The Influence of Islamic Financial Literacy on Sustainable Investment Decisions in Islamic Financial Instruments

Asep Rahmatullah; Muhamad Abdul Muid; Barlian Fajri

doi:10.67245/artha.v1i1.16

Authors

Asep Rahmatullah Universitas Islam Internasional Darullughah Wadda’wah, Pasuruan
Muhamad Abdul Muid Universitas Islam Internasional Darullughah Wadda'wah, Pasuruan
Barlian Fajri Institut Agama Islam Tihamah, Cirebon

DOI:

https://doi.org/10.67245/artha.v1i1.16

Keywords:

Islamic Financial Literacy, Sustainable Investment Decision, Islamic Finance, ESG, Green Sukuk

Abstract

Growing concern over sustainability issues has encouraged the development of investment practices that not only focus on financial returns but also consider social and environmental impacts. In the context of Islamic finance, sustainable investment is closely aligned with Sharia principles that emphasize justice, social responsibility, and public welfare (maslahah). This study aims to analyze the influence of Islamic Financial Literacy on sustainable investment decisions in Islamic financial instruments. The study employs a qualitative approach using a library research method by collecting and analyzing relevant literature on Islamic financial literacy, sustainable investment, Environmental, Social, and Governance (ESG) principles, and sustainable Islamic financial instruments. Data were analyzed using content analysis and thematic analysis to identify relationships among the examined concepts. The findings indicate that Islamic Financial Literacy plays a significant role in enhancing investors’ understanding of Sharia principles, the characteristics of Islamic investment instruments, and sustainability values that are consistent with ESG and maqashid al-shariah. A higher level of literacy encourages investors to make investment decisions that consider not only financial returns but also social and environmental impacts. Furthermore, instruments such as green sukuk, sustainability sukuk, and SRI sukuk represent the integration of Sharia principles and sustainability objectives. This study concludes that strengthening Islamic Financial Literacy can serve as an important strategy for promoting sustainable investment in Islamic financial instruments.

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