Role of Qawā’id Fiqhiyyah in Promoting Green Investment within Islamic Economics: Theoretical and Practical Frameworks

Abstract

The current study aimed to evaluate the contribution of Qawā’id Fiqhiyyah (Islamic Legal Maxims) in developing facts and theoretical arguments for green investment practices. The background of this study was based on the principles of Islamic economics that aim to balance economic activities and environment. Furthermore, the study attempted to enrich the conventional Islamic law and modern sustainable finance practices. The new developments in this area are analyzed using a systematic literature review of the existing green financing models in Islamic finance, their limitations, and prospects to apply Qawā’id Fiqhiyyah. A case assessment was also adopted where qualitative content analysis was employed to explore how Qawā’id Fiqhiyyah informs green investment in Islamic finance. Legal texts of Islam and modern literature were used to draw examples on concepts, such as Lā Ḍarar wa lā Ḍirār (no harm) and Maṣlaḥah (Public interest), where content was coded into variables, for instance harm reduction and sustainability. To operationalize these results, case studies of Islamic banks that have adopted environmentally friendly measures, such as the issuance of Green Sukuk Bonds, were discussed. Reviewing texts, literature, and case studies involves triangulation, which avoids bias, while thematic analysis identifies key principles that embed Islamic teachings in sustainable investment. The findings regarding Islamic finance explained above illustrate that these principles enhance the ethical basis of green investors and enable them to implement green investments practically. The data was also supported by examples of the implementation of these principles by Islamic financial institutions and their effective use in financing environmentally friendly investments.