REPUBLIKA.CO.ID, JAKARTA -- Reducing carbon emissions requires contributions from various sectors. One of them is by issuing green sukuk. Based on a Moody's Ratings report, today investor interest in green sukuk is rising as one global decarbonization effort.

Although not yet dominant in the sharia financial market, green sukuk have begun to be in demand in the Middle East and Southeast Asia region. Through the first half of 2024, global green sukuk issuance increased 21 percent year-on-year (yoy) to 6.8 billion U.S. dollars or about Rp 102.98 trillion.

This figure outstrips the 8 per cent decline in conventional sustainable bond issuance. Sustainable sukuk account for only 5.4 per cent of total sukuk issuance compared to conventional continuing bonds which account for 12 per cent of overall bond issuance.

“Green sukuk issuance increased from a low point. We expect issuance in 2024 to surpass the 10.6 billion US dollars (Rp 160.53 trillion) recorded in 2023, driven by an increasingly strong push towards decarbonization, expansion of policy efforts, and strong investor demand,” said Assistant Vice President and Analyst at Moody's Abdulla AlHammadi, quoted from Zawya, Friday (27/9/2024).