Islamic Finance Can Drive Sustainable Investment

The principles of Islamic finance could provide a stronger framework for sustainable investment as the world seeks massive amounts of capital to address climate change, said Sultan of Perak Sultan Nazrin Muizzuddin Shah.

Speaking at the 17th Securities Commission-OCIS Roundtable in the United Kingdom, he said public funds alone would not be enough to finance the transition towards a more resilient and sustainable future. 

Islamic Finance Offers Model for Responsible Capital

Sultan Nazrin said Islamic finance’s emphasis on linking finance to the real economy, productive activities, risk-sharing and avoidance of harmful practices makes it well suited to sustainable investment.

He called for greater use of sukuk structures, waqf-based mechanisms, as well as green and blue financing instruments. 

He also urged the financial industry to innovate and price climate risks more honestly, arguing that responsible finance should go beyond short-term commercial returns.

Sustainable investment, he said, can help fund technologies involving clean energy, efficient agriculture, water management and resilient construction. He noted that renewable sources including wind and solar overtook coal as the world’s leading source of electricity in 2025, describing the shift as an encouraging sign.