This study employs bibliometrics and a systematic literature review to comprehensively analyze Sukuk and Green Sukuk research trends from 2011 to 2023. Key terms such as “Islamic finance,” “Sukuk,” and “green bonds” are identified through bibliometric analysis, revealing their central role. The systematic literature review uncovers dominant themes, notable authors, and publication trends. Findings indicate a transformative potential in fostering financial inclusion and sustainability. The study underscores the importance of international collaboration, highlights key contributors like Malaysia and Indonesia, and provides insights for practitioners and policymakers. Despite positive trends, research gaps necessitate further exploration for a nuanced understanding of Sukuk's impact on sustainability goals.
TopIntroduction
It is essential to understand that the use of Sukuk as a substitute funding vehicle has shown to be a practical success in several Muslim nations rather than just a theoretical idea. Several studies show that a large proportion of Muslim countries struggle with external debt to obtain funds for infrastructure development. Even though these countries urgently require large-scale development programs their limited resources make it difficult for them to find local funding. As a result, many governments turn to other nations or international financial organizations for financial support. This traditional method poses several difficulties for the country borrowing the money, such as the vulnerability to changes in the value of the home currency when the loan is in foreign currency. An increase in economic leverage and volatility is a result of external borrowing (Trabelsi, Umar, Dogah, & Vo, 2024). The vulnerability to changes in the price of commodities because of the country's heavy reliance on commodity exports. The advent of Islamic bonds sometimes referred to as Sukuk, is a novel development that has the potential to mitigate the drawbacks of borrowing from outside sources, lower economic leverage, and improve resilience to risk factors (A. Hasan, Gupta, Irfan, & Dias, 2024).
Sukuk can serve as a conduit for foreign investment, fostering the expansion and improvement of the regional economy. These investments can support a range of initiatives and projects that advance economic stability, infrastructure development, and general advancement (Surachman, Hermawan, Handayani, & Astuti, 2023). Sukuk's appeal to investors worldwide makes them a desirable option, encouraging cooperation and support for the development of the issuing nation. It's similar to welcome friends from other countries that support and believe in the constructive advancement of the country. To finance its development infrastructure, the Malaysian government issued the first sovereign sukuk (Uluyol, 2023).
The Islamic finance sector's primary goal is to achieve long-term gains and consistently engage in initiatives that advance the interests of the public. The Islamic finance, which prioritizes sustainability and the environment is expected to be one of the societal solutions to the pollution and harm to the environment (Musari & Hidayat, 2023). Regarding poor nations, the SDGs aim to lower poverty rates while enhancing the standard of living in terms of health, education, sanitation, availability of drinking water and preservation of marine and forest ecosystems. Countries all across the world had already concluded that financing was essential for the successful implementation of sustainable development before the SDGs were created the global development, encompassing both wealthy and developing nations (Brahmana & You, 2022).
Therefore, the Green finance like green sukuk is getting a lot of attention in the recent literature as a result of the increased global action on climate change. Investment products made with green sukuk still have a lot of room for improvement and require assessment (A. Rahman, Ahmad, Bin-Nashwan, Muneeza, Abdul Halim, & Markom, 2023). This study addresses the question of how much can be learned about green sukuk in terms of development patterns in the number of publications, development opportunities, and evaluation given the significance and enormous potential of the concept. This study's main goal is to shed light on the historical development, contemporary trends, and potential future applications of Sukuk and Green Sukuk in the context of Islamic finance and sustainable investing (Faisal, Gunawan, Cupian, Hayati, Apriliadi, & Fajri, 2023).