Malaysia's Dual ESG Framework

This chapter explores Malaysia’s unique approach to Environmental, Social, and Governance (ESG) investing through the integration of Islamic finance principles with global sustainability frameworks. It examines how Shariah-compliant finance, with its emphasis on ethical conduct, social justice, and risk sharing, complements and challenges conventional ESG criteria. Through policy analysis, institutional mapping, and practitioner interviews, this chapter assesses how Malaysia’s dual ESG framework operates across regulatory, market, and cultural domains. It highlights the synergies and tensions between religious values and secular sustainability metrics and considers Malaysia as a case study in the localisation of ESG within Muslim-majority economies. This chapter concludes by reflecting on the potential of faith-based ESG models to contribute to a pluralistic and value-driven global finance system.