| Summary: | Islamic finance is founded on the intended outcome of Maqasid Shari’ah, which promotes value creation and harm prevention. This value resonates well with sustainability principles that advocate businesses to create a positive impact on the environment, society, and economy. These shared values put Islamic finance naturally at the forefront to drive the sustainability agenda. Islamic finance and environmental, social, and governance (ESG) investing approaches have many shared principles and possess solid practices and policies. The Islamic finance industry will continue to expand as it draws new participants and evolves its products and service offerings to take a more active role in the global effort to achieve the Sustainable Development Goals (SDGs). In this regard, Shariah-compliant ESG investment is expected to continue recording significant growth as the strong demand for institutions to deploy funds ethically and awareness of climate change and social justice expands. This chapter explores the contemporary issues and challenges concerning Islamic sustainable finance to provide fresh perspectives on the changing world of Islamic finance. Challenges include high costs and legal issues, which hinder Islamic financial institutions from fully embracing and committing to the sustainability agenda. © 2024 selection and editorial matter, Mohd Ma’Sum Billah, Rusni Hassan, Razali Haron and Nor Razinah Mohd Zain; individual chapters, the contributors.
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