Measuring Contemporary Islamic Banking Sustainability
Integrating ESG and Maqashid al-Syar ī ‘ ah in Indonesia
Bibliographic Data
| ID | 22361637 |
|---|---|
| Authors | Edian Fahmy Edian Fahmy (UIN Syarif Hidayatullah Jakarta, Indonesia), Edian Fahmy (Syarif Hidayatullah State Islamic University Jakarta), Muhamad Nadratuzzaman Hosen (0000-0001-5958-8564, Syarif Hidayatullah State Islamic University Jakarta), Titi Dewi Warninda (Syarif Hidayatullah State Islamic University Jakarta), Ali Rama (0000-0002-6335-1890, Syarif Hidayatullah State Islamic University Jakarta), Qeis Aimar (Al-Azhar University) |
| Year | 2026 |
| Volume | 5 |
| Issue | 1 |
| Pages | 351-378 |
| Publication date | 2026-04-12 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | MILRev : Metro Islamic Law Review (JOURNAL) |
| Journal identifiers | ISSN: 2986-528X • E-ISSN: 2986-528X |
| Publisher | Universitas Islam Negeri Jurai Siwo Lampung (PUBLISHER) |
| DOI | 10.32332/milrev.v5i1.12880 |
| OpenAlex | W7153866921 |
| Language | EN |
| References cited | 27 |
The measurement of sustainability in Islamic banking in Indonesia remains largely dominated by conventional Environmental, Social, and Governance (ESG) frameworks, which tend to emphasize formal compliance and value-neutral indicators. Such approaches have not fully captured the ethical and normative dimensions embedded in Islamic finance. This study aims to formulate a comprehensive model for measuring the sustainability of contemporary Islamic banking by integrating ESG principles with Islamic value-based sustainability indices, namely the Islamic Corporate Sustainability Practices Index (ICSPI), Islamic Banking Sustainability Performance Index (IBSPI), and Maqāṣid Sharī‘ah Index (MSI). This research employs a mixed-methods approach. The Analytic Network Process (ANP) is utilized to identify and prioritize the most relevant sharia-based sustainability index based on stakeholder perspectives. Furthermore, Structural Equation Modeling–Partial Least Squares (SEM-PLS) is applied to examine the impact of ESG integration and Sharia sustainability models on the financial performance of Islamic banks, as proxied by Return on Assets (ROA) and Return on Equity (ROE). The findings reveal that integrating ESG with a maqāṣid al-sharī‘ah-based sustainability index provides a more holistic and substantive framework for assessing sustainability in Islamic banking. This integrated model not only enhances measurement accuracy but also aligns financial performance with ethical and social objectives rooted in Islamic principles. This study contributes to the advancement of contemporary Islamic economic law by offering a conceptual framework that bridges conventional sustainability metrics with Islamic normative values. Additionally, it provides practical implications for policymakers and industry practitioners in developing more robust, value-oriented sustainability standards within the Islamic banking sector
Corporate governance · Corporate social responsibility · Environmental Sustainability Index · Islam · Islamic banking · Normative · Sharia · Sustainability · Sustainability reporting · Corporate Social Responsibility Reporting · Islamic Finance and Banking Studies · Sustainable Finance and Green Bonds
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The Contestation of Legal Foundations in the Resolution of Islamic Economic Disputes in Religious Courts
The Implications of the Countercyclical Covid-19 Policy on the Performance of Rural Banks and Sharia Rural Banks in Indonesia
| Highly cited | No |
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