Green Sukuk and Sustainable Finance: A Legal and Shariah Analysis of Islamic Capital Frameworks

Abstract

Objective: This study examines the legal, Shariah, and economic dimensions of green Sukuk as instruments of sustainable finance within the global Islamic capital market and evaluates their role in supporting environmental and developmental objectives. Theoretical framework: The analysis is grounded in Maqasid Al-Shariah, classical Islamic jurisprudence, and contemporary theories of sustainable finance, emphasizing the relationship between Islamic economic law and environmental stewardship. Literature review: Existing scholarship on Islamic finance, green bonds, and sustainable development is reviewed to assess the doctrinal foundations, regulatory frameworks, and practical applications of green Sukuk across different jurisdictions. Methods: The study adopts a qualitative doctrinal approach combined with comparative legal analysis and an examination of empirical data concerning green Sukuk issuances between 2020 and 2025. Results: The findings demonstrate that Islamic economic law possesses an inherent normative structure that is highly compatible with sustainable finance principles. Green Sukuk provide an effective mechanism for financing renewable energy, climate action, and sustainable infrastructure while advancing the objectives of the United Nations Sustainable Development Goals. Implications: The study highlights the need for greater harmonization between Shariah governance mechanisms and international green finance standards to facilitate wider market adoption and regulatory consistency. Novelty: The research provides an integrated legal and Shariah analysis of emerging green Sukuk frameworks and offers practical recommendations to enhance their contribution to economic justice and environmental sustainability.