectuses and information memorandums for sukuk issued in Bangladesh were examined to identify sustainability-related disclosures. The regulations governing both government and corporate sukuk were also reviewed. Semi-structured interviews were conducted to validate the findings from the secondary data and to gain deeper insights into experiences related to incorporating sustainability agendas in sukuk. The research finds that, although regulatory bodies have introduced initiatives to promote sustainability, additional steps are necessary. Additionally, third-party verification and impact reporting for sustainability-based issuances are inadequate. Although issuers generally demonstrate awareness of sustainability issues, there is a significant lack of investor demand, primarily due to insufficient awareness and incentives. To the best of the researchers� knowledge, this is the first study to systematically examine how sustainability is operationalised in sukuk issuance in Bangladesh, addressing a significant research gap, as the existing literature predominantly focuses on theoretical frameworks and empirical analyses of causal impacts. This study examines sukuk in Bangladesh�s nascent market, which has seen only a few issuances. This may constrain the generalisability of the findings to more mature markets. The limited disclosure practices also restrict the ability to assess the causal impacts of the findings. The research findings provide valuable insights into the challenges an emerging market such as Bangladesh faces when incorporating a sustainability agenda in sukuk. These insights will aid in developing effective sustainability policies for Bangladesh and similar markets, standard setters, and multilateral organisations.
Keywords
Bangladesh , Green bond , Green sukuk , Sustainability agenda , Sustainable finance
Citation
Ahmed, M. U., Hossain, M. M., & Tabet, I. (2026). Incorporating sustainability agenda in sukuk: Evidence from Bangladesh. International Journal of Islamic Finance and Sustainable Development. 18(1), 22�42. https://doi.org/10.55188/ ijifsd.v18i1.1189
Publisher
ISRA Institute
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