Convergence and Collaboration

In light of Calvert Impact Capital's initiative under the Jubilee Assembly to convene investors from diverse faith communities and design collaborative ventures, is a series of brief pieces on the intersection of Islam, responsibility, and business. The first article introduced foundational principles; the second explored responsible capital structures as means to responsible outcomes. This final one highlights opportunities for collaboration with Islamic finance and Muslim communities.

The relevance of Islamic financial principles lies in their ability to disrupt and democratize. While today's Islamic finance market has made some progress in avoiding (interest-bearing) indebtedness, it has yet to realize its potential: an asset-backed, risk sharing economy free of the financialization and sort of debt that exacerbates inequalities and destabilizes, and that more broadly distributes ownership. The Shari'a challenges the Islamic finance community by calling for participatory governance, deeper social empathy, and an embedded interconnectedness with the natural environment. In these, Islamic finance and responsible investors share and find opportunities to collaborate.

This convergence is perhaps best revealed through unintended parallels. There are, for instance, similar efforts to weave mission into for-profit business, e.g. benefit corporations in the US and Shari'a-based governance mechanisms in the Muslim world. Second, the impact terms project, a compendium of impact investment legal terms, uncovered efforts to tie return to financial health and performance in both equity and debt structures. In these, impact and Islamic investors share an understanding that businesses are better served when investors more closely align as partners. Finally, having appreciated the dangers of debt contracts (See e.g., Adair Turner, Between Debt and the Devil: Money, Credit and Fixing Global Finance (2016), p.54-57), responsible asset managers apply debt-based screens, utilizing a "prudent ESG" approach, much as some Islamic managers.

Intentional collaborations also demonstrate convergence and opportunity. Numerous real estate and private equity transactions regularly take place with Islamic institutions globally. Among those partnering with Islamic finance is thirdAct, an asset-backed equity-based platform building resilient cities, incorporating Stellar Capital's Shari'ah compliant blockchain technology. Mission Driven Finance, an impact investment firm, financed Somali Family Service of San Diego with critical capital designed in accordance with Islamic principles. The capital markets have also seen offerings, such as Indonesia's Green Sukuk, the International Finance Facility for Immunisation, and DP World's pay for performance sustainability linked financing.

The UN and development organizations are also actively engaged. The UNDP built several platforms and frameworks, collaborating with Islamic finance and its social finance components, aimed at achieving the SDGs. The IFC issued a $100 million development finance sukuk (trust certificate) in 2015. The International Federation of Red Cross and Red Crescent (IFRC) recently harnessed the social finance pillar of the Islam, namely Zakat (a mandatory alms on wealth, not income), providing disaster relief. The strategy transformed recipients into givers, who paid forward even more, creating a deeper, shared prosperity. To measure impact, the Islamic finance community is designing platforms, such as Arabesque's S-Ray, Islamic Reporting Initiative, and Islamicity Indices.

The values shared among responsible communities are, simply put, many, as are the lessons they might learn from one another.

Umar Moghul is a partner at the law firm of Roberts Moghul & Partners (, where he handles a variety of cross-border corporate and financial matters, and also partner at Gateway LLP (, a global consulting firm exclusively devoted to the Islamic economy. His work focuses on the design of products and frameworks to help create participatory, inclusive, and more responsible transactions and markets. He can be reached at either or