Abstract
Considering the region is highly vulnerable to climate change, all ASEAN Member States have ratified the Paris Agreement and agreed to the Regional Roadmap for Implementing the 2030 Agenda for Sustainable Development in Asia and the Pacific. To provide the ASEAN taxonomy for sustainable finance, Islamic finance should be considered as a part of it. Therefore, this chapter will provide an Islamic Green Financing Taxonomy to help stakeholders determine which activities qualify as sustainable and which instrument is suitable for the activity. As a leading community in the world that drives the global halal industry, ASEAN also can be a best practice for implementing Islamic Green Financing. Through literature study, this chapter purposes to (1) describe the framework of ASEAN for the circular economy and sustainable energy in tackling the climate change, (2) describe the ASEAN taxonomy, and (3) describe the proposed Islamic Green Financing Taxonomy.
TopBackground
All the Association of Southeast Asian Nations (ASEAN) Member States have ratified the Paris Agreement. The ASEAN Heads of State and Government applied the Declaration on Institutionalising the Resilience of ASEAN and Its Communities and Peoples to Disasters and Climate Change where the ASEAN Member States committed to hammering out a more resilient future by conforming to a changing climate, deterring the new risks, and minimizing the existent climate-related risks and disasters through the implementation of social, economic, physical, environmental, and cultural initiatives. All ASEAN Member States have signed to the United Nations Sustainable Development Goals (SDGs) and have approved the Regional Roadmap for Implementing the 2030 Agenda for Sustainable Development in Asia and the Pacific.
ASEAN Centre for Energy (ACE, 2021) reported that five ASEAN Member States in 2020 have proposed or renewed their Nationally Determined Contributions (NDCs), while the other five completed the NDCs in 2021. The newest NDCs of the ASEAN Member States perform more assertive commitments as a representation in the mitigation targets, the conditionality of NDCs, and wider coverage of greenhouse gases (GHG) and sectors. The fairness and ambition of the newest NDCs are assigned based on each national situation. Table 1 shows the some newest ASEAN member countries’ commitments to emission reduction.
Table 1. The ASEAN Member Countries’ Emission Reduction Commitments in 2030
| Emission Reduction (MtCO2e) | Unconditional | Conditional |
| Previous NDCs | Newest NDCs | Previous NDCs | Newest NDCs |
| Indonesia | 832.01 | No change | 1,176.29 | No change |
| Malaysia | 0.531 tCO2e/thousand Malaysian Ringgit |
| Singapore | 0.113 kgCO2e/SD and peaking at 65 MtCO2e |
| Brunei Darussalam | n.a | 5.90 | n.a | n.a |
| Philippines | n.a | 90.52 | n.a | 2,414.70 |
| Thailand | 111.00 | No change | 138.75 | No change |
| Cambodia | n.a | n.a | 3.1 | 64.5 |
| Vietnam | 62.99 | 83.51 | 196.85 | 250.53 |
| Myanmar | n.a | 244.52 | n.a | 414.75 |
| Lao PDR | n.a | 62.40 | n.a | n.a |
Source: ACE (2021)
Key Terms in this Chapter
Waqif: Some call it with al-mu?abbis or founder of waqf; the person who constitutes the waqf of his properties; the waqf donor.
Waqf: Assets that are donated, bequeathed, or purchased for being held in perpetual trust for general or specific charitable causes that are socially beneficial; an endowment made by a Muslim under Islamic Law to a nazhir ; an endowment fund but is strongly encouraged in Islam as a contribution to society; an inalienable charitable endowment under Islamic law.
Nazhir: Some call it with qayyim, mutawalli , trustee, or fund manager who is responsible for generating profits from the waqf that are subsequently used to support socioeconomic development; Individual, organization, or under law institution, which is given the responsibility to manage, administrate, and preserve the waqf assets from the waqif. They have obligation for making sure the sustainability of waqf assets to achieve continuous benefit for the beneficiaries.