Part 1 of 6: A Climate of Change 
Unsubscribe Web Version
Please enable images to view this content
Email RSS Feed LinkedIn YouTube
Please enable images to view this content

Four Initiatives Islamic Finance Must Undertake to Keep Itself Relevant in Changing Times

An invasion of armies can be resisted, but not an idea whose time has come. (Victor Hugo)

The coming years — faced with a confluence of factors ranging from climate change and peak oil to currency crisis and food and water shortage — offer an unprecedented opportunity for Islamic finance to rise to the occasion.

To do so, we respectfully call upon governments, regulators, and the scholars of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), to develop standards, products, and human capital to undertake four major initiatives:

  1. Launch a gold-based currency
  2. Develop Shariah standards for the environment
  3. Support community-based finance
  4. Regulate Shariah standards

But first, it is worth stepping back to assess the gravity of the problem before we consider the urgency of the response.

According to a growing number of climate scientists, in the next few decades — within the lifetimes of many of us and certainly those of our children — the world will undergo major upheaval, with widespread food and water shortage, energy insecurity, mass migration, and unprecedented weather patterns. All things we already see to varying degrees in different parts of the world. But today is just the harbinger. Many scientists, among whom “The Revenge of Gaia” author James Lovelock is most notable, now predict that as many as 80% of the world’s population will perish amid the cataclysms of the 21st century.

The consequence of global heating in our own lives will not be felt so much in the discomfort of extreme heat during summers or, as for some in coastal areas, rising sea levels, but in the extreme shortage of food, water, and energy, now already being felt across the developing world. While these may seem extreme predictions, a growing body of data shows that successive intergovernmental forecasts about the impact of carbon emissions on climate change fall far short of observable reality.

While the evidence has been around for some decades, with most of us only squirming in vague unease at the data, it is gaining mainstream following especially within the last decade, when the proverbial writing is now on the wall: friends without water, gas, and electricity back home; nasty sheets of ice blanketing cities causing power outages; entire countries facing submergence.

Despite this, mainstream corporate media earnestly repeats the growth mantra (“we must have growth for prosperity”) and while it occasionally laments the rise of carbon emissions, the media conveniently manages to avoid asking the obvious “why?” question: why must we have unchecked growth when this is the very thing that causes all our problems?

The answer is becoming plainer for all to see, especially in the wake of the bailout debacle: banks.

In order for banks to survive, there must be compound interest, and in order to keep up with compound interest, you must have compound growth. However, as Margaret Atwood, author of “Payback: Debt and the Shadow Side of Wealth,” notes, “Instead of thinking that nature is this huge bank that we can just keep drawing on, we have to think about the finite nature of this planet to keep it alive so that we too may remain alive. Unless we conserve the planet there isn’t going to be any ‘The Economy.’”

What can Islamic finance do? As it turns out, a great deal.

With conventional finance incapable of thinking outside an interest-based box (“the problem is sub-primes,” “corporate bailouts,” “actually, the problem is greed,” “corporate lobbying needs reform”), the West appears condemned to repeat the mistakes it refuses to learn from. The problem of interest is now so systemic, so deeply rooted, that it may be too close for many to see. Even to this day searching “bank interest and global warming” on the Internet yields almost nothing (except Ethica’s webinar “Interest-Based Finance and Global Warming — Making the Connection”).

What is needed is a paradigm shift in our approach to currency, the environment, the community, and Islamic banks.

Next Week

Part 2 of 6: Launching a Gold-Based Currency


Haven't Experienced Ethica's Award- Winning Training Yet?

Training Video

Play a video from Ethica’s award-winning CIFE program

CIFE & ACIFE graduates have likened the knowledge gained from Ethica’s certification to actually working inside an Islamic bank. Ethica puts you ahead of the curve by training you in the practical aspects of Islamic banking without overwhelming you with theory. Play one of our videos (click here) to experience the quality and depth of our training.

About Ethica Institute of Islamic Finance


Couriered to your doorstep at no extra charge, your framed certificate will handsomely adorn your office or study for years to come. Custom-mounted and framed by hand, this beautiful certificate was designed by classically-trained Islamic artists and third-party accredited to comply with AAOIFI, the world’s leading Islamic finance standard.

Ethica is trusted by more professionals for Islamic finance certification. The Institute has trained over 15,000 paying professionals in 160 financial institutions across 65 countries, winning numerous industry awards. Ethica’s 4-month Certified Islamic Finance Executive™ (CIFE™) is a globally recognized certificate accredited to comply with AAOIFI, the world's leading Islamic finance standard, and NASBA, the world’s leading Continuing Professional Education (CPE) standard. Ethica also offers Advanced CIFE™ (ACIFE™) certificates in Financial Analysis and Accounting. The award-winning certificates are delivered online or live at the bank.

Ethica's Awards in 2018

2018 Best for Islamic Finance Training (CV Magazine Corporate Excellence Awards UK)

2018 Islamic Finance Education Provider of the Year — Global (Corporate LiveWire UK)

2018 Islamic Finance Education Provider of the Year — Global (ACQ5 Global Awards UK)

2018 Outstanding Contribution to Shariah-Compliant Financial Management — Global (Capital Finance International UK)

2018 Best Islamic Finance Education Provider MENA (Global Banking and Finance Review UK)

2018 Niche Training Services Provider of the Year — Global (ACQ5 Global Awards UK)

2018 Gamechanger of the Year — Global (ACQ5 Global Awards UK)

2018 Courses & Training — Adviser of the Year — UAE (Finance Monthly M&A Awards UK)

2018 Islamic Finance Team of the Year — UAE (Finance Monthly M&A Awards UK)

2018 Courses & Trainings Advisory Firm of the Year — UAE (Finance Monthly Global Awards UK)

2018 Consulting Advisory Firm of the Year — UAE (Finance Monthly Global Awards UK)

2018 Management Consulting — Advisory Firm of the Year — UAE (Finance Monthly Global Awards UK)

2018 Recognized Leaders in Islamic Finance Training — UAE Business Awards (MEA Markets UK)

2018 Award for Excellence in Finance Training — UAE (CV Magazine UK)

2018 Best Sharia Finance Education & Certification Specialists — Middle East — UAE Business Awards (MEA Markets UK)

2018 CEO Today Management Consulting Awards (CEO Today Magazine UK)

2018 International Advisory Experts Award (International Advisory Experts UK)

2018 Best Specialist Islamic Finance Firm — UAE (AI's International Finance Awards UK)

© 2019 Ethica Institute of Islamic Finance