Green Sukuk as an Innovative Instrument in Promoting Sustainable Development in Indonesia

Abstrak

The increasing demand for financing environmentally friendly projects has encouraged the emergence of innovative financial instruments that align with Islamic principles, one of which is the Green Sukuk. This topic was chosen due to the urgency of integrating Islamic financial systems with sustainable development agendas in Indonesia. As the world’s most populous Muslim-majority country with a strong commitment to the Sustainable Development Goals (SDGs), Indonesia holds a strategic position to optimize Green Sukuk as an ethical and sustainable financing instrument. This study employs a mixed-methods approach, combining secondary data from the Ministry of Finance, the Financial Services Authority (OJK), and global sukuk reports with in-depth interviews involving Islamic finance experts and capital market analysts. Descriptive analysis is used to illustrate issuance trends, contributions to green projects, and expert perceptions of Green Sukuk policy effectiveness. The findings reveal that Green Sukuk plays a significant role in supporting renewable energy, energy efficiency, and waste management projects while strengthening Indonesia’s position as a pioneer in Islamic-based green financing. However, challenges remain in market literacy and environmental impact assessment mechanisms. In conclusion, Green Sukuk serves as a strategic instrument bridging Islamic values and global sustainability goals, though capacity building and more adaptive policies are still needed to enhance its contribution to the national green economy.