This study aims to explore the intersection of Islamic finance and environmental sustainability by evaluating Pakistan’s inaugural green sukuk and assessing the broader regulatory and policy landscape for green finance.
By using a qualitative content analysis (QCA) methodology, the research combines a case study of Pakistan’s first sovereign green sukuk with a policy review of green finance initiatives in Pakistan. Data were sourced from official documents, academic literature and media reports (2015–2025) and triangulated to ensure credibility.
The green sukuk issuance, structured on an Ijarah model, demonstrates strong investor demand and practical alignment with both Shariah principles and Pakistan’s Sustainable Development Goals. However, broader integration of Islamic finance into environmental planning is limited by fragmented regulatory frameworks, weak enforcement and lack of technical capacity within financial institutions.
The study relies on secondary data, which may not fully capture operational challenges or stakeholder perspectives. Future fieldwork and interviews could provide more nuanced insights into implementation bottlenecks and investor behavior.
The paper provides actionable recommendations for Islamic banks, regulators and researchers, including standardizing taxonomies, expanding green product offerings and improving institutional coordination.
This is the first comprehensive academic analysis of Pakistan’s green sukuk within its evolving green finance framework, offering a replicable model for other emerging economies aiming to align Islamic finance with climate objectives.
