Green Finance and Islamic Finance

Abstract

This study examines Islamic finance and green finance. Islamic finance is a system based on Sharia law that prohibits interest, uncertainty, and investment in unlawful sectors defined by Islam. Green finance is the financing investments that promote renewable energy, sustainable developments, and environmental products or policies. This paper shows that although Islamic finance and green finance have been showing an increasing trend in the world in the last two decades, these trends are observed in different regions and countries. The portion of the Murabahah among the Islamic financial products is very high compared the other Islamic financial instruments. This phenomenon can be an explanation why Islamic finance and green finance have showed an increasing trend in different regions and countries.