Islamic Finance and Circular Economy: Connecting Impact and Value Creation

Preface
Contents
Contributors
1 Islamic Finance and Circular Economy: An Introduction
	1.1 Book Outline
	1.2 Future Directions: Key Takeaways
	1.3 Proactive Efforts Using Technology, Regulations, and Increase of Awareness Required
	1.4 Recommendations
Part I Islamic Perspective on Circular Economy and Sustainability
2 Islamic Perspective on Circular Economy
	2.1 Introduction
	2.2 Literature Review
	2.3 Circular Economy
		2.3.1 History of CE
		2.3.2 Advantages of CE
		2.3.3 CE Business Models
	2.4 The Idea of Circularity from Islamic Perspective
	2.5 Promoting CE Models from Islamic Perspective
	2.6 Conclusion: Key Shariah Takeaways for CE Models
	References
3 Environmental Protection and Sustainable Development: An Islamic Perspective
	3.1 Introduction
		3.1.1 The High Objectives of the Shariah
	3.2 Preservation of the Environment is Complementary to the Five Essential Values
		3.2.1 Preservation of the Environment as a Shariah Objective
		3.2.2 Ranks of Maqasid
		3.2.3 Nature of the Shariah Provisions Relating to the Environment
	3.3 The Precedent of Shariah in Sustainable Development
		3.3.1 Waqf (Endowment) System:
		3.3.2 Ihya’ Al-Mawat (Land Revival and Reclamation)
		3.3.3 Validation of Productive Contracts, Such as Mugharasa (Planting Trees), Muzara’ah (Sharecropping), and Musaqat (Irrigation of Planted Trees).
		3.3.4 Tolerating Uncertainty (Gharar) in Productive Contracts
	3.4 Maqasid Maxims Relating to the Preservation of the Environment
	3.5 Conclusion
	References
Part II Convergence of Islamic Finance and Circular Economy
4 Circular Economy Financing: An Islamic Finance Perspective
	4.1 Introduction
	4.2 Financing Circular Economy
	4.3 Islamic Finance and Circular Economy
	4.4 Way Forward
	References
5 Circular Economy, Green Economy, and Sustainable Development: Establishing the Interconnections and Discoursing the Role of Islamic Finance
	5.1 Introduction
	5.2 Sustainable Development
	5.3 Green Economy
	5.4 Circular Economy
	5.5 Interconnections between Circular Economy, Green Economy, and Sustainability
	5.6 The Role of Islamic Finance in Operationalizing Circular Economic, Green Economic, and Sustainability Models
		5.6.1 Financial Sector Stability and Resilience
		5.6.2 Inclusive Finance
		5.6.3 Reducing Vulnerability of the Poor and Mitigating Risk
		5.6.4 Contribution to Environmental and Social Issues
		5.6.5 Islamic Finance and Circular Economy
		5.6.6 Musharkah Cum Ijarah Model
	5.7 Concluding Remarks and the Way Forward
	References
6 The Circular Economy and Its Possible Collaboration with Islamic Economics and Finance
	6.1 Introduction
	6.2 Limitations of Circular Economy
	6.3 Interdependent Utility Function and Social Finance
		6.3.1 Interdependent Utility Function
		6.3.2 Social Finance
	6.4 Current Performance and the Need for New Directions
		6.4.1 The Evolution of Islamic Banking and Finance (IBF):
		6.4.2 Moving Beyond Profit: The Value-Based Intermediation (VBI) Agenda
		6.4.3 Application of Circular Economy in the Environmental Policy: Lessons Learnt from Malaysia’s Waste Management
	6.5 Circular Economy and Social Finance Discourse (CESF): Opportunity for a New Decision-Making Model
	6.6 The Way Forward and Conclusion
	References
7 ESG Analysis and Shariah Screening: Mutual Learnings for a Better Investment Climate
	7.1 Introduction
	7.2 Socially Responsible Investment (SRI)
		7.2.1 Islamic Investment
		7.2.2 Shariah Screening of Equity Stocks
	7.3 Data and Methods
		7.3.1 Data Set
		7.3.2 NIFTY100 ESG Index
		7.3.3 Method
	7.4 Results and Discussions
	7.5 Conclusions
	References
8 Sustainable Investment and Transparency Recommendations in Segmented Markets: An Application to Islamic Investment Accounts
	8.1 The Problem of Trust for Climate Finance
		8.1.1 Solutions for Trust Problems in the Literature
	8.2 Objectives and Contribution
	8.3 Design of the Analysis
		8.3.1 Institutional Background of Islamic Finance and Islamic Investment Accounts
		8.3.2 Development of Sustainable Investment Recommendations
	8.4 Data Set and Data Cleaning
		8.4.1 Data Set
		8.4.2 Data Cleaning
		8.4.3 Final Data Set
	8.5 Empirical Results
		8.5.1 Estimation of Parameters
		8.5.2 Sustainable Investment Recommendations for Islamic Investment Accounts
		8.5.3 Transparency Recommendations for Islamic Investment Accounts
		8.5.4 Sustainable Investment Recommendations for Islamic Investment Account
	8.6 Potential and Recommended Final Form of Transparency Recommendations
		8.6.1 Who Should Implement the Transparency Recommendations?
		8.6.2 Should the Recommendations Be Published?
		8.6.3 What Exactly Should Be Published?
		8.6.4 Final Recommendation
	8.7 Conclusion
	8.8 Appendix
	References
9 Sustainability, Trust, and Blockchain Applications in Islamic Finance and Circular Economy: Best Practices and Fintech Prospects
	9.1 Introduction
	9.2 Blockchain in Simplistic Terms
		9.2.1 A Quick Dive into Blockchain Technology
		9.2.2 Smart Contracts
	9.3 Understanding Trust
	9.4 The Sustainable Developments Goals (SDGs)
	9.5 Can Blockchain Offer Superior Solutions to Achieve the SDGs?
	9.6 Blockchain and the SDGs in the Age of COVID-19
	9.7 Use Cases of Blockchain-Enabled Solutions Across the SDGs
		9.7.1 Sustainable Water Management
		9.7.2 Sustainable Energy
		9.7.3 Reducing Inequality
		9.7.4 Sustainable Consumption and Production
		9.7.5 Solving the Climate Crisis
		9.7.6 Blue Economy
		9.7.7 Green Economy
	9.8 Concluding Remarks and Discussions
	References
10 Financial Development and Ecological Footprint in OIC Countries: Islamic Perspectives and Empirical Evidence
	10.1 Introduction
	10.2 Literature Review
		10.2.1 Environmental Context of Islam
		10.2.2 Environmental Degradation and OIC Countries
		10.2.3 Environment and Financial Development Nexus
	10.3 Methodology
	10.4 The Data and Descriptive Analysis
	10.5 Results and Discussion
		10.5.1 Sensitivity Analysis
	10.6 Conclusion
	References
11 A Consumer Perspective of the Circular Economy: An Empirical Investigation Through Structural Equation Modeling
	11.1 Introduction
	11.2 Literature Review
		11.2.1 The Circular Economy
		11.2.2 Marketing and the Circular Economy
		11.2.3 Purchase Intention
		11.2.4 Attitude
		11.2.5 Subjective Norm
		11.2.6 Perceived Behavioral Control
		11.2.7 Convenience
		11.2.8 Environmental Impact
	11.3 Framework of the Study
	11.4 Methodology
		11.4.1 Sampling
		11.4.2 Research Instrument
	11.5 Data Analyses and Results
		11.5.1 Respondents’ Profile
		11.5.2 Attributes of the Questionnaire
		11.5.3 Exploratory Factor Analysis (EFA)
		11.5.4 Confirmatory Factor Analysis (CFA)
		11.5.5 Hypotheses Testing
	11.6 Conclusion and Direction for Future Research
	References
12 A Multi-Layer Analysis and Solution for Climate Crisis: From the Restructuring of Production to Restructuring of Knowledge
	12.1 Introduction
	12.2 Methodology
	12.3 Excavating the Advance Industrial Society
		12.3.1 The Global System of Production and Consumption
		12.3.2 Hunger for Profit Maximization
		12.3.3 A Faulty Accounting System
		12.3.4 One Dimensional Concept of Exchange
		12.3.5 The Linearity of the Exchange Process
		12.3.6 Division of Knowledge
		12.3.7 In Retrospect
		12.3.8 The Axiomatic Foundations of the Modern System of Production and Consumption
	12.4 The Alternative
		12.4.1 An Alternative Structure of Knowledge
		12.4.2 The Circularity of Exchange in Islam’s Paradigm
		12.4.3 Multidimensionality of the Concept of Exchange
		12.4.4 A Dual Accounting System
		12.4.5 The Urge to Maximize Rewards on the Day of Judgment
		12.4.6 The Design of the System of Production and Consumption
	12.5 Conclusion
	References
Part III Circular Economy Innovations—Case Studies
13 Zero Waste Cities in the Developing World: A Comparative Study
	13.1 Introduction: Circular Economy and Zero Waste
	13.2 The Fundamentals of Zero Waste Cities
	13.3 The Evolution of Zero Waste Cities
	13.4 Zero Waste Case Studies in Sub-Saharan Africa
	13.5 Zero Waste in the Middle East
	13.6 Lessons from Africa and the Middle East: The Zero Waste Cities Model
	13.7 Challenges and Opportunities in Africa and the Middle East
		13.7.1 Challenges
		13.7.2 Opportunities
	13.8 Future Trends
	13.9 Recommendations
	13.10 Conclusion
	References
14 Solving the Problem of Water, Sanitation, and Hygiene in Nigeria Using Blended Finance
	14.1 Introduction
	14.2 Background Literature
		14.2.1 Water and Sanitation in Nigeria
		14.2.2 Financing Water and Sanitation in Nigeria
	14.3 Islamic Finance in Nigeria
		14.3.1 The Nigerian Sukuk Market: An Overview
	14.4 Summary of the Identified Problem
		14.4.1 Solution/Value Proposition
	14.5 Definitions and Concepts of Blended Finance
		14.5.1 Blended Finance for Water and Sanitation
		14.5.2 Conventional Blended Finance Instruments
	14.6 Islamic Blended Finance
		14.6.1 Proposed Structure
	14.7 Legal and Regulatory Policy Recommendations
	14.8 Conclusion
	References
15 The Role of Islamic Finance in Fostering Circular Business Investments in the Case of Qatar’s Tire Industry
	15.1 Introduction
	15.2 Literature Review on Circular Economy
	15.3 The Role of Islamic Finance in the Transition Toward Circular Economy
		15.3.1 Green Sukuk
		15.3.2 Blended Islamic Finance
	15.4 The Case of the Tire Industry in Qatar
		15.4.1 Evaluating the Problem to Find a Solution
		15.4.2 Evaluating the Life Cycle of Rubber Tire
		15.4.3 Analysis of Viable Solutions for Tire Accumulation Problem
		15.4.4 Recommendations for the Government of Qatar
	15.5 Aligning Islamic Finance Practice to Support Circular Economic Growth in Qatar
	15.6 Conclusion
	References
16 Electronic and Electrical Waste Management: Malaysia and Sweden Experiences
	16.1 Introduction
		16.1.1 E-Waste Definition
		16.1.2 E-Waste Problem
		16.1.3 E-Waste Management Opportunities
		16.1.4 Zero E-Waste Circular Economy
		16.1.5 E-Waste and SDGs
		16.1.6 Basel Convention
	16.2 Malaysia E-Waste Management Experience
		16.2.1 The E-waste Situation in Malaysia
		16.2.2 Government\'s Initiatives
	16.3 Sweden E-Waste Management Experience
		16.3.1 Report Produced EEE
		16.3.2 Report Collected and Treated WEEE
	16.4 E-Waste and Sustainable Development Goals (SDGs)
		16.4.1 Malaysia and Sweden Implementation of SDGs
	16.5 Conclusion
	References