Boundary Objects: Sustaining Impact of Green Sukuk Life Cycle to Address Climate Change Issues
Raeni, Ian Thomson, Andreas Sundström
University of Birmingham
Abstract
This research explores the development and accountability of green financial instruments for addressing climate change in order to improve our understanding of potential behavioural changes by key institutions. This financial initiative is known as green sukuk, which is a hybrid of conventional government bonds, Islamic finance principles and climate change concern, issued by Indonesian government. In particular, we explore how the flow of funds, from the capital markets to the Indonesian state budget, is tracked and its impact measured. By understanding the behavioural changes, this study proposes to contribute to the debate on sustaining impact in addressing climate change issues. Furthermore, it fills gaps within negotiated boundaries of this hypothecated finance by internalising Islamic principles and green framework. This research obtained data across the life cycle of green sukuk from both state and non-state actors. Drawing upon a theoretical framework on boundary objects, it enables to develop a design of ‘common- goal within a mixture of respective capabilities, through calculative boundaries, to understand potential changes of institutional behaviour in sustaining its impact. This study provides implication to state and non-state actors who articulate green sukuk to develop scopes of externalities in maintaining a sustainable transition of climate finance.
Keywords: green sukuk, impact investing, climate changes, boundary objects
Topic: Sustainable Development in Islamic Perspective