A Study on Opportunities and Challenges of Promoting Sustainable Corporate Sukuk in Qatar

Sukuk, or Islamic bonds, are growing in popularity as an alternative for ethical investors seeking Sharia-compliant investments. Qatar has been working to develop its sukuk market as a leader in Islamic finance. However, further advancement is needed to promote sustainable varieties that support environmental and social projects. This study aimed to comprehensively examine opportunities and challenges for sustainable corporate sukuk in Qatar and provide recommendations for their development. Specific objectives included identifying the key drivers behind sukuk issuance from the perspective of companies and investors. It also assessed the demand for sustainable investment options among different investor cohorts. Additionally, the study sought to offer actionable strategies to promote sustainable corporate sukuk in Qatar. In addition, a qualitative research methodology was utilized, consisting of semi-structured interviews with 8-10 critical stakeholders from regulatory authorities, major companies, and financial institutions in Qatar. Purposive sampling was employed to select information-rich participants. The interviews were thematically analyzed through NVivo coding and hierarchical charting. This facilitated the identification of overarching themes and relationships between concepts.

The results found that liquidity constraints impeding secondary market trading, complex regulations, and lack of awareness present challenges. However, globally growing sustainable finance presents opportunities to be seized. Issuers view sukuk favorably as a means of differentiation and expanded access to sustainability-minded investors. Incorporating ESG metrics enhances strategic decisions. Investor appetite centers around ethical returns and backing environmental/social projects. Assessing demand and engaging investors emerged as priorities. Qatar was recommended to implement strategic planning, public-private partnerships for large projects, targeted awareness campaigns, infrastructure upgrades, regulatory reforms, and disclosure guidelines. Green bond issuances demonstrate commitment to sustainability goals. Overcoming barriers demands navigating through collaborative, long-term market cultivation anchored in strategic vision. Scaling sustainable corporate sukuk can advance Qatar's sustainable development agenda through diversified funding for green initiatives. Achieving full potential requires addressing liquidity barriers, strengthening legal frameworks, and capitalizing on rising global sustainable investment interest through multi-stakeholder partnerships focused on innovation. Success positions Qatar at the forefront of Islamic green finance globally.