Prudent Ethical Investment: Convergence of Responsible Investment Factors in Sharīʿah Equity Screenings

Empowerment of investors in making the right decisions can discipline financial markets and put companies and, hence, economies on the ‘right’ track. This ‘right’ track seeks to promote shared prosperity, ensure environmental balance and achieve overall well-being. Over the last few decades, these value-driven investment considerations have been emphasised within the framework of Socially Responsible Investment (SRI) screening strategies. During the same period, similar endeavours are resonated by Islamic investment (Sharīʿah) screening framework that is based on the permissibility (ḥalāl) paradigm. Moreover, under the umbrella of the United Nations, the global initiative such as Responsible Investment Principles (PRIs), Global Compact Principles (GCPs) and Sustainable Development Goals (SDGs), further strengthen the ethical premise of Sharīʿah investment and SRI. With these considerations of the shared interests, in the present research, we try to study the potential expansion of Sharīʿah-compliance framework beyond the permissibility (ḥalāl) paradigm to encompass the broader objectives of Islamic legislation (Maqāṣid al-Sharīʿah). This study is done by analysing the similarities and differences between the rather constricted (permissibility paradigm) Sharīʿah investment screening and the broader SRI screening framework Finally, the research concludes with proposing two new modified Sharīʿah screening frameworks. We hope that these two frameworks will be instrumental in integrating local aspirations, national policy objectives and global goals. We also hope that the findings and the proposed modified models may promote further discussion, research and product development in the coming future.