Islamic Bankers’ Niyyah Toward Green Sukuk for Attaining Sustainable Finance: Evidence from Bangladesh

Abstract

This study investigates the factors associated with niyyah (worshipful intention) of Islamic bankers toward issuing green sukuk (G-sukuk) investment instruments. In particular, it analyses how bankers’ empathy, moral and ethical responsibilities, and self-efficacy are related with environmental awareness, perceived social support, and green tech innovation, respectively. These factors then predicted bankers’ niyyah toward issuing G-sukuk. The present research employed the theory of bounded rational planned behavior as its theoretical foundation. Data were collected from 390 bankers employed in different Islamic banks. Random sampling technique was employed for this cross-sectional study and for analyzing data, this study applied structural equation modeling. Findings indicate that all predictors are statistically significant and positively associated with bankers’ niyyah toward G-sukuk for ensuring sustainable finance. Furthermore, G-sukuk initiatives can help to lower the carbon emissions and other harmful substances, which would improve overall environmental sustainability and ecological contexts related to SDG-13. There is limited empirical evidence available on the G-sukuk perspective in Bangladesh. This study will provide practical insights for the bankers and policymakers.