Integrating Islamic social responsibility, financial performance, and sustainable development in Islamic banking: A systematic review.

Abstract

: The growing emphasis on sustainable finance has reshaped the strategic role of Islamic banking, positioning Islamic Social Responsibility (ISR) as a key mechanism for integrating ethical governance, financial performance, and sustainable development. Despite the expanding body of research, existing studies remain theoretically, methodologically, and thematically fragmented, limiting a comprehensive understanding of ISR within Islamic banking. This study addresses this gap by conducting a Systematic Literature Review (SLR) to synthesize the intellectual development of ISR research and examine how the literature conceptualizes the relationships among ISR, financial performance, and sustainable development. The review followed the PRISMA 2020 guidelines and systematically analyzed 41 peer-reviewed journal articles published between 2015 and 2025, retrieved primarily from the Scopus database. The findings reveal a significant evolution in ISR research, from a disclosure-oriented perspective emphasizing CSR reporting and Sharia compliance toward a broader strategic perspective that integrates corporate governance, stakeholder accountability, sustainability, ESG, and the Sustainable Development Goals (SDGs). The review further demonstrates that Stakeholder Theory remains the dominant theoretical foundation, although recent studies increasingly combine complementary perspectives, including Agency Theory, Institutional Theory, Sustainability Theory, the Resource-Based View, and Maqasid al-Shariah, to explain the multidimensional nature of responsible Islamic banking. Methodologically, the literature is dominated by quantitative empirical studies using secondary data, while thematic analysis indicates an expanding research focus from CSR disclosure to sustainable value creation. The principal contribution of this review lies in developing an integrated conceptual understanding that positions ISR as the strategic nexus linking Islamic ethical values, corporate governance, financial performance, and sustainable development. By consolidating previously fragmented evidence, this review provides a stronger theoretical foundation for future research and offers practical insights for advancing sustainable and responsible Islamic banking.