Caring side of Islamic finance

In November last year, the International Finance Facility for Immunisation (IFFIm) issued a US$500 million sukuk using the funds to buy vaccines. As an added bonus, the sukuk pays, in quarterly coupons, a Sharia-compliant profit rate equivalent to the US 3-month London Interbank Offered Rate plus 0.5 per cent. IFFIm’s sukuk indicates a growing similarity between two heretofore disparate areas of asset management: Islamic finance, and the largely western socially responsible investment (SRI) tradition. Islamic finance-SRI crossover products will appear if investor demand requires it, although the level of cross over suggests there may not be a need for separate Shariah-compliant SRI products.