Studies of Environment, Social And Governance Disclosure by Islamic Financial Institutions (IFIS) in Connection with Maqasid Al-Syariah

Over the last three decades, the Islamic finance industry has grown at an exponential rate, with current market sizes ranging from USD1.66 trillion to USD2.1 trillion. It is predicted to grow to furthermore than USD4 trillion by the end of 2025 (Islamic Commercial Law Report 2018). This rapid progress should be accompanied by IFIs' financial and non-financial disclosure to shareholders, existing and potential investors, and capital providers of the institution's economic resources, claims on those resources, and any transactions or events that may affect them. Disclosure is one method of disseminating information to investors in order to be transparent, which can aid them in making better investment decisions. This study investigates the significance of Islamic Financial Institutions' (IFIs') Environment, Social, and Governance (ESG) disclosure and its relevance in the eyes of Maqasid al-Syariah. It is maintained that, while the environment, social, and governance components of business highlighted in ESG disclosure are within the scope of Islamic law, they are not prioritised by IFIs. This is demonstrated by IFIs' weak ESG disclosure, as well as a lack of awareness and voluntariness in the topic. As a result, this article demonstrates the good motivations and effects of ESG disclosure for IFIs.