Role of Islamic sustainable finance in promoting green entrepreneurship and sustainable development goals in emerging Muslim economies

Abstract

Purpose The increasing attention of policymakers, governments and Islamic financial institutions towards green entrepreneurship and sustainable development has led to a comprehensive need to carefully examine current green and sustainable finance practices. This study examines the role of Islamic sustainable finance in promoting green entrepreneurship and achieving sustainable development goals in Emerging Muslim Economies. Design/methodology/approach This qualitative study conducted a critical literature review (CLR) at three levels, encompassing conceptual, theoretical and empirical reviews. By critically reviewing over 64 academic journals indexed in the Google Scholar and SCOPUS database for the period 2010–2024, the study provides comprehensive insights into the role of ISF in promoting GE and achieving SDGs in Emerging Muslim Economies. Findings The study highlights ISF’s role in promoting green entrepreneurship by investing in sustainable projects, supporting SMEs and offering alternative financing. ISF fosters sustainable development by advancing financial stability, equity and growth, aligned with Maqasid al-Shari’ah. Key mechanisms include Islamic Green Sukuk, Socially Responsible Investment Funds, Islamic Microfinance and Islamic Impact Investing. The findings emphasize integrating Islamic ethics with finance to drive inclusive, sustainable development. Practical implications The findings are crucial for policymakers, Islamic financial institutions, scholars, environmentalists and investors to understand the potential of Islamic Social Finance (ISF) to advance the Green Economy (GE) through investments in sustainable projects and support for environmentally conscious entrepreneurs. Originality/value The study offers robust contributions to the existing literature in terms of comprehensively providing insights on how to leverage ISF effectively in advancing GE and SDGs in Emerging Muslim Economies. Peer review The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2024-0408