How are Shariah-compliant investments different from conventional investments?

Shariah-compliant investments differ from conventional investments in that they are based on the teachings of the Quran and the precedents derived from the life of Prophet Muhammad (peace be upon him). These investments direct funds toward responsible activities that benefit society, adhering to ethical, environmental, and social considerations. Conventional finance, on the other hand, primarily focuses on profit maximization and may not emphasize these ethical and societal concerns. While ESG (Environmental, Social, and Governance), impact investing, and responsible finance share some similarities in their objectives with Shariah-compliant investments, the latter are distinct in their foundation on Islamic principles and values.

Last Update: 22 July 2024