An Ideal Fit For ESG And Shari'a Compliant Investment

• Published date: 02 February 2023
• Subject Matter: Finance and Banking, Wealth Management, Financial Services, Wealth & Asset Management
• Law Firm: Jersey Finance Limited
• Author: An Kelles and Faizal Bhana

ESG assets are forecast to exceed US$100 trillion by 2028' and US$150 US trillion by 2034, with one in every three US Dollars currently invested already taking account of ESG factors'.

The Gulf wealth management community has clearly embraced this trend towards sustainable investment, conscious that it resonates with the next generation in particular.

This shift in focus was highlighted recently in the 'Global Attitudes to Wealth Management' study, prepared by Gateway Global in partnership with Jersey Finance - a not-for-profit organisation that represents and promotes Jersey's 60-year-old international finance centre (IFC). As the first IFC to set up an office in the Dubai IFC, in 2018, Jersey has a unique perspective on Islamic wealth management.

The report analysed a cross-section of responses from 2,000 Muslim customers in a number of key markets - London, Kuala Lumpur, the GCC, and South Africa - and found that the soaring demand for ESG principles in mainstream investments is also driving demand for Shari'a-compliant wealth management solutions.

Notably, more than half of the respondents to the study said that they would opt for a Shari'a compliant investment solution even if the performance was inferior to an equivalent conventional investment option. In contrast, 48% would choose an ethical only product under similar circumstances, suggesting a strong preference for...