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Ecologies of green finance: Green sukuk and development of green Islamic finance in Malaysia

Liu, Felicia HM; Lai, Karen PY

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Felicia HM Liu


In this paper, we analyse the recent development of green sukuk (often referred to as an Islamic green bond) since its issuance in Malaysia in 2017, and critically evaluate whether it addresses some of the existing contradictions of green finance. Using a financial ecologies approach, we examine Malaysia's configuration of green sukuk as drawing from the existing international green bond regime, partnership with the World Bank, and Malaysia's own experience and expertise in Islamic finance, with the objective of building Kuala Lumpur's competitiveness as a global Islamic financial centre. Through documents analysis and interviews with key market actors in Kuala Lumpur and other financial centres, our findings point to the emergent international adoption of green sukuk. While this achieves Malaysia's state-building objectives, specifically through expanding Malaysia's sukuk market and advancing its status as a frontier of Islamic financial innovations, the potential for improving the current green bond regime has been more doubtful. A key limitation is the incorporation of existing Green Bond Principles, which enables not only green sukuk's international acceptance but also renders it susceptible to greenwashing. By examining the intersection of different ecologies of green and Islamic finance, we reveal the contradictions and limitations of green sukuk in contributing to Malaysian state-building and climate action.


Liu, F. H., & Lai, K. P. (2021). Ecologies of green finance: Green sukuk and development of green Islamic finance in Malaysia. Environment and Planning A, 53(8), 1896-1914.

Journal Article Type Article
Acceptance Date Jul 20, 2021
Online Publication Date Aug 19, 2021
Publication Date Nov 1, 2021
Deposit Date Sep 9, 2021
Publicly Available Date Sep 9, 2021
Journal Environment and Planning A: Economy and Space
Print ISSN 0308-518X
Electronic ISSN 1472-3409
Publisher SAGE Publications
Peer Reviewed Peer Reviewed
Volume 53
Issue 8
Pages 1896-1914


Published Journal Article (812 Kb)

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Copyright Statement
This article is distributed under the terms of the Creative Commons Attribution 4.0 License ( which permits any use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page (

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