Integration of ESG (Environmental, Social, and Governance) Principles into the Maqashid al-Shariah Framework
DOI:
https://doi.org/10.59525/jess.2172Keywords:
ESG, Maqashid al-Shariah, Sharia Finance, SustainabilityAbstract
The integration of Environmental, Social, and Governance (ESG) principles into Islamic finance faces challenges in the form of a gap between formal compliance with sustainability standards and the substantive application of the values of Maqashid al-Shariah. The use of ESG indicators that do not fully take Islamic legal principles into account also risks overlooking the dimensions of tawhid, maslahah, and social justice. This study aims to analyze the harmonization of ESG principles with Maqashid al-Shariah and to formulate an integrated and measurable taxonomy of sustainability indicators. The study employs a qualitative method through a literature review using juridical-normative and philosophical-conceptual approaches. Data were obtained from ESG regulations, AAOIFI and GRI standards, journal articles, and Islamic finance literature, and were then analyzed using content analysis and conceptual mapping. The results produced the Maqashid-ESG Matrix framework, which maps environmental, social, and governance aspects into the five pillars of Shariah protection and the hierarchy of dharuriyyat, hajiyyat, and tahsiniyyat. This framework offers a more comprehensive, transparent, and public-interest-oriented basis for ethical investment assessment. The study recommends that the OJK and IFSB develop a Sharia green taxonomy, while Sharia financial institutions need to apply this matrix in investment screening, risk management, and sustainability audits.
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