Practical analysis for investment professionals
25 December 2013

Best of 2013: Understanding SRI and Islamic Finance

Recent years have seen increasing interest in sustainable and responsible investing (SRI) and Islamic finance. In fact, growth in SRI assets has outpaced professionally managed assets as a whole, and more than 10% of the total assets under management in the United States are now invested following SRI practices. Similarly, according to a special report on Islamic finance in The Banker, a frequently cited resource in Islamic finance statistics, the compound annual growth rate in global Shari’a-complaint assets since 2006 remains in double digits at 16.02%. Nonetheless, many investment professionals still know little about SRI and Islamic finance.

Here are my top picks for content from the past year that help explain these topics.

Impact Investing Explained Simply and Clearly (Video): This was one of the most popular video interviews on our blog this year, and given how little investment professionals know about impact investing, it’s not surprising that readers were interested in this primer. Harry Hummels, an academic and a practitioner in impact investing, explains how impact investing is similar to and different from traditional investing.

Why Isn’t There More Collaboration between Islamic Finance and SRI?: Islamic finance and the forms of finance generally referred to as SRI have yet to actively collaborate with each other. It’s an opportunity that is waiting to be seized upon by industry leaders.

The Church of England as an Institutional Investor (Video): Did you know that the Church of England has a portfolio as large as GBP 8 billion? With so much money comes a lot of responsibility. The ethical expectations from the Church are much higher than for regular institutional investors. Edward Mason, secretary of the Church of England’s Ethical Investment Advisory Group, shares his views on how the Church of England reflects its moral values in its investments.

Enhanced ESG Disclosure and Long-Term Investing in Europe (Video): Steve Waygood, chief responsible investment officer at Aviva Investors, explains the European Commission’s adoption of a proposal to enhance transparency of environmental and social issues, and the implications for long-term investing.

Recommended Reading: The Best Books on Islamic Finance: A frequent question on the minds of those interested in learning about Islamic finance is, “What’s the best book that I should read?” To answer this question, I spoke with Rodney Wilson, a professor at the University of Durham and a well-known commentator on Islamic finance. His office seemed to have every known title on Islamic finance nicely stacked into his book shelves.

The Best Learning Resources on Corporate Governance: Robert A. G. Monks Shares His Picks: For whom is a corporation run? Is corporate governance a legal topic? An economic one? Or does it just boil down to ethics? CFA Institute interviewed Robert A. G. Monks, a pioneer of corporate governance, to get his picks for the best learning resources to help answer these important questions.


Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

About the Author(s)
Usman Hayat, CFA

Usman Hayat writes about sustainable, responsible, and impact investing and Islamic finance. He is the lead author of "Environmental, Social, and Governance Issues in Investing: A Guide for Investment Professionals," and the literature review, "Islamic Finance: Ethics, Concepts, Practice." He is interested in online learning and has directed three e-courses for CFA Institute: "ESG-100," "Islamic Finance Quiz," and "Residual Income Equity Valuation." The other topics he writes about are macroeconomics and behavioral finance. Previously, he was a content director at CFA Institute. He is a former executive director at the Securities and Exchange Commission of Pakistan (SECP). He has experience working in securities regulation and as an independent consultant. His qualifications include the CFA charter, the FRM designation, an MBA, and an MA in Development Economics. His personal interests are reading and hiking.

7 thoughts on “Best of 2013: Understanding SRI and Islamic Finance”

  1. Yalwa Tahoua says:

    well done Usman Hayat n all the interviewees for their insightful responses.Good luck. God bless CFA institute n Ethical Investment professionals.

  2. Usman Hayat says:

    Yalwa Tahoua

    Thank you for your reading the blog and for your kind comment.

  3. Saleh says:

    Thanks for posting this great article Usman!

    1. Saleh

      Thanks for appreciating this blog post!

  4. Rohit says:

    Hi Usman, I am very happy to read this blog and I am currently doing Master thesis on SRI Funds… This particular blog was very useful and consistent with my analyses… I enjoyed reading it.. Thanks for sharing .. Hope to see more…. Good Luck

  5. Rohit

    Glad to know you found the blog post useful. We have more content on ESG/SRI. Please have a look at http://www.cfawebcasts.org/modules/Catalog/Package.aspx?CourseGroupID=1194

  6. Usman hayat i really appreciate your work five stars

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