Islamabad, 22 Apr. 2025: In a landmark move for ethical finance, the Al Baraka Forum for Islamic Economy and U.S.-based sustainability firm Spectreco LLC have joined forces to create the world’s first Shariah-compliant ESG Index.
The announcement was made during the 45th Al Baraka Islamic Economics Symposium, held in Madinah, and attended by key dignitaries including Prince Faisal bin Salman Al Saud and Sheikh Abdullah Saleh Kamel, Chairman of the Al Baraka Forum’s Board of Trustees.
This pioneering index is designed to bridge Islamic financial ethics with global sustainability standards, marking a new chapter in responsible investment.
It integrates the Islamic principles of Maqasid al-Shariah which emphasize welfare, justice, and accountability with international Environmental, Social, and Governance (ESG) benchmarks.
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The initiative, according to officials, aims to reshape how Islamic finance aligns with sustainability goals.
The Shariah-compliant ESG Index will incorporate traditional Islamic screening processes, such as excluding specific sectors and applying financial ratio filters, with advanced ESG analysis powered by artificial intelligence through Spectreco’s proprietary technology.
Al Baraka Forum’s Secretary-General, Sheikh Yousef Hassan Khalawi, noted that Islamic finance has long upheld transparency and ethical stewardship.
He highlighted that Maqasid al-Shariah provides a thorough and adaptable foundation for sustainable development, emphasizing that this collaboration reinforces their commitment to value-driven financial systems.
Faraz Khan MBE, CEO of Spectreco, echoed this sentiment. He explained that their platform combines AI-driven ESG data intelligence with Islamic values, aiming to simplify ESG compliance for institutions operating in Islamic finance.
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He described the project as a fusion of faith, innovation, and environmental responsibility.
The index is expected to launch initially in the Gulf Cooperation Council (GCC) states, as well as key European and Southeast Asian markets.
It aims to serve investors, regulators, and Islamic financial institutions looking to harmonize faith-based investing with global sustainability goals.
Through real-time updates, robust monitoring tools, and transparent data reporting, the Shariah-compliant ESG Index is set to become a cornerstone in the future of sustainable and ethical finance, offering a values-aligned alternative in an evolving global market.
