From principles to practice: integrating ESG principles through a Maqasid Syariah lens

Abstract

This study examines the integration of Environmental, Social, and Governance (ESG) principles with Maqasid Syariah to cultivate sustainable and ethical corporate operations. This study utilises an interpretive research technique and Grounded Theory Methodology to investigate the coexistence and mutual reinforcement of different frameworks in promoting social and economic prosperity. The research is based on qualitative data obtained from 15 comprehensive interviews with mosque committee members and personnel of zakat organisations, concentrating on their ethical responsibilities in financial management and community assistance. The results indicate that the integration of ESG principles with Maqasid Syariah provides a strong framework for attaining social justice, environmental stewardship, and ethical governance. The study emphasises the significance of financial management systems that are transparent, responsible, and consistent with the overarching goals of Maqasid, especially in serving zakat recipients. The incorporation of these concepts into the financial practices of zakat institutions and mosques (acting as agents) has had a beneficial impact on the community's financial management, thereby reinforcing the financial stability of households. This study highlights the potential of integrating Islamic ethical concepts with contemporary sustainability frameworks to improve social contributions and economic resilience. By implementing integrated approaches, corporations and religious institutions can significantly contribute to financial stability and social welfare. The report enhances the dialogue on Islamic finance and sustainability, providing significant insights for policymakers, business executives, and religious institutions in their pursuit of a more equitable and sustainable future.