Islamic Finance and Circular Economy: Connecting Impact and Value Creation

Preface
Contents
Contributors
1 Islamic Finance and Circular Economy: An Introduction
1.1 Book Outline
1.2 Future Directions: Key Takeaways
1.3 Proactive Efforts Using Technology, Regulations, and Increase of Awareness Required
1.4 Recommendations
Part I Islamic Perspective on Circular Economy and Sustainability
2 Islamic Perspective on Circular Economy
2.1 Introduction
2.2 Literature Review
2.3 Circular Economy
2.3.1 History of CE
2.3.2 Advantages of CE
2.3.3 CE Business Models
2.4 The Idea of Circularity from Islamic Perspective
2.5 Promoting CE Models from Islamic Perspective
2.6 Conclusion: Key Shariah Takeaways for CE Models
References
3 Environmental Protection and Sustainable Development: An Islamic Perspective
3.1 Introduction
3.1.1 The High Objectives of the Shariah
3.2 Preservation of the Environment is Complementary to the Five Essential Values
3.2.1 Preservation of the Environment as a Shariah Objective
3.2.2 Ranks of Maqasid
3.2.3 Nature of the Shariah Provisions Relating to the Environment
3.3 The Precedent of Shariah in Sustainable Development
3.3.1 Waqf (Endowment) System:
3.3.2 Ihya’ Al-Mawat (Land Revival and Reclamation)
3.3.3 Validation of Productive Contracts, Such as Mugharasa (Planting Trees), Muzara’ah (Sharecropping), and Musaqat (Irrigation of Planted Trees).
3.3.4 Tolerating Uncertainty (Gharar) in Productive Contracts
3.4 Maqasid Maxims Relating to the Preservation of the Environment
3.5 Conclusion
References
Part II Convergence of Islamic Finance and Circular Economy
4 Circular Economy Financing: An Islamic Finance Perspective
4.1 Introduction
4.2 Financing Circular Economy
4.3 Islamic Finance and Circular Economy
4.4 Way Forward
References
5 Circular Economy, Green Economy, and Sustainable Development: Establishing the Interconnections and Discoursing the Role of Islamic Finance
5.1 Introduction
5.2 Sustainable Development
5.3 Green Economy
5.4 Circular Economy
5.5 Interconnections between Circular Economy, Green Economy, and Sustainability
5.6 The Role of Islamic Finance in Operationalizing Circular Economic, Green Economic, and Sustainability Models
5.6.1 Financial Sector Stability and Resilience
5.6.2 Inclusive Finance
5.6.3 Reducing Vulnerability of the Poor and Mitigating Risk
5.6.4 Contribution to Environmental and Social Issues
5.6.5 Islamic Finance and Circular Economy
5.6.6 Musharkah Cum Ijarah Model
5.7 Concluding Remarks and the Way Forward
References
6 The Circular Economy and Its Possible Collaboration with Islamic Economics and Finance
6.1 Introduction
6.2 Limitations of Circular Economy
6.3 Interdependent Utility Function and Social Finance
6.3.1 Interdependent Utility Function
6.3.2 Social Finance
6.4 Current Performance and the Need for New Directions
6.4.1 The Evolution of Islamic Banking and Finance (IBF):
6.4.2 Moving Beyond Profit: The Value-Based Intermediation (VBI) Agenda
6.4.3 Application of Circular Economy in the Environmental Policy: Lessons Learnt from Malaysia’s Waste Management
6.5 Circular Economy and Social Finance Discourse (CESF): Opportunity for a New Decision-Making Model
6.6 The Way Forward and Conclusion
References
7 ESG Analysis and Shariah Screening: Mutual Learnings for a Better Investment Climate
7.1 Introduction
7.2 Socially Responsible Investment (SRI)
7.2.1 Islamic Investment
7.2.2 Shariah Screening of Equity Stocks
7.3 Data and Methods
7.3.1 Data Set
7.3.2 NIFTY100 ESG Index
7.3.3 Method
7.4 Results and Discussions
7.5 Conclusions
References
8 Sustainable Investment and Transparency Recommendations in Segmented Markets: An Application to Islamic Investment Accounts
8.1 The Problem of Trust for Climate Finance
8.1.1 Solutions for Trust Problems in the Literature
8.2 Objectives and Contribution
8.3 Design of the Analysis
8.3.1 Institutional Background of Islamic Finance and Islamic Investment Accounts
8.3.2 Development of Sustainable Investment Recommendations
8.4 Data Set and Data Cleaning
8.4.1 Data Set
8.4.2 Data Cleaning
8.4.3 Final Data Set
8.5 Empirical Results
8.5.1 Estimation of Parameters
8.5.2 Sustainable Investment Recommendations for Islamic Investment Accounts
8.5.3 Transparency Recommendations for Islamic Investment Accounts
8.5.4 Sustainable Investment Recommendations for Islamic Investment Account
8.6 Potential and Recommended Final Form of Transparency Recommendations
8.6.1 Who Should Implement the Transparency Recommendations?
8.6.2 Should the Recommendations Be Published?
8.6.3 What Exactly Should Be Published?
8.6.4 Final Recommendation
8.7 Conclusion
8.8 Appendix
References
9 Sustainability, Trust, and Blockchain Applications in Islamic Finance and Circular Economy: Best Practices and Fintech Prospects
9.1 Introduction
9.2 Blockchain in Simplistic Terms
9.2.1 A Quick Dive into Blockchain Technology
9.2.2 Smart Contracts
9.3 Understanding Trust
9.4 The Sustainable Developments Goals (SDGs)
9.5 Can Blockchain Offer Superior Solutions to Achieve the SDGs?
9.6 Blockchain and the SDGs in the Age of COVID-19
9.7 Use Cases of Blockchain-Enabled Solutions Across the SDGs
9.7.1 Sustainable Water Management
9.7.2 Sustainable Energy
9.7.3 Reducing Inequality
9.7.4 Sustainable Consumption and Production
9.7.5 Solving the Climate Crisis
9.7.6 Blue Economy
9.7.7 Green Economy
9.8 Concluding Remarks and Discussions
References
10 Financial Development and Ecological Footprint in OIC Countries: Islamic Perspectives and Empirical Evidence
10.1 Introduction
10.2 Literature Review
10.2.1 Environmental Context of Islam
10.2.2 Environmental Degradation and OIC Countries
10.2.3 Environment and Financial Development Nexus
10.3 Methodology
10.4 The Data and Descriptive Analysis
10.5 Results and Discussion
10.5.1 Sensitivity Analysis
10.6 Conclusion
References
11 A Consumer Perspective of the Circular Economy: An Empirical Investigation Through Structural Equation Modeling
11.1 Introduction
11.2 Literature Review
11.2.1 The Circular Economy
11.2.2 Marketing and the Circular Economy
11.2.3 Purchase Intention
11.2.4 Attitude
11.2.5 Subjective Norm
11.2.6 Perceived Behavioral Control
11.2.7 Convenience
11.2.8 Environmental Impact
11.3 Framework of the Study
11.4 Methodology
11.4.1 Sampling
11.4.2 Research Instrument
11.5 Data Analyses and Results
11.5.1 Respondents’ Profile
11.5.2 Attributes of the Questionnaire
11.5.3 Exploratory Factor Analysis (EFA)
11.5.4 Confirmatory Factor Analysis (CFA)
11.5.5 Hypotheses Testing
11.6 Conclusion and Direction for Future Research
References
12 A Multi-Layer Analysis and Solution for Climate Crisis: From the Restructuring of Production to Restructuring of Knowledge
12.1 Introduction
12.2 Methodology
12.3 Excavating the Advance Industrial Society
12.3.1 The Global System of Production and Consumption
12.3.2 Hunger for Profit Maximization
12.3.3 A Faulty Accounting System
12.3.4 One Dimensional Concept of Exchange
12.3.5 The Linearity of the Exchange Process
12.3.6 Division of Knowledge
12.3.7 In Retrospect
12.3.8 The Axiomatic Foundations of the Modern System of Production and Consumption
12.4 The Alternative
12.4.1 An Alternative Structure of Knowledge
12.4.2 The Circularity of Exchange in Islam’s Paradigm
12.4.3 Multidimensionality of the Concept of Exchange
12.4.4 A Dual Accounting System
12.4.5 The Urge to Maximize Rewards on the Day of Judgment
12.4.6 The Design of the System of Production and Consumption
12.5 Conclusion
References
Part III Circular Economy Innovations—Case Studies
13 Zero Waste Cities in the Developing World: A Comparative Study
13.1 Introduction: Circular Economy and Zero Waste
13.2 The Fundamentals of Zero Waste Cities
13.3 The Evolution of Zero Waste Cities
13.4 Zero Waste Case Studies in Sub-Saharan Africa
13.5 Zero Waste in the Middle East
13.6 Lessons from Africa and the Middle East: The Zero Waste Cities Model
13.7 Challenges and Opportunities in Africa and the Middle East
13.7.1 Challenges
13.7.2 Opportunities
13.8 Future Trends
13.9 Recommendations
13.10 Conclusion
References
14 Solving the Problem of Water, Sanitation, and Hygiene in Nigeria Using Blended Finance
14.1 Introduction
14.2 Background Literature
14.2.1 Water and Sanitation in Nigeria
14.2.2 Financing Water and Sanitation in Nigeria
14.3 Islamic Finance in Nigeria
14.3.1 The Nigerian Sukuk Market: An Overview
14.4 Summary of the Identified Problem
14.4.1 Solution/Value Proposition
14.5 Definitions and Concepts of Blended Finance
14.5.1 Blended Finance for Water and Sanitation
14.5.2 Conventional Blended Finance Instruments
14.6 Islamic Blended Finance
14.6.1 Proposed Structure
14.7 Legal and Regulatory Policy Recommendations
14.8 Conclusion
References
15 The Role of Islamic Finance in Fostering Circular Business Investments in the Case of Qatar’s Tire Industry
15.1 Introduction
15.2 Literature Review on Circular Economy
15.3 The Role of Islamic Finance in the Transition Toward Circular Economy
15.3.1 Green Sukuk
15.3.2 Blended Islamic Finance
15.4 The Case of the Tire Industry in Qatar
15.4.1 Evaluating the Problem to Find a Solution
15.4.2 Evaluating the Life Cycle of Rubber Tire
15.4.3 Analysis of Viable Solutions for Tire Accumulation Problem
15.4.4 Recommendations for the Government of Qatar
15.5 Aligning Islamic Finance Practice to Support Circular Economic Growth in Qatar
15.6 Conclusion
References
16 Electronic and Electrical Waste Management: Malaysia and Sweden Experiences
16.1 Introduction
16.1.1 E-Waste Definition
16.1.2 E-Waste Problem
16.1.3 E-Waste Management Opportunities
16.1.4 Zero E-Waste Circular Economy
16.1.5 E-Waste and SDGs
16.1.6 Basel Convention
16.2 Malaysia E-Waste Management Experience
16.2.1 The E-waste Situation in Malaysia
16.2.2 Government's Initiatives
16.3 Sweden E-Waste Management Experience
16.3.1 Report Produced EEE
16.3.2 Report Collected and Treated WEEE
16.4 E-Waste and Sustainable Development Goals (SDGs)
16.4.1 Malaysia and Sweden Implementation of SDGs
16.5 Conclusion
References