Sustainable Investment and Transparency Recommendations in Segmented Markets : An Application to Islamic Investment Accounts

Sustainable investment projects, such as those envisioned within the United Nations’s Sustainable Development Goals, are impossible without sustainable financing, which in turn can only be secured if investors have long-term trust in these projects. Trust problems are severe for private investors, in particular in Islamic financial systems where intransparent Islamic investment accounts are responsible for 63% of the funding of Islamic banks. In this chapter, we develop sustainable investment recommendations to facilitate long-term trust in investments and apply these sustainable investment recommendations to 72 Islamic investment accounts across 13 countries. Moreover, we propose simple five-star rating transparency recommendations based on these sustainable investment recommendations